In a final ruling on a protracted consumer dispute, the National Consumer Disputes Redressal Commission (NCDRC) has directed the Army Welfare Housing Organization (AWHO) to pay a balance amount of over Rs. 6.73 lakh to a homebuyer, Lt. Col. Sarfraz Singh, along with 12% annual interest. This decision marks the culmination of a legal battle that began with a consumer complaint filed by Lt. Col. Singh in 2019.
The case's timeline involved multiple legal forums, including the State Commission, the NCDRC, and the Supreme Court. The initial dispute centered on the AWHO's failure to provide essential documents like a Fire Fighting Certificate and an Occupancy Certificate, as well as the imposition of questionable charges. The State Commission partly ruled in favor of the homebuyer, but both parties filed cross-appeals, escalating the matter to the NCDRC.
The NCDRC initially ordered the AWHO to refund the entire amount deposited by the homebuyer with 9% interest, which would increase to 12% if not paid within two months. When the AWHO appealed, the Supreme Court dismissed the appeal, giving the organization a final two-week window to pay the amount with 9% interest before the 12% rate would be reinstated.
The Heart of the Dispute: Calculations and Legal Principles
The final appeal before the NCDRC was primarily an execution appeal, focused on the correct calculation of the outstanding amount. The AWHO had deposited Rs. 98,55,997 on April 22, 2022, well within the two-week deadline set by the Supreme Court. However, the homebuyer contended that there was a shortfall of over Rs. 23 lakh in the amount paid. The AWHO, on the other hand, claimed that it had paid a surplus and was owed money back, citing a charge for the homebuyer's unauthorized possession of the unit.
The NCDRC addressed these contentions by applying well-settled legal principles from prior Supreme Court judgments, including the principle of appropriation. According to this principle, if a deposited amount is less than the total sum due (including interest and costs), the payment is first applied towards interest, then costs, and finally the principal. Applying this, the Commission found the AWHO's claim of a surplus payment to be untenable. It also noted that no previous order from any court had authorized a deduction for "unauthorized possession," making the AWHO's claim in this regard legally invalid.
After a detailed review of the calculations from both parties, the NCDRC determined that the AWHO still owed a balance of Rs. 6,73,120. The court's order makes it clear that since the full amount was not deposited within the Supreme Court's stipulated two-week period, the higher interest rate of 12% per annum would apply to this outstanding amount, starting from April 25, 2022, until the full amount is paid. The AWHO has been given one month to comply with this order.
Consumer Protection Act, 1986
