Case: Chief Administrator Huda  Vs. Shakuntla Devi

2. The Respondent was allotted Plot No. 40, measuring 40 marlas in Sector 8, Urban Estate, Karnal on 03.04.1987. As physical possession of the plot was not given to her by the Appellants, the Respondent filed Original Complaint No. 54 of 1997 before the State Commission. In the said complaint, the Respondent alleged that she had paid the full price of the plot including the enhancement fee as per the terms and conditions of the allotment letter. She averred that she was not given the possession of the plot in spite of repeated requests. The Respondent also pleaded in the complaint that the Appellants were required to complete the development work within 2 years from the date of the allotment letter and hand over the physical possession. She further stated that she wanted to construct a house and the delay in handing over physical possession of the plot resulted in additional expenditure for the building as the price of construction material increased manifold from 1988 to 1997. On the basis of the above averments, the Respondent sought for the following reliefs in Original Complaint No. 54 of"That the opposite party be directed not to charge any extension fees for not constructing the plot within the stipulated period which could not be done because of non delivery of the physical possession of the plot.ii. HUDA be directed not to charge interest at all on the amount because the HUDA had offered a paper possession in the year 1982 and had not handed over the physical /actual possession till date.iii. HUDA be directed to deliver the physical possession immediately after completing development work as per the brochure and advertisement and after providing the community service such as schools, community centre, hospital etc. in the sector.iv. The HUDA be directed to give compensation of 1.00 lac against harassment mental agony suffered due to the act and conduct of HUDA.v. Directed to give cost to the complainant for Rs. 20,000/against the expenditure incurred in filing this complaint and as well as for spending the amount for visiting the office of the last 8 years.vi. The complainant be awarded interest at the rate of 18 % on the amount deposited on various time till the actual possession of the plot is given.vii. The Respondent be directed to pay Rs. 5.00 lac escalation cost of the construction material.The Appellants filed a written statement in which it was stated that the Respondent was allotted the plot from the Government Discretionary Quota vide Allotment Letter No. 5049 dated 03.04.1987. The Appellants alleged that the Respondent did not seek delivery of possession prior to 16.07.1997. It was also stated in the written statement that an amount of Rs. 28,000/was still outstanding. It was further alleged that the Respondent was not interested in constructing a house and that no building plan was submitted for approval.4. The State Commission by its order dated 21.12.1998 held that the Respondent has established deficiency of service by the Appellants as there was delay in handing over physical possession of the plot. The complaint was allowed and the Appellants were directed to deliver vacant physical possession of the plot, if not already done, to the Respondent within one month from the date of receipt of the order. There was a further direction to pay interest on the amount deposited by the Respondent at the rate of 12% with effect from 03.04.1989 and to pay a sum of Rs. 2 lakhs as compensation on account of escalation in the cost of construction etc. The Appellants were also directed to pay Rs. 20,000/towards compensation for monetary loss and mental harassment suffered by the Respondent.5. Aggrieved by the said order dated 21.12.1998 of the State Commission, the Appellants filed an appeal before the National Commission. The National Commission confined the dispute in First Appeal No. 154 of 1999 only to the award of compensation of Rs. 2 lakhs relating to escalation in cost of construction. The other reliefs pertaining to payment of compensation towards monetary loss and mental harassment of Rs. 20,000/and interest on the amount deposited by the Respondent were confirmed. The National Commission remanded the matter forof compensation for escalation of cost of construction in accordance with CPWD rates.6. The State Commission reconsidered the matter and permitted both sides to produce evidence which would enable it to compute the compensation for escalation of construction cost as per CPWD rates. The Respondent produced evidence to show that the escalation in cost of construction between April, 1989 and January, 2000 would be Rs.An affidavit dated 06.02.2007 was filed by Sh. Vikram Singh Malik, Estate Officer, HUDA, Karnal on behalf of the Appellants in which it was stated that the physical possession of the plot was given to the Respondent on 21.01.2000. The Respondent submitted a building plan only on 14.02.2006 which would clearly prove that the Respondent was not interested in constructing the house. The submission of the Appellants that the Respondent was not entitled for more than Rs. 2,00,000/towards increase in the construction cost was rejected by the State Commission on the ground that the National Commission directed computation of compensation at CPWD rates and that there was no restriction in the order of remand. The material produced by the Respondent to prove escalation in the cost of construction was accepted by the State Commission which held that the Respondent was entitled for a sum of Rs. 18,67,000/as compensation. However, the State Commission held that since the Respondent did not commence construction till 2006 with a view to get more compensation. Therefore, she was awarded a compensation of Rs. 15,00,000/instead of Rs. 18,67,000/towards increase in the cost of construction.7. The National Commission by an order dated 25.09.2007 dismissed Appeal No. 525 of 2007 filed by the Appellants and confirmed the order passed by the State Commission holding that the compensation awarded was just and reasonable. According to the National Commission even if 15 % interest on the amount of Rs. 5 lakhs claimed by the Respondent for 10 years is awarded, the Respondent would be entitled to Rs. 12.5 lakhs. Aggrieved by the order dated 15.09.2007 in First Appeal No. 525 of 2007 of the National Commission, the Appellants have filed this Appeal.

Court's reasoning:
14. It is undisputed that the Appellant handed over the plot to the Respondent only in the year 2000 instead of 1989. The Respondent had paid Rs. 1,22,400/towards the cost of the plot at the rates prevailing in the year of allotment i.e. 1986. There is no dispute that the Respondent was paid Rs. 1,28,188/towards interest awarded by the State Commission. There is also no dispute about the fact that the Respondent did not commence construction till 2006. The State Commission while awarding the compensation of Rs. 15 lakhs towards escalation in the cost of construction commented on the conduct of the Respondent in delaying the construction only with a view to claim higher compensation.15.The point that falls for our consideration in this case is whether the State Commission was justified in awarding Rs. 15 lakhs towards the escalation in the cost of construction as compensation.We are of the view that the Respondent is not entitled to such compensation awarded by the State Commission and confirmed by the National Commission. The Respondent suffered an injury due to the delay in handing over the possession as there was definitely escalation in the cost of construction. At the same time the Respondent has surely benefited by the increase in the cost of plot between 1989 to 2000. In our opinion, the order of the State Commission is vitiated for non application of mind to a vital and relevant factor and hence, suffers from the vice of unreasonableness. The State Commission criticized the conduct of the Respondent in intentionally delaying the construction for 6 years but still proceeded to award compensation. In the facts and circumstances of this case, we are of the opinion that award of interest would have been sufficient to compensate the Respondent for the loss suffered by him due to the delay in handing over the possession of the plot. The compensation of Rs. 15 lakhs awarded by the State Commission is excessive. As we have not reversed the impugned order on any other ground, it is not necessary for us to delve into other points that were urged by the Respondent.