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This is an archive article published on April 12, 2010

Court bats for DDA vs buyer

Consumer court gives relief to DDA,justifies interest on flat

The National Consumer Commission has set aside the order of the lower fora against DDA,justifying the interest charged by it on a fully constructed flat from the backdate so as to bring new allottees at par with the older ones in terms of its cost.

“The actual period interest (on the cost of the flat) is required to be paid in order to bring the new allottee at par with the original allottees or else the former would run away with undeserved gain,resulting in discrimination between allottees under the same scheme,” the Commission said.

The Commission bench,comprising President Justice Ashok Bhan and Member S K Naik,also said that pricing was a subject matter of policy and even for fully constructed flats,it could be said that the cost would vary with time.

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It passed the order on a revision petition filed by DDA seeking to set aside the order of the Delhi State Commission directing the authority to pay Rs 10,000 compensation along with other benefits.

Complainant S K Sharma had contended that interest charged from him was illegal as the flat was allotted in April,1991 while it was assessed from 1986.

Sharma said a sum of Rs 1.13 lakh has been charged as actual period interest,for which there was no justification as he was a registrant only with effect from 1991 and DDA could not charge interest from a back date.

“It has been explained that the construction of the flats started in 1986 and four installments had fallen due by the time Sharma entered the (self financing) scheme and,therefore,the charging of actual period interest is perfectly in order,” the Commission said,while rejecting Sharma’s argument.

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The self financing scheme was based on the concept of financial participation of prospective allottees that means the construction activities were undertaken on the strength of payments received from them,it said.

Sharma,being aggrieved after the DDA charged interest from the backdate,had approached Delhi District Forum,which had directed it to refund the entire amount charged as interest for the period from 1986 to 1991.

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