Ghaziabad Development Authority vs Union Of India & Anr.
| Citation | AIR 2000 SC 2003 |
| Date of Judgment | 12/05/2000 |
| Court | Supreme Court of India |
| Case Type | SLP(C) No.18897/99. |
| Appellant | Ghaziabad Development Authority |
| Respondent | Union Of India & Anr |
| Bench | R.C.Lahoti, S.R.Babu |
| Referred | section 4 of the Uttar Pradesh Urban Planning and Development Act, 1973.Article 226 , Article 14 of the Constitution.Indian contract act and specific relief act.Section 34 of the Civil Procedure Code. |
FACTS OF THE CASE
The Ghaziabad Development Authority launched the Indirapuram Scheme, a programme for the distribution of constructed plots, in C.A. No. 8316/1995. The claimants were advised by the authority that a plot measuring 35 square metres had been set aside for them, with an estimated cost of Rs. 4,20,000 payable over a period of time. The plot’s allocation was also disclosed. The claimants were later informed that there had been a delay in giving them possession because of some unforeseen circumstances and the incomplete development work. After an excessive amount of waiting, the claimants contacted the MRTP Commission. The brochure that a development authority releases for public information when it publishes a plot allocation plan is an invitation to bid. Applications from the general public are welcome in order to take advantage of the scheme’s benefits. Such programmes are accessible. A contract between the applicant and the authority results from some of the offers being approved under the authority’s established rules of priority or preference. Except when the legislation applicable to the Authority floating the plan applies, the provisions of the Contract Act and the Specific Relief Act would be used to determine the legal relationship controlling performance and consequences resulting from a breach. Various programmes for the allocation of developed plots for the construction of apartments and/or flats for the habitation by the allottees have been promoted and marketed from time to time by the Authority. Many people who had signed up for the schemes went to various forums and complained about failure or unreasonably long delays in completing the programmes. Others have brought complaints to the Consumer Disputes Redressal Forum and the Monopoly and Restrictive Trade Practises Commission, respectively. Two civil writ petitions under Article 226 of the Constitution were submitted to the High Court, each of which asked for a reimbursement of the money the petitioners had paid or deposited with the Authority. The typical types of damages covered by land purchase contracts are established. The market worth of the property at the stated time for completion, less the contract price, is what the vendor must pay as compensation for the purchaser’s loss of bargain if they violate the agreement by failing to transmit the land to the buyer. If the seller has actual or alleged knowledge of the loss of profit the buyer anticipated to make from a specific use of the land, the loss may be recovered. Damages for performance delays often take the form of the land’s worth as used during the delay, which is typically its rental value.
ISSUES
(i) Whether compensation can be awarded for mental agony suffered by the claimants?
(ii) Whether in the absence of any contract or promise held out by the Ghaziabad Development Authority any amount by way of interest can be directed to be paid on the amount found due and payable by the Authority to the claimants?
(iii) If so, the rate at which the interest can be ordered to be paid?
ARGUMENTS PETITIONER
In contract disputes, damages for mental anguish or loss of reputation are not frequently granted. There are, however, certain exceptions. Damages may be granted, for instance, if the contract was intended to offer tranquility or freedom from anguish or if both parties foresaw such losses as a possible result of a breach. Such agreements might be made while reserving a hotel, vacation, or theatre seat.
Plans for allocating developed plots for the construction of apartments and flats have been advertised by the Authority. Some subscribers have, however, voiced complaints about delays or failures in the completion of the schemes. They have contacted a number of organisations, such as the Consumer Disputes Redressal Forum and the Monopoly and Restrictive Trade Practises Commission. Two cases were filed before the High Court, seeking refunds of deposits. The Authority must improve its processes and complete schemes on time to regain trust and maintain its reputation.
ARGUMENT RESPONDENT
There was no contract regarding payment of interest on delayed deposit or delay in service by the opposite party. Interest cannot be claimed under Section 34 of the Civil Procedure Code. The provisions of Section 34 have not been specifically made applicable to proceedings under the Act.
JUDGEMENT
In cases involving contracts, damages for emotional harm or mental anguish to the plaintiff are typically not granted. This comprises losses brought on by a contract breach in terms of pain and suffering, annoyance, reputational harm, or social disrepute. However, there is an exception for contracts that offer comfort or escape from anxiety, such making travel arrangements for a far-off vacation. Another exemption is when the parties contemplated such damages when they entered into the agreement. The direction made by the MRTP Commission for payment of Rs.50,000/- as compensation for mental agony suffered by the claimants-respondents. The interest rate granted on equity should not be too high or low. In the scenarios under consideration, we think a 12% annual interest rate would be appropriate and fair. Only when the claimant is accountable for the events that led to the refund should the Development Authority’s brochure clause, which indicates that it is not obligated to pay interest in case of a refund, be put into effect. In the cases that are the subject of an appeal, the Authority is at fault. Therefore, the Authority lacks any grounds for objecting to a refund of the claimant’s money plus interest.
REFERENCES
This Article is written by Anish Kumar student of Presidency university,Bangalore; Intern at Legal Vidhiya.
