Court No. - 52
Case :- WRIT - C No. - 18812 of 2019 Petitioner :- M/S M.R. Mittals Infratech Pvt. Ltd.
Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Ankita Jain,Siddharth Singhal Counsel for Respondent :- C.S.C.,Wasim Masood
Hon'ble Ram Surat Ram (Maurya),J. Hon'ble Rajiv Gupta,J.
Heard Sri Siddharth Singhal, learned counsel for the petitioner and Sri Wasim Masood, learned counsel for respondent no. 2.
This writ petition has been filed for quashing the notice dated 17.5.2019 issued by U.P. Real Estate Regulatory Authority through Authorized Officer for payment of interest at the rate of MCLR + 1% interest.
It is admitted that petitioner is a developer and he has collected money from respondent nos. 3 and 4 in the year 2012. Now about 7 years have passed and respondent nos.
3 and 4 have not been given any possession over the allotted accommodation. Therefore, under the law of the land, they are entitled to claim interest. The notice directing the petitioner to pay interest is in accordance with law.
Counsel for the petitioner submits that the relevant provision under the Act came into force on 1.5.2017. Therefore, prior to coming into force of the provision of the Act, the petitioner is not liable to pay interest. According to the provision of the Real Estate Regulation and Development Act, 2016, the notice is without jurisdiction.
We have considered the arguments of the counsel for the petitioner.
Supreme Court in Central Bank of India v. Ravindra, (2002) 1 SCC 367, has held that the words 'interest' and 'compensation' are sometimes used interchangeably and on other occasions they have distinct connotation. 'Interest' in general terms is the return or compensation for the use or retention by one person of a sum of money belonging to or owed to another. In its narrow sense, 'interest' is understood to mean the amount which one has contracted to pay for use of borrowed money. … In whatever category 'interest' in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus, it is a charge for the use or forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties, or permitted by custom or usage, for use of money, belonging to another, or for the delay in paying money after it has become payable."
Supreme Court in Thazhathe Purayil Sarabi v. Union of India, (2009) 7 SCC 372, has held that even though there is no provision in either of the Acts for payment of interest on the awarded sum, there is no denying the fact that the right to claim compensation accrued on the date of the incident, although compensation has to be computed from the date of the award of the Claims Tribunal. In cases where the statute does not make any specific provision for payment of interest on any awarded sum, the power of the courts to grant interest can also be referred to from the provisions of the Interest Act, 1978 and the Code of Civil Procedure.
Payment of interest is basically compensation for being denied the use of the money during the period in which the same could have been made available to the claimants.
In Union of India v. Tata Chemicals Ltd., (2014) 6 SCC 335, has held that while awarding interest, it is a kind of compensation of use and retention of the money collected unauthorisedly by the Department. When the collection is illegal, there is corresponding obligation on the Revenue to refund such amount with interest inasmuch as they have retained and enjoyed the money deposited.
In the light of aforesaid judgments of the Supreme Court, it is clear that a person who holds money from others, is liable to pay interest. Under the general law, liability to pay the interest is upon the petitioner, therefore, we are not inclined to interfere in the matter.
The writ petition is dismissed.
So far as the argument that respondent no. 2 has no jurisdiction is concerned, even if we decline to examine this issue as liability of the petitioner, to pay interest under general law is very much there.
Order Date :- 30.5.2019 KU