# BIHAR ST A TE HOUSING BOARD v. ARUN DAKSHY

- **Citation:** [2005] Supp. 2 S.C.R. 819
- **Court:** Supreme Court of India
- **Decided:** 2005-08-23
- **Bench:** ARlJIT PASAYAT, H.K. Sema
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bihar-st-a-te-housing-board-v-arun-dakshy-20682
- **Pages:** 4

## Headnote

Bihar State Housing Board (Management and Disposal of Housing
Estate) Regulation, 1983-Non allotment of house-Refund of eqrnest
money-Regulation prescribing interest @ 5% thereon-Consumer ProtecA
B
tion Commission awarding interest @ l 8'Y,,_correctness of-Held : ComC
mission travelled beyond the statutory regulation-Respondent entitled to
interest @ 5% only-Consumer Protection.
The question which has arisen for consideration in the present
appeal is whether the National Consumer Commission was right in
awarding interest @18% on refund of earnest money deposited by
respondent for allotment of MIG House under Bihar State Housing
Board (Management and Disposal of Housing Estate) Regulation, 1983.
Allowing the appeal, the Court
HELD : Regulation 45 of the Bihar State Housing Board (Management and Disposal of Housing Estate) Regulation, 1983 provides that
simple interest @ 5% will be payable on the money so deposited. The
Regulation being self-contained, the Commission should not have travelled beyond the interest regulated by the statutory regulation. The
respondent is entitled to interest @ 5% as envisaged under Regulation
45. (822-A-B-C]
Ghaziabad Development Aulhority v. Balbir Singh, [2004] 5 SCC 65,
relied on.
Bihar State Housing Board & Ors. v. Vijay Sharan & Ors., SLP (C)
No. 26021-22 of 1995 disposed of by Supreme Court on 17.2.1997,
referred to.

## Text

BIHAR ST A TE HOUSING BOARD
v.
ARUN DAKSHY
AUGUST 23, 2005
[ARlJIT PASAYAT AND H.K. SEMA, JJ.]
Bihar State Housing Board (Management and Disposal of Housing
Estate) Regulation, 1983-Non allotment of house-Refund of eqrnest
money-Regulation prescribing interest @ 5% thereon-Consumer ProtecA
B
tion Commission awarding interest @ l 8'Y,,_correctness of-Held : ComC
mission travelled beyond the statutory regulation-Respondent entitled to
interest @ 5% only-Consumer Protection.
The question which has arisen for consideration in the present
appeal is whether the National Consumer Commission was right in
awarding interest @18% on refund of earnest money deposited by
respondent for allotment of MIG House under Bihar State Housing
Board (Management and Disposal of Housing Estate) Regulation, 1983.
Allowing the appeal, the Court
HELD : Regulation 45 of the Bihar State Housing Board (Management and Disposal of Housing Estate) Regulation, 1983 provides that
simple interest @ 5% will be payable on the money so deposited. The
Regulation being self-contained, the Commission should not have travelled beyond the interest regulated by the statutory regulation. The
respondent is entitled to interest @ 5% as envisaged under Regulation
45. (822-A-B-C]
Ghaziabad Development Aulhority v. Balbir Singh, [2004] 5 SCC 65,
relied on.
Bihar State Housing Board & Ors. v. Vijay Sharan & Ors., SLP (C)
No. 26021-22 of 1995 disposed of by Supreme Court on 17.2.1997,
referred to.
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 7225 of
D
E
F
G
2002.
II
819
820
SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R.
A
From the Judgment and Order dated 5.12.2001 of the National ConB
sumer Disputes Redressal Commission, New Delhi in R.P. No. 2099 of
1999.
Sharvan Kumar and Himanshu Shekhar for the Appellant.
Respondent-Ex-parte.
The Judgment of the Court was delivered by
H.K. SEMA, J. : This appeal preferred by the Bihar State Housing
C Board is directed against the judgment and order dated 5 .10.2001 passed by
the National Consumer Disputes Redressal Commission (hereinafter the
Commission) passed in Revision Petition No.2099 of 1999 affirming the
orders passed by the State Consumer Dispute Redressal Commission and
District Consumer Forum awarding interest @ 18%.
D
Despite receipt of the notice, none entered appearance on behalf of the
sole respondent.
Briefly stated the facts are as follows:-
E
On 27.7.1989, the respondent deposited an amount of Rs.15,000 for
allotment of MIG House in Barari Housing Colony in Bhagalpur, Bihar,
under the Bihar State Housing Board (Management and Disposal of Housing
Estate) Regulation 1983 (hereinafter the Regulation). Under the Regulation,
the allotment of plots/house/flat is to be made by draw of lottery. The
F respondent was unsuccessful in the draw of lottery and so he could not be
allotted a house under the MIG category. On 28.7.1993, the respondent
issued legal notice to the appellant for refund of an amount of Rs.15,000.
The aforesaid notice was replied by a letter dated 6.10.1993 by the appellant,
directing the respondent to submit original pay-in-slip for the purpose of
refund. On 15.11.1994, the respondent submitted the original pay-in-slip.
G Thereafter, the appellant refunded Rs. l 5,000 to the respondent vide cheque
No.223231 dated 6.12.1 <)95. On 26.3.1996, the respondent filed a complaint
before the District Forum. The District Forum passed an Award directing
the appellar.t to pay Rs.15,000 with 18% interest. The appellant was also
directed to pay Rs.5,000 as compensation. Being aggrieved, the appellant
H filed an appeal before the State Consumer Commission, which was rejected,
BIHAR STATE HOUSING BOARD v. ARUN DAKSHY [SEMA, J.] 821
being barred by limitation.
A
Notice was issued limited to the question of rate of interest.
At this stage, it may be noted that the contention of the appellant,
before the Commissions was that as per Regulation 4" of the Regulation, B
simple interest @ 5% will be payable on an amount of earnest money. It
would appear from the impugned order of the National Commission dated
5th October, 200 l, the same contention was also raised before the Commission without any result. It was also brought to the notice of the Commission
that in an identical case in Civil Appeal Nos.1566-67 of 1997 arising out
of S.L.P ( C ) Nos.26021-22 of 1995 titled Bihar State Housing Board &
Ors. v. Vijay Sharan & Ors. disposed of on I 7.2.1997, this Court held that
the respondents are entitled to interest @ 5% under Regulation 45 of the
Regulation instead of awarded interest @ 11 %. This Court further pointed
out that when the Regulation fixed the rate of interest, the Commission could
not give a direction to pay the interest contrary to the interest regulated by
the statute.
It is noticed that in the impugned order while affirming the Award of
interest @ 18% awarded by the District Forum and the State Consumer
Commission, the National Commission referred to the interest awarded @
18% by the Commission in the case of HUDA v. Darsh Kumar. Awa,ding
of interest@ 18% by the National Commission in Darsh Kumar (supr,a) was
considered by this Court in the case of Ghaziabad Developme•t Authority
v. Balbir Singh, [2004] 5 SCC 65, where this Court deprecated the Award
of 18% interest at a flat rate after threadbare discussion. It was held in
paragraph l 0 of the judgment as under:-
"As has been set out hereinabove, the National Forum has been
awarding interest at a flat rate of 18% per annum irrespective of
the facts of each case. This, in our view, is unsustainable. Award
of compensation must be under different separate heads and must
vary from· case to case depending on the facts of each case."
Learned counsel for the appellant contended and in our opinion rightly,
that the Commission should not have travelled beyond the interest regulated
c
D
E
F
G
by the statutory regulation, which fixed at 5% and awarding 18% interest
dehors the Regulation 45 of the said Regulation. In the instant case, in the H
822
SUPREME COURT REPORTS (2005] SUPP. 2 S.C.R.
A
Regulation itself namely Regulation 45 provides that the simple interest @
5% will be payable on the money so deposited. The Regulation being selfcontained and the interest payable under the Regulation being regulated by
the statute under Regulation 45 of the Bihar State Housing Board Regulation, the Commission should not have travelled beyond the pale of statutory
B Regulation, apart from awarding interest @18% at the flat rate being deprecated by this Court in Balbir Singh (supra).
For the reasons aforestated, the impugned orders are not sustainable
in law and they are being quashed and set-aside. The respondent is entitled
to interest @ 5% as envisaged under the Regulation 45. The Award of
C compensation ofRs.5000·is also set-aside. The appeal is allowed. No costs.
D.G.
Appeal allowed.