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Issues: (i) whether consumer fora could mechanically award interest at 18% per annum in all development-authority cases without examining the facts and the actual loss or harassment suffered; (ii) whether, in cases of deficiency in service or misfeasance in public office, compensation could include amounts for harassment, mental agony, escalation in cost, or refund with reasonable interest; (iii) whether interest could be withheld for the period during which a stay order operated and whether amounts awarded had to be complied with pending appeal absent a stay.
Issue (i): whether consumer fora could mechanically award interest at 18% per annum in all development-authority cases without examining the facts and the actual loss or harassment suffered.
Analysis: Compensation under the consumer law is not a fixed formula. It must correspond to the nature of the wrong, the loss suffered, and the facts of each case. A flat award of 18% per annum in every case, without any factual inquiry, ignores the distinction between cases where possession is delivered late, cases where possession is refused, cases involving cancellation of schemes, cases where only refund is directed, and cases involving different periods of delay and different levels of prejudice. The proper approach is to determine the actual loss or injury and then award compensation under appropriate heads, with interest being only one possible component.
Conclusion: The practice of granting 18% interest mechanically in every case was held unsustainable.
Issue (ii): whether, in cases of deficiency in service or misfeasance in public office, compensation could include amounts for harassment, mental agony, escalation in cost, or refund with reasonable interest.
Analysis: The consumer law was held to have a wide reach, including service rendered by statutory authorities. Where there is deficiency in service or oppressive, arbitrary, capricious, negligent, or mala fide conduct amounting to misfeasance in public office, the forum may award compensation for actual loss, expected loss, harassment, physical or mental suffering, and escalation in construction cost. The compensation must be separately worked out under relevant heads and may also include interest where money is wrongly retained or refunded. However, such relief must be based on recorded findings and material circumstances, not on a blanket rate applicable to all matters.
Conclusion: Compensation for loss, harassment, mental agony, and escalation in cost was held permissible, but only on the facts of each case and not at a uniform rate in every matter.
Issue (iii): whether interest could be withheld for the period during which a stay order operated and whether amounts awarded had to be complied with pending appeal absent a stay.
Analysis: Where possession could not be delivered because a stay order was operating, no interest was payable for that protected period. The authorities were also obliged to comply with forum orders unless a stay had been obtained from a higher forum; the mere filing of an appeal or revision did not suspend compliance. The decision therefore preserved exclusion of the stay period while clarifying that pending challenges do not, by themselves, excuse non-compliance.
Conclusion: Interest was not payable for the stay period, and orders remained enforceable unless stayed by a higher forum.
Final Conclusion: The law was settled that compensation in consumer disputes against development authorities must be individualized and reasoned, that blanket 18% interest cannot be imposed as a universal rule, and that compliance with award orders cannot be avoided merely because an appeal has been filed.
Ratio Decidendi: Compensation for consumer loss against public authorities must be assessed on the facts of each case and may include interest only as a component of reasoned compensation; a uniform mechanical rate is impermissible, while the existence of a stay order excludes liability for the stayed period.
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