Saturday, August 17, 2013

Interest on EDC:- National Consumer Court's Judgement

Here is what the Hon'ble National Consumer Forum decided on 1/08/2013 in the case of Mr. Rohthas Singh & ANR vs Ansal Properties & Infrastructure Ltd, wherein the grievance raised was whether the Complainant/home buyer is liable to pay Interest on EDC installments or not. The Court observed that the crucial point is, when was the 'EDC' paid and when was it deposited, by the Builder.
Please go through the judgement to get a fair Idea of the opinion of the law and the court in this matter;



 (From the order dated  30.11.2012 in Appeal No. 1127/2012 of the
State Consumer Disputes Redressal Commission, Haryana, Panchkula)

1. Rohtash Singh         , S/o. Sumer Chand
C/o Vijay Hood, H.No.13/20, 8 Marla
Radha Krishan Mandir, Panipat, Haryana

2. Smt. Santra Devi
W/o Rohtash Devi
R/o. H.No.13/20, 8 Marla
Radha Krishan Mandir, Panipat, Haryana                      …  Petitioners


M/s Ansal Properties and Infrastructures Ltd.
Narula Hotel, Panipat
Also at :
115, Ansal Bhawan
16, K.G. Marg, New Delhi                                                  …  Respondent                                                     

For  the Petitioners : Mr. Naveen Kumar Raheja, Advocate

For the Respondent : Mr. Dalip Mehra, Advocate
                                    Along with Ms.Sugandha, Advocate


1.      The controversy  revolves  around the question, “Whether the Sh.Rohtash Singh, complainant No.1 and Smt.Santra Devi, his wife/Complainant No.2, are liable to pay  interest?”. M/s.Ansal Properties & Infrastructure Ltd., the respondent,  claimed interest upon External Development Charges (hereinafter referred to as ‘EDC’, in short), from the petitioners, under Clause 2 of the Agreement, which runs as follows:-
          Apart from the above internal services, if any external and/or peripheral services are provided by any Haryana Urban Development Authority or any local authority for any bigger zone and any charges is levied thereof and/or any other charges are levied in any respect, the same shall also be payable in addition to the aforesaid price of the plot and be paid on pro-rata by the buyer as determined by the Director, Town and Country Planning, Haryana”.

2.      The complainants bought a plot in Sushant City Project of the respondent/opposite party in Panipat  vide agreement dated 24.04.2010.  The complainants contend that  they have paid entire sale  price and other  charges of the plot as per the terms and conditions of the agreement. However,  the complainants  were  astonished to receive a demand notice from the opposite party, in the sum of Rs.4,63,964/-, on account of interest on the EDC.  The complainants filed complaint before the District Forum alleging that there was deficiency in service. 

3.      The opposite party raised the following defences in its  written  statement.  As per clause 2 of  the agreement,  the complainants are bound to pay the said amount. The  opposite  party  explained  that  there were two options for the complainants to pay the EDC, i.e., either in lumpsum or in installments.  The complainants chose to make the payment of  EDC, in installments.  Had  they  paid  the EDC, in lumpsum, they would not have been charged the interest, but in  the case of  payment  of  EDC, in installments, the  interest was  charged.  It was explained  that  at the time of calculation of  installments of EDC, due to calculative  mistake,  the interest  was  not included in the installments.  It  is averred that OP is not claiming the interest on the ground of delayed  payment  by the complainants to the OP but the same  was to be deposited by the opposite party/petitioner with  Haryana  Urban Development Authority.  It is common knowledge  that  if the amount  is to be paid in installments,  then  interest is to be charged on the principal amount.  Out of 1139 allottees, 283 allottees have already paid  the interest portion on the basis of subsequent  demand  notice made  by  the respondent.  The respondent  realized  its mistake  in  August, 2010  when  the Audit Report was filed.  The District Forum, Panipat has no jurisdiction and  only  Delhi Consumer Fora  have got the jurisdiction. HUDA is a  necessary party.

4.      OP  has  placed  on record the copy sent to the complainants dated 28.12.2010, wherein, the said amount  was demanded.  The said
letter runs, as under:-
“Dear Sir/Madam,
Due to an oversight, we did not charge you interest for the period over which external development cost installments were scheduled to be payable by you even as interest is payable by us to the Government. The fact of non-charge of interest can be verified by you from the facts on record in the letter of allotment.
Accordingly, you are advised to pay a sum of Rs.4,63,964/- being the dues on account of interest thereon without prejudice to other sums payable by you as part of the sale consideration and as per our terms and claims thereof.
In case you need any clarification, you are requested to get in touch with our local sales office at 0180-2649601/02/03.
Sd/- 28.12.2010”.

5.      The petitioner  has  also  placed on  record  the total statement of account. 

6.      We have heard the counsel for the parties.  Counsel for the petitioner/OP has cited three authorities which were reported in :-  (1) M/s. Mackinnon Mackenzie & Co.Ltd. Vs. Audrey D’Costa & Anr., SLP (Civil) No.1265 of 1987, decided on 26.03.1987;  (2) Sri Tarsem Singh Vs. Sri Sukhminder Singh, SLP (C ) No.4639 of 1998, decided on 02.02.1998; and (3) A.P.Kochudevassy Vs. State of Kerala, A.S.No.177 of 1976 (High Court of Kerala),  decided on 05.11.1981.

7.      In these authorities,  it was laid down that the parties are bound by the agreement. 

8.      We do not pick up a conflict with this legal proposition.  However, we find  that  the defence  set up by the petitioner is vague, evasive, ambiguous and leads us, nowhere.  In absence of clear facts, the petition does not begin to jell.   Dollops of mystery  surround  this case.  It is not clear  whether  the complainants  were informed about the fact  that  they will have  to pay interest, if they will  pay EDC, by installments or  not.  There is no such inkling in the agreement.  There is no evidence that this position was made clear to the complainants. 

9.      We are of  the  considered  view that the case should be remanded to the District  Forum, Panipat,  and we, accordingly, remand the matter to the District Forum, Panipat.  Both the parties are given opportunity to lead their respective evidence, on this point.  This is a material  point and  if  the respondent/OP  has failed to  disclose  all these facts to his clients, in that event, it would be deficiency on its part. 

10.    Secondly, all the details regarding payment of installments were
not furnished.  This  was also  not shown  that the installments  were paid to the Government/HUDA, immediately, which delayed the above said deposit  of  the amount, is a fact,  which is shrouded in mystery.  The documentary evidence should be placed on record before the District Forum, Panipat, to show that the respondent/OP was prompt in depositing the amount, with the  Government/HUDA.
11.    Thirdly, it is not clear, as to “When the amount was paid and when the amount was deposited?”.  Was there any delay in depositing the amount on the part of  the respondent/OP?  In that event,  the petitioners/complainants  should not  suffer  for the  same.  Clear cut evidence should come on  the record. Is it a case of contributory negligence?.  If so, what is its effect?  Each day’s explanation is required.  The Circular of  the Government/HUDA that  the money should be paid immediately,  and  in that event, no interest should be charged, and if it is paid in installments, only then interest could be charged,  was  also  withheld.  Both the parties and, particularly, the respondent/OP  is  given opportunity to bolster  its case with  solid and unflappable  evidence. The  main crucial  point  is,  when the ‘EDC’ was paid, and when it was deposited.  The  parties  are directed to appear before the District Forum, Panipat, on 04.10.2013.  The District Forum, Panipat, will try to expedite this case.
          The revision petition is disposed of, in above terms.

    (J.M. MALIK, J.)


                                                        (DR. S.M.KANITKAR)



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