TaxTMI 
TaxTMI 
2000 (5) TMI 963
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....Appearing Parties. JUDGMENT Lahoti, J.-Leave granted in SLP(C) No. 18897 of 1999. 2. In this batch of appeals, Ghaziabad Development Authority constituted under section 4 of the Uttar Pradesh Urban Planning and Development Act, 1973 is the appellant. The authority has from time to time promoted and advertised several schemes for allotment of developed plots for construction of apartments and/or flats for occupation by the allottees. Several persons who had subscribed to the schemes approached different forums complaining of failure or unreasonable delay in accomplishing the schemes. Some have filed complaints before the Monopolies and Restrictive Trade Practices Commission (MRTP Commission) and some have raised disputes before the ....
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....to an amount of Rs. 50,000 payable as compensation for 'mental agony' suffered by the claimants for failure of the authority to make available the plot as promised by it. 3. As all these appeals raise the following common question of law, they have been heard together and are being disposed of by this common judgment. The question arising for decision are : (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 ....
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....obligation in some way or the other. The damages may be liquidated or unliquidated. Liquidated damages are such damages as have been agreed upon and fixed by the parties in anticipation of the breach. Unliquidated damages are such damages as are required to be assessed. Broadly the principle underlying assessment of damages is to put the aggrieved party monetarily in the same position as far as possible in which it would have been if the contract would have been performed. Here the rule as to remoteness of damages comes into play. Such loss may be compensated as the parties could have contemplated at the time of entering into the contract. The party held liable to compensation shall be obliged to compensate for such losses as directly flow ....
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....f the use of the land for the period of delay, viz., usually its rental value, See Chitty on Contracts, Vol. 1 (para 26.045). 7. In our opinion, compensation for mental agony could not have been awarded as has been done by the MRTP Commission. 8. However, the learned counsel for the respondents has invited our attention to Lucknow Development Authority v. M.K. Gupta [1994] 1 SCC 243 wherein this court has upheld the award by the Commission of a compensation of Rs. 10,000 for mental harassment. The basis for such award is to be found in paras 10 and 11 wherein this court has stated inter alia - "Where it is found that exercise of discretion was mala fide and the complainant is entitled to compensation for mental and physical harassment....
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....ctices Act, 1969 and UP Urban Planning and Development Act, 1973 enabling the award of such interest has not been brought to our notice. The learned counsel for the claimants have placed reliance on a recent decision of this court in Sovintorg (India) Ltd. v. State Bank of India [1999] 6 SCC 406 wherein in similar circumstances the National Consumer Disputes Redressal Commission directed the amount deposited by the claimants to be returned with interest at the rate of 12 per cent per annum. This court enhanced the rate of interest to 15 per cent per annum. To sustain the direction for payment of interest reliance was placed on behalf of the claimants on section 34 of the Code of Civil Procedures, 1908 ('CPC') and payment of interest at the ....
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....ve served the ends of justice." (p. 409) 10. We are, therefore, of the opinion that interest on equitable grounds can be awarded in appropriate cases. In Sovintorg (India) Ltd.'s case (supra) the rate of 15 per cent per annum was considered adequate to serve the ends of justice. The court was apparently influenced by the fact that the claimant had to suffer winding up proceedings under the Com-panies Act and the defendant must be made to share part of the blames. However, in the cases before us, the parties have not tendered any evidence enabling formation of opinion on the rate of interest which can be considered ideal to be adopted. The rate of interest awarded in equity should neither be too high nor too low. In our opinion awarding i....