LexGREATER MOHALI AREA DEVELOPMENT AUTHORITY (GMADA) THROUGH ITS ESTATE OFFICER (H) versus ANUPAM GARG ETC.
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[2025] 7 S.C.R. 380 : 2025 INSC 808 Greater Mohali Area Development Authority (GMADA) Through Its Estate Officer (H) v. Anupam Garg Etc. (Civil Appeal No(s). 7392-93 of 2025) 04 June 2025 [Sanjay Karol* and Prasanna B. Varale, JJ.] Issue for Consideration Matter pertains to correctness of the order passed by the National Commission imposing liability on the Development Authority to pay for interest paid by the respondents-buyers for loans secured for the flat, on account of delay in delivery of possession of flats. Headnotes† Consumer Protection Act, 1985 – Compensation – Liability of the Development Authority to pay interest on the loan taken by the buyers for delay in delivery of flats/plots – On facts, consumer complaint by the buyer for refund of money paid on account of delay in delivery of flat – Direction by the State Commission to the Development Authority to refund the entire amount deposited by the buyers in respect of securing flats along with 8% interest and additional costs for mental harassment, litigation and the interest paid by buyers to the Bank for the loans secured to arrange for the funds to be invested in the project – Appeal thereagainst dismissed – Interference with, as regards the award of interest on the loan taken by buyers to be paid to the Development Authority: Held: Commission was to compute an amount as compensation, in which one of the factors would be that in order to secure a property in the scheme floated by the Development Authority, the buyers had taken out a loan and would be liable to pay interest thereon – However, this order does not permit the interest on the loan, in its entirety, to be saddled by the authority responsible for the housing scheme and the delay – Orders of the Commissions does not reveal any exceptional or strong reasons for the interest on the loan taken by the buyers to be paid by the Development Authority – Whether the buyers of the flat do so by utilizing their * Author [2025] 7 S.C.R. 381 Greater Mohali Area Development Authority (GMADA) Through Its Estate Officer (H) v. Anupam Garg Etc. savings, taking a loan for such purpose or securing the required finances by any other permissible means, is not a consideration that the developer of the project is required to keep in mind – The one who is buying a flat is a consumer, and the one who is building it is a service provider – That is the only relationship between the parties – If there is a deficiency or delay in service, the consumer is entitled to be compensated for the same – Repayment of the entire principal amount along with 8% interest thereon, as stipulated in the contract, alongside the clarification that there would be no other liability on the authority, sufficiently meets this requirement – Amount of interest awarded is the compensation to the investment maker for the amount of money and the time he has been denied the fruits of that investment – 8% interest awarded on the entire amount that is being invested, is the compensation for being deprived of the investment of money – Apart from this no amount of interest on the loan taken by the buyers could have been awarded. [Paras 13, 15, 17, 18] Case Law Cited National Seeds Corporation Ltd. v. M. Madhusudan Reddy [2012] 2 SCR 1065 : (2012) 2 SCC 505; Greater Mohali Area Development Authority v. Priyanka Naiyyar, 1st appeal No. 1456 of 2016; Bangalore Development Authority v. Syndicate Bank [2007] 7 SCR 47 : (2007) 6 SCC 711; GDA v. Balbir Singh [2004] 3 SCR 68 : (2004) 5 SCC 65; DLF Homes Panchkula (P) Ltd. v. D.S. Dhanda [2019] 7 SCR 1061: (2020) 16 SCC 318 – referred to. List of Keywords Compensation; Consumer; Scheme of Residential flats; Greater Mohali Area Development Authority; Interest paid on loans for investing in project; Delay in delivery of possession of flats; Additional costs for mental harassment and litigation; Service provider; Deficiency or delay in service. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 7392-7393 of 2025 From the Judgment and Order dated 01.04.2019 of the National Consumers Disputes Redressal Commission, New Delhi in FA Nos. 1852 and 1853 of 2018 382 [2025] 7 S.C.R. Supreme Court Reports Appearances for Parties Advs. for the Appellant: Ms. Vagisha Kochar, Ms. Nancy Shah, Prashant Manchanda. Advs. for the Respondents: Gagan Gupta, Sr. Adv., Ananta Prasad Mishra, Saurabh Gupta, Jasbir Singh. Judgment / Order of the Supreme Court Jud
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