K. L. SUNEJA & ANR versus DR. (MRS.) MANJEET KAUR MONGA (D) THROUGH HER LR & ANR on 31 January 2023

1. There are two appeals preferred against a common order ofthe National Company Law Appellate Tribunal (hereinafter, “NCLAT”/”Tribunal”). The first, by the original home buyer’s legal representative(hereinafter, “complainant”) and the second by the builder / developer(hereinafter, “developer”).

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2. In 1989, one Smt. Gursharan Kaur had applied for a flat in aproposed group housing scheme called ‘Siddharth Shila Apartments’,situated at Plot No. 24 in Vaishali Scheme, Ghaziabad, U.P. (hereinafter,“Scheme”). After depositing three instalments towards the flat, she passedaway, and was succeeded by her daughter-in-law Dr (Mrs.) ManjeetKaur Monga, who deposited the fourth instalment. Thereafter, thedeveloper issued an allotment letter dated 21.05.1992, earmarking FlatNo. D-301 (3[rd] floor) with a super built- up area of 1375 sq. ft. in theScheme. Dr Manjeet Kaur Monga deposited two further instalments,with the sixth instalment deposited in September 1993. Eight years later,i.e., in December 2001, a demand notice for payment of the eighth andninth instalments was issued to the complainant. She resisted this notice,as there was no intimation about the progress of work and delivery ofpossession of flat to her. The developer however, issued a letter thereafter,cancelling the allotment of the complainant’s flat on 30[th] April 2005. The F

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Acomplainant had deposited seven instalments up to 4[th] October 1993totalling ` 4,53,750/-. With the cancellation letter, the developer encloseda Pay Order dated 30[th] April 2005 for ` 4,53,750/- issued by Citibanktowards full refund of payments made by the complainant towards theflat.

B3. Aggrieved, the complainant through her lawyer, issued a noticedated 7[th] September 2005 to the developer, stating that she was alwaysready and willing to pay the instalments towards the flat, in tune with theallotment letter, but the developer did not keep up its part of the bargainregarding timeliness of delivery of possession and quality of construction.The notice alleged that even 40% of the construction work had not beenCcompleted till the seventh instalment, though the complainant had paid acumulative of ` 4,53,750/-. She demanded possession of the flat besidesclaiming ` 25,00,000/- as compensation. With the notice, the complainantreturned the Pay Order of ` 4,53,750/-. She also sent a cheque of` 1,00,000/- expressing willingness to pay the price of the flat. TheDdeveloper replied to the notice on 26[th] September 2005 denying theallegations of delay in construction and accused the complainant of defaultin payment of instalments. However, the developer did concede to slightdelay in completion of the project due to litigation with the GhaziabadDevelopment Authority.

E4. Dr. Manjeet Kaur Monga filed a complaint under Section 36of the (then) Monopolies and Restrictive Trade Practices Act, 1969(hereinafter, “MRTP Act”) alleging unfair trade practice by the developer.The complaint claimed physical possession of the flat or an alternativeflat of the same size and dimension. The complainant also applied underSection 12A of the MRTP Act seeking to restrain the developer fromFalienating flat D-301 in Siddharth Shila Apartments; she also filed C.A.No. 39/2009 for award of compensation of ` 25,00,000/- under Section12B of MRTP Act alleging to be a victim of unfair trade practice at thehands of the developer. The MRTP Commission disposed off theapplication filed under Section 12A of the MRTP Act restraining theGdeveloper from creating third party interest with respect to the flat. Thedeveloper also resisted the complaint and claimed that the complainantwas disentitled to any relief under the MRTP Act. It was further allegedthat the complainant had failed to deposit payments in accordance withthe plan in the allotment letter and that she had, in terms of her letterdated 22[nd] May 2002, shown disinclination to take possession of the flatH

by alleging breach of confidence on the part of the developer. The Noticeof Enquiry issued by the Commission was resisted on similar grounds.

5. Issues were framed for adjudication, which included whetherthe developer had indulged in unfair trade practice, whether they wereprejudicial to the interest of the complainant and / or the public in general.The MRTP Act was repealed by Section 66 of the Competition Act,2002 which was brought into force w.e.f. 1[st] September 2009. ChapterVIII-A introduced subsequently provided for establishment of anAppellate Tribunal to hear appeals against orders passed by theCompetition Commission of India. The matters pending before MRTPCommission were transferred to the (then) Competition Appellate Tribunal(hereinafter, “COMPAT”). By order dated 29[th] July 2011, COMPATframed issues in the application filed under Section 12B of the MRTPAct. The issues related to maintainability of the petition; whether unfairtrade practice had been proved; and if so, were they prejudicial to thepublic; and also, if the complainant was entitled to any compensation.

6. Having regard to the evidence produced, COMPAT by its order[1]concluded that the developer had falsely represented to the general public(including the complainant) the time within which the project was to becompleted, i.e., three years, but did not complete the construction formore than a decade. The COMPAT held the developer guilty of unfairtrade practice under Section 36-A (1) (i), (ii) & (ix) of the MRTP Actand also ruled that the complainant was justified in not paying furtherinstalments and the developer committed illegality by cancelling theallotment. Noticing the law laid down by this court in GhaziabadDevelopment Authority vs. Ved Prakash Agarwal,[2]COMPAT heldthat it and its predecessor (MRTP Commission) could not assume thepowers of a civil court to grant relief akin to specific performance. Hence,it declined the relief of delivery of possession of the flat. The COMPAThowever directed the developer to pay compound interest @ 15% perannum to the legal representatives of the complainant with interestcalculated on each instalment from the date of its deposit till 30[th] April2005, i.e., the date on which the allotment was cancelled. Besides, therespondents were directed to pay the amount already invested by the 1Dr (Mrs) Manjeet Kaur Monga vs. Mr K.L. Suneja, Civil Appeal No. 39/2009, dated 3[rd] August 2015.

2Ghaziabad Development Authority vs. Ved Prakash Agarwal, C.A. No. 794/2001,dated 14[th] May 2008.

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Acomplainant, i.e., ` 4,53,750/-, to the legal representatives of thecomplainant.

7. COMPAT’s order was challenged by both the complainant andthe developer through separate appeals before this court, which by itsorder dated 18[th] July 2017,[3] upheld the award of compensation to legalBrepresentatives of the complainant in terms of the formula adopted bythe COMPAT. This court observed as follows:

“… Merely because a liquidated amount is not stipulated ordetermined by the Tribunal, it cannot be said that it is not thecompensation. Once the interest, as ordered by the Tribunal,Cis calculated that will be the amount of compensation referredto under section 12-B of the Act.”

8. This court also noticed the contentions of the developer thatwhen it had taken the Pay Order from Citibank on 30[th] April 2005, theamount of ` 4,53,750/- covered by that instrument had been deductedDfrom its current account. It was not however received by the complainantpayee. The account holder / developer cancelled the Pay Order andrequested for re-credit of the amount; which was done by Citibank on22[nd] June 2016. The court also noted the contention of Citibank that themoney deducted from current account of the developer in April 2005,though not paid to the payee, was not enjoyed by the bank as the PayEOrder could have been presented at any moment. This court observedthat both these issues had not been considered by COMPAT, apparentlybecause these aspects were not addressed and Citibank was not a partybefore the Tribunal. The court therefore disposed of the appeals byremitting the matter to COMPAT with directions to implead Citibank asFan additional respondent. Additionally, the developer was directed to paythe compensation worked at 15% compound interest up to 30[th] April2005. The last issue which COMPAT was to consider on remand waswhether there should be any compensation and if so, what should be theamount payable after 30[th] April 2005 and whether Citibank was liable topay any interest to the account holder.

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Impugned Order of the NCLAT

9. After remand, the complainant impleaded Citibank as arespondent. All respondents were allowed to file their respective affidavits 3Dr (Mrs) Manjeet Kaur Monga (Thr. LH Karan Vir Singh Monga) vs. Mr K.L. Suneja,HCivil Appeal No. 5032 / 2017, dated 18[th] July 2017.

in regard to payment of interest, if any, payable to the complainant from1[st] May 2005 onwards. By the impugned order, NCLAT noticed thefacts leading to the order of this Court, including that the complaint wasfiled in 2005 along with the original Pay Order, issued at the behest ofthe developer by Citibank, which had been returned initially by thecomplainant, but given back to the complainant. The NCLAT alsoconsidered the affidavit and pleadings of the parties, including Citibank,and noted that according to circulars, the amount of ` 4,53,750/- hadbeen deducted from the developer’s account and that Citibank too didnot enjoy any interest on that amount, during pendency of the complaintbefore COMPAT. The impugned order noted that the legal representativesof the complainant did not get the refund of ` 4,53,750/- in terms oforder dated 3[rd] August 2015 by COMPAT as funds were credited backto the account of the developer on 16[th] June 2016 and a fresh Pay Order(bearing No. 262910) dated 16[th] June 2016 was issued by Citibank.Ultimately that amount was made over to the complainant on 7[th] May2016, in compliance with this court’s orders dated 8[th] and 26[th] April 2016.The NCLAT, by the impugned order, directed as follows:

“It is accordingly found that the direction of COMPAT in termsof order dated 3rd August, 2015 in regard to payment ofPrincipal amount of Rs.4,53,750/- stood not complied withtill 7th May, 2016. In view of the same, the legal representativesof the Complainant would be entitled to further compensationin the form of compound interest @ 15% per annum on theprincipal amount of Rs.4,53,750/- w.e.f. 1st May, 2005 till7th May, 2016 further entitled to pendente lite and futureinterest till realization of the accumulated arrears fromRespondents No. 1 and 2. (i.e., the developer)”

Contentions of the Complainant

10. The arguments on behalf of the complainant were common toboth appeals. It was urged that NCLAT fell into error as it failed toappreciate that since the legal representatives of the complainant did notget the refund of the amount of ` 4,53,750/- from the developer until 7[th]May 2016, the interest on the said principal amount ought to run from 4[th]October 1993 till the date of realization of the amount i.e. 7[th] May 2016.

11. It was argued that once the Tribunal found that the developerwas in the wrong – a determination that was upheld by this court, which AB

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Aheld that the complainant was entitled to compensation, by way ofcompound interest – that direction had to be taken to its logical end,which meant that interest on the sum of ` 4,53,750/- was also payablefrom the date it was deposited with the developer (in 1993) till the amountwas realized. This was the only restitutionary and equitable order, havingregard to all circumstances of the case.B

12. It was submitted that the developer’s argument that the amounthad been deducted from its account, and that it was not aware about thefiling of the original Pay Order, could not be countenanced. Learnedcounsel highlighted, that moreover, the developer took full advantage ofthe amounts deposited by the complainant, and after cancelling theCallotment, had immediately allotted the flat to another purchaser, for aconsiderably higher sum of ` 21 lakhs. This fact was not disputed bythe developer. Therefore, the complainant could not be placed at adisadvantage, because the amounts deposited and lying with the developerhad multiplied manifold. The developer had the advantage (twice over)Dof obtaining consideration from the new allottee / purchaser.

Contentions of the Developer

13. The developer urged, in response to the complainant’s appeal,as well in its appeal, that no fault could be attached to it, and it could notbe fastened with any liability, once the Pay Order dated 30[th] April 2005Ewas received by the complainant. It was urged by senior counsel for thedeveloper that this court had carefully restricted the remand to whetherany liability arose due to any fault or deficiency on its part, after April2005, given that the Pay Order was not encashed by the complainant. Inthis connection, it was submitted that Citibank had categorically averredFthat the amount was deducted from the developer’s account, when thePay Order was issued. The bank also stated that the amount did notearn any interest, and was kept separately, in accordance with instructionsand directives of the Reserve Bank of India (hereinafter, “RBI”). Thedeveloper became aware that the Pay Order was part of the complaintfiled before the MRTP Commission for the first time on 29[th] April 2016,Gwhen a statement was made by the complainant’s counsel.

14. It was submitted that this court recorded that the Pay Orderwas on the file of the MRTP Commission, and consequently permittedits revalidation. It was in these circumstances, that the developerapproached the Commission, resulting in revalidation and subsequentHhanding over of the instrument to the complainant.

15. All these facts clearly established that the developer was notat fault; the complainant in fact acknowledged having received the PayOrder, returned by the developer, through letter dated 26[th] September2005. Learned counsel relied on the pleadings before the MRTPCommission, and pointed out that the index to the complaint and thedocuments filed along with it, nowhere mentioned or referred to theoriginal Pay Order.

16. It was submitted that having returned the amount, through themedium of the Pay Order, the developer had no further obligation to payfurther interest thereafter. It was submitted that the complainant wouldhave been justified in stating, if the facts were such that the amount waswith the developer, or lying in its account. However, once the amountwas debited from its account, and the Pay Order was made over to thecomplainant, who sought to return, it, but after that, was handed backthe Pay Order, the developer could not be held responsible.

17. Counsel for the developer relied on Order XXI Rule 1(4) and(5) of the Code of Civil Procedure, 1908 (hereinafter, “CPC”) to statethat once the amount in question was paid through the bank (i.e., throughan instrument issued by the bank, such as Demand Draft or Pay Order,as opposed to a cheque, “drawn on a bank”) the liability would cease.Counsel for the developer relied on the decisions in Hindustan PaperCorporation Ltd vs. Ananta Bhattacharjee[4]and in Gurpreet Singhvs. Union of India[5].

Analysis and Conclusion

18. For deciding this appeal, it is unnecessary to recount the entirespectrum of facts and analyse the rival contentions, so far as they relateto the liability of the developer for the period prior to 30[th] April 2005.The scope of the Tribunal’s remit, in this case, was defined by this court’sfinal order in the appeal decided by it earlier.[6] This court, after noticingthat the developer had applied for revalidation after the complainant hadurged before the court that the Pay Order had been deposited in theMRT Commission, further noted that the instrument had been revalidatedin 2016 and the amount was credited to the account of the developer on 4Hindustan Paper Corporation Ltd vs. Ananta Bhattacharjee, (2004) 6 SCC 213,dated 28[th] April 2004.

5Gurpreet Singh vs. Union of India, 2006 (8) SCC 457, dated 19th October 2006.

6Supra note 3, para 9.

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A22[nd] May 2016. The court then proceeded to frame the scope of theremand in the following terms:

“…To that limited extent, we propose to send back the mattersto the tribunal. Therefore, these appeals are disposed of asfollows:

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(1) Citibank NA represented by its manager, Jeevan Bhartibuilding 124 Connaught Circus, New Delhi will standimpleaded as additional respondent in the complaint beforethe Competition Appellate Tribunal, New Delhi.

(2) the builder shall pay the compensation worked out at theCrate of 15 percent compound interest up to 30-04-2005.

(3) whether there should be any compensation, and if so, whatshould be the amount payable after 30-04-2005, and whetherthe Citibank’s liable to pay in interest to the account holder(sic)by the Tribunal.

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To the above limited extent we remit the matters to theCompetition Appellate Tribunal, New Delhi.

It will be open to the parties to take all available contentionsin respect of the issues limited to, the Tribunal.”

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19. It is quite evident from the above that, with respect to the 30[th]April 2005 liability, this court had affirmed the findings of the COMPATand also negatived the contentions of the complainant’s legal heirs to theextent that separate compensation other than compound interest waspayable. The developer was therefore directed to pay as a measure ofFcompensation compound interest at 15% per annum for the entire period,i.e., 1993 to 2005. Since this court was apprised of the fact that thecomplainant had deposited the Pay Order before the MRTP Commission,it thought it appropriate to call for details from Citibank. After consideringthe affidavit and the materials placed before it, this court decided thatGthe appropriate course would be to limit the matter to consider whetherfor the duration after 2005, any liability could be attached to the developer.That was the rationale for the limited scope of the remand.

20. The materials on record would disclose that in this case, afterissuing notice, the complainant returned the Pay Order received by herHunder cover of letter dated 7[th] September 2005, however, the developer (in response to the complainant’s notice), by letter dated 26[th] September2005, denied the allegations contained in the notice and also returned thePay Order for ` 4,53,750/- and the banker’s cheque for ` 1 lakh. It isalso evident that on 7[th] October 2005, the complaint was filed. A copy ofthe complaint is on record. Curiously, it contains no mention of the PayOrder, nor does it say that the complainant filed the Pay Order in originalalong with the pleading. This is an undeniable fact. Even the counteraffidavit filed by the complainant in the developer’s appeal states thatshe:

“Bonafidely also deposited the Pay Orders dated 30-04-2005in the registry along with the complaint under protest incourt.”

21. Since the pleadings in the complaint did not refer to the PayOrder, which was attached in the original along with the complaint, thedeveloper’s reply too was silent on this aspect. This is evident from abare reading of the reply to the complaint before the MRTP Commissionfiled by the developer on 3[rd] February 2006. Likewise, the reply to theNotice of Enquiry, which was issued by the MRTP Commission, andfiled by the developer (supported by affidavit dated 25[th] January 2007)also does not allude to the Pay Order.

22. In the previous proceedings before this court, in thecomplainant’s appeal,[7] this court’s order, dated 29[th] April 2016 reads asfollows:

“The learned counsel for the appellant submits that theDemand Drafts furnished by the respondents have alreadybeen deposited before the MRTP Commission. The respondentsare free to move the Competition commission for withdrawalof the amount.

We record the statement of the appellant that in case, such anattempt is made by the respondents, the appellant shall notobject the withdrawal of the drafts/amounts”.

23. In terms of the leave granted by this court, through that order,the developer moved an application before the COMPAT, which issuedthe following directions on 18[th] May 2016:

7Supra note 3.

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“This is an application on behalf of respondent Nos. 1 and 2for release of Pay Order No. 885894 dated 30.04.2005 forRs.4,53,750/- drawn in favour of Dr. (Mrs.) Manjeet KaurMonga for revalidation thereof in the name of the legalrepresentatives of Dr. (Mrs.) Manjeet Kaur Monga.

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Shri Aditya Narain, learned counsel for the applicants statesthat his client will be satisfied if the pay order deposited in2005 is returned to his client for the purpose of renewal, ifany, 1n accordance with. law. Learned counsel for therepresentatives of the original complainant says that she doesnot have any objection.

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In view of the above, the application is allowed. The demandDraft No. 885894 dated 30.04.2005 lying in the registry ofthe Tribunal be returned to the applicants.”

24. These developments were part of the record, and the courtDwas aware of them as a consequence of which the final order dated 18[th]July 2017, disposing of the civil appeals, noted these facts:

“…During the course of hearing of the appeals anotherinteresting point came up for consideration. It has beenbrought to the notice of this Court that when the buildercompany, the appellant in the appeals arising out of SLP(C)Nos.10484-10485/2016, had taken the pay order from theCitibank on 30.04.2005, the amount of Rs.4,53,750/- coveredby the pay order had actually been deducted from their currentaccount. But at the same time, the amount had not been paid/received by the payee. In the instant case, the account boldercancelled the pay order and requested for re-credit of theamount and, accordingly, it is seen that the Citibank has re-credited the amount to the account only on 22.06.2016. It isthe contention of the account holder company that for theperiod the money was with the Bank, the account holder isentitled to interest and that can be the compensation if at allthat can be paid to the appellant in Civil Appeal Nos.5032-33/2016 for the period after the cancellation of the allotment.We may, of course, take note of the submission of the builderthat in terms of the principles of restitution under Section144 C.P.C. and on the general principle of restitution, the E

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builder cannot be put to unmerited injustice and the appellantshould not take the undue advantage as held by this Court inCitibank N.A. v. Hiten P. Dalal and Others, (2016) 1 SCC411, as canvassed by the learned counsel appearing for thebuilder.

7. Learned counsel appearing for Citibank, inviting ourreference to the additional affidavit contended that it is afact that the money from the current account of the builderhas been deducted on 30. 04. 2005 and it has not been paidto the payee. But, at the same time, it cannot be said that themoney was enjoyed by the Bank, since being a pay order, atany moment the instrument is presented, the Bank was boundto honour the same and, therefore, only for the lapse on thepart of either the payee or the account holder for encashingor cancelling the instrument, the Bank cannot be saddled withany interest. It is also submitted by the learned counselappearing for the Bank that they are governed by theinstructions issued by the Reserve Bank of India in that regard.

8. We find from the order of the Tribunal that both the issueshave not been gone into, apparently because these aspectshave not been canvassed and obviously because the Citibankwas not before the Tribunal.”

25. The counter affidavit filed by the complainant, to the developer’sappeal presently before us, contains the following averments:

“It is reiterated that the said Pay Order was sent by theAppellant No.2 to Respondent No. 1 vide cancellation letterdated 30.04.2005. Thereafter, the same was returned byRespondent No. l to the Appellants vide legal notice dated07.09.2005 following which the Appellants once againreturned the same back to Respondent No. l vide their replyto the legal notice dated 26.09.2005. It is submitted that theRespondent No. 1 then filed a Complaint under section 36 ofthe MRTP Act before the Ld. MRTP Commission and depositedthe said Pay Order dated 30.04.2005 in protest before theLd. MRTP Commission along with the said Complaint.”

26. A consideration of the pleadings and other materials points tothe fact that the complainant did not state anywhere, before the MRTP

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ACommission, that the original Pay Order was attached with thepleadings. Interestingly, the index or cover page to the complaint wasmade part of the additional written submissions of the developer dated12[th] February 2018 (before the NCLAT). This index to the pleadings inthe complaint did not refer to the Pay Order. It cannot be for a momentdisputed that the complainant was perhaps under a belief that filing suchBan original Pay Order established that she was not interested in receivingrefund, but was interested only to secure possession of the flat.Nevertheless, it was necessary for her to apply through counsel foran appropriate order to ensure that the amount was deposited in aninterest-bearing account. That step unfortunately was not taken –Cperhaps she was not advised to do so. It was only when for the first timewhen this was highlighted in the previous proceedings on 29[th] April 2016,that the developer sought and obtained permission to apply to theCOMPAT for revalidation. The order facilitating that step was made on18[th] May 2016, and eventually the Pay Order was revalidated on 22[nd]June 2016.D

27. From the impugned order, it is evident that the Tribunal acceptedthe explanation of Citibank that since the Pay Order in question hadbecome stale, its proceeds / funds were moved to its ‘Unclaimed SundryAccount’, and did not attract any interest in terms of the RBI directions.The bank had also deposed that the Pay Order was cancelled on theErequest of the developer through its letter dated 26[th] May 2016 and thatthe funds were credited back to the account of the developer on 16[th]June 2016. It was further noticed that the amount for issuing the PayOrder was deducted from the current account of the developer. Afternoticing these facts, the Tribunal appears to have been swayed by theFcircumstance that the developer was held liable for unfair trade practice,and directed to pay compensation (in terms of the previous orders of theCOMPAT) affirmed by this court, i.e., 15% compound interest on` 4,53,750/-.

28. In the opinion of this court, the impugned order has not restedGits findings on any principle of law, much less any statutory provision.The Tribunal appears to have been completely swayed by thecomplainant’s plight. In doing so, it did not give due consideration to thefact that ` 4,53,750/- was debited from the account of the developer.The complainant, for reasons best known to her, filed the original PayOrder due to perhaps lack of proper advice or instruction. Apparently,H

no order contemporaneously was sought from the MRTP Commission,which would have protected the interests of the complainant with respectto the money received even while ensuring that her contentions on themerits with respect to entitlement towards the flat were preserved. Manyavenues / alternatives were available. Firstly, the complainant couldhave sought for a deposit of the proceeds of the Pay Order in an account,to be maintained by the Registrar of the Commission. Secondly, shecould have sought for a ‘without prejudice’ order enabling her to encashthe amount, and at the same time ensure that her claim was not defeatedon that score. Thirdly, equally, she could have sought for appropriateorders that the amount be maintained by the developer, who could, in theevent it became necessary, be directed to pay the principal along withsuch interest as the Commission or the Tribunal deemed appropriate andin the interests of justice. Since none of these choices were opted for,and also having regard to the fact that the amount in question wasundoubtedly debited from the developer’s current account, there oughtto have been a discussion of what was the applicable legal provisionwhich fastened any liability upon the developer. This was more importantbecause the Tribunal in the present case has accepted Citibank’sexplanation regarding interest (or rather, its absence of liability, eventhough the amount was undoubtedly with the bank for about 11 years).

29. This court, in Gurpreet Singh (supra), observed in the contextof Order XXI of CPC[8] (which deals with modes of payment under 8ORDER XXI Execution of Decrees and Orders Payment under Decree

1. Modes of paying money under decree.— (1) All money, payable under a decree shallbe paid as follows, namely:—

(a) by deposit into the court whose duty it is to execute the decree, or sent to that Courtby postal money order or through a bank; or (b) out of Court, to the decree-holder by postal money order or through a bank or byany other mode wherein payment is evidenced in writing; or

(c) otherwise, as the Court which made the decree, directs.

(2) Where any payments is made under clause (a) or clause (c) of sub-rule (1), thejudgment-debtor shall give notice thereof to the decree-holder either through the Courtor directly to him by registered post, acknowledgment due.

(3) Where money is paid by postal money order or through a bank under clause (a) orclause (b) of sub-rule (1), the money order or payment through bank, as the case maybe, shall accurately state the following particulars, namely:—

(a) the number of the original suit;

(b) the names of the parties or where there are more than two plaintiffs or more than twodefendants, as the case may be, the names of the first two plaintiffs and the first twodefendants; A

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Adecrees and also stipulates when interest shall cease to “run” (i.e., notbe payable)) as follows:

“Thus, in cases of execution of money decrees or awarddecrees, or rather, decrees other than mortgage decrees,interest ceases to run on the amount deposited, to the extentBof the deposit. It is true that if the amount falls short, thedecree holder may be entitled to apply the rule ofappropriation by appropriating the amount first towards theinterest, then towards the costs and then towards the principalamount due under the decree. But the fact remains that to theextent of the deposit, no further interest is payable thereon toCthe decree holder and there is no question of the decree holderclaiming a re-appropriation when it is found that more amountsare due to him and the same is also deposited by the judgmentdebtor. In other words, the scheme does not contemplate areopening of the satisfaction to the extent it has occurred byDthe deposit. No further interest would run on the sumappropriated towards the principal.

As an illustration, we can take the following situation.Suppose, a decree is passed for a sum of Rs. 5,000/- by thetrial court along with interest and costs and the judgmentEdebtor deposits the same and gives notice to the decree holdereither by approaching the executing court under Order XXIRule 2 of the Code or by making the deposit in the executiontaken out by the decree-holder under Order XXI Rule 1 of theCode. The decree holder is not satisfied with the decree of F(c) how the money remitted is to be adjusted, that is to say, whether it is towards theprincipal, interest or costs; (d) the number of the execution case of the Court, where such case is pending; and(e) the name and address of the payer.(4) On any amount paid under clause (a) or clause (c) of sub-rule (1), interest, if any,shall cease to run from the date of service of the notice referred to in sub-rule (2).(5) On any amount paid under clause (b) of sub-rule (1), interest, if any, shall cease toGrun from the date of such payment:Provided that, where the decree-holder refuses to aceept the postal money order orpayment through a bank, interest shall cease to run from the date on which the moneywas tendered to him, or where he avoids acceptance of the postal money order orpayment through bank, interest shall cease to run from the date on which the moneywould have been tendered to him in the ordinary course of business of the postalauthorities or the bank, as the case may be.”H

the trial court. He goes up in appeal and the appellate courtenhances the decree amount to Rs. 10,000/- with interest andcosts. The rule in terms of Order XXI Rule 1, as it now stands,in the background of Order XXIV would clearly be, that thefurther obligation of the judgment debtor is only to depositthe additional amount of Rs. 5,000/- decreed by the appellatecourt with interest thereon from the date the interest is helddue and the costs of the appeal. The decree holder would notbe entitled to say that he can get further interest even on thesum of Rs. 5,000/- decreed by the trial court and depositedby the judgment debtor even before the enhancement of theamount by the appellate court or that he can re-open thetransaction and make a re-appropriation of interest first onRs. 10,000/-, costs and then the principal and claim intereston the whole of the balance sum again. Certainly, at bothstages, if there is short-fall in deposit, the decree holder maybe entitled to apply the deposit first towards interest, thentowards costs and the balance towards the principal. But thatis different from saying that in spite of his deposit of theamounts decreed by the trial court, the judgment debtor wouldstill be liable for interest on the whole of the principal amountin case the appellate court enhances the same and awardsinterest on the enhanced amount.”

30. The rule was explained in another decision of this court, in V.Kala Bharathi & Ors. vs The Oriental Insurance Company Ltd:[9]

“A bare perusal of the aforesaid provisions makes it amplyclear that the scope of Order XXI Rule 1 of the Code of CivilProcedure is that the judgment debtor is required to pay thedecretal amount in one of the modes specified in Sub-rule (1)thereof. Sub-rule (2) of Rule 1 provides that once payment ismade Under Sub-rule (1), it is the duty of the judgment debtorto give notice to the decree-holder through the Court ordirectly to him by registered post acknowledgement due. Sub-rule (3) of Rule 1 merely indicates that in case money is paidby postal money order or through a bank under Clause (a)

9V. Kala Bharathi & Ors. vs The Oriental Insurance Company Ltd., 2014 (5) SCC 577,dated 1[st] April 1947.

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SUPREME COURT REPORTS

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Aor Clause (b) of Sub-rule (1) thereof, certain particulars arerequired to be accurately incorporated while making suchpayment. Sub-rules (4) and (5) of Rule 1 states from whichdate, interest shall cease to run-in case amount is paid underClause (a) or (c) of Sub-rule (1), interest shall cease to runBfrom the date of service of notice as indicated Under Sub-rule (2); while in case of out of court payment to the decree-holder by way of any of the modes mentioned under Clause(b) of Sub-rule (1), interest shall cease to run from the date ofsuch payment.”

C31. The provisions of Order XXI are applicable to decrees of civilcourt. However, they embody a sound policy principle, that if the amountis deposited, or paid to the decree holder or person entitled to it, theperson entitled to the amount cannot later seek interest on it. This is arule of prudence, inasmuch as the debtor, or person required to pay orrefund the amount, is under an obligation to ensure that the amountDpayable is placed at the disposal of the person entitled to receive it.Once that is complete (in the form of payment, through different modes,including tendering a Banker’s Cheque, or Pay Order or Demand Draft,all of which require the account holder / debtor to pay the bank, whichwould then issue the instrument) the tender, or ‘payment’ is complete.

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32. In the present case, the complainant was aware that the PayOrder had been tendered by the developer to her; nevertheless she filedthe original Pay Order with her complaint, and did not seek any orderfrom the MRTP Commission at the relevant time. The pleadings in thecomplaint did not disclose that the Pay Order was filed in the Commission,Fto enable the developer to respond appropriately. In these circumstances,the developer’s argument that the rule embodied in Order XXI, Rule 4CPC, is applicable, is merited. The developer cannot be fastened withany legal liability to pay interest on the sum of ` 4,53,750/- after 30[th]April 2005.

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33. This court is also of the opinion that the complainant’s argumentthat on account of the omission of the developer, she was wronged, andwas thus entitled to receive interest, cannot prevail. The records nowheredisclose any fault on the part of the developer; on the other hand, thecomplainant did not take steps to protect her interests. It has been held H

K. L. SUNEJA & ANR. v. DR. (MRS.) MANJEET KAURMONGA (D) THROUGH HER LR [S. RAVINDRA BHAT, J.]

by this court, in Sailen Krishna Majumdar v Malik Labhu Masih[10]that in such cases, even if equities are equal, the court should notintervene:

“Equity is being claimed by both the parties. Under thecircumstances we have no other alternative but to let the losslie where it falls. As the maxim is, ‘in aequali jure melior estconditio possidentis’. Where the equities are equal, the lawshould prevail. The respondent’s right to purchase must,therefore, prevail.”

In the present case too, the complainant cannot claim interestfrom the developer, who had returned the Pay Order. As discussed, atthe time of filing of the complaint, she could have chosen one among thevarious options to ensure that the amount presented to her was kept inan interest-bearing account, without prejudice to her rights to claim interestlater. In these circumstances, no equities can be extended to her aid.

34. As regards the complainant’s appeal, the contention is thatthe impugned order is in error, because the Tribunal ought to have directedthat the developer ought to have been directed to pay interest on thesum of ` 4,53,750/- from 4[th] October 1993 till the date of its realizationi.e., 7[th] May 2016. This plea is plainly untenable, because the interestpayable for the past period was concluded in the previous proceedings.The complainant did not point to any rule or binding legal principle whichobliged the developer to pay such interest, or justify the direction in theimpugned order, by showing how such liability arose in the facts andcircumstances of this case.

35. Before parting with this case, this court is of the opinion thatall courts and judicial forums should frame guidelines in cases whereamounts are deposited with the office / registry of the court / tribunal,that such amounts should mandatorily be deposited in a bank or somefinancial institution, to ensure that no loss is caused in the future. Suchguidelines should also cover situations where the concerned litigant merelyfiles the instrument (Pay Order, Demand Draft, Banker’s Cheque, etc.)without seeking any order, so as to avoid situations like the presentcase. These guidelines should be embodied in the form of appropriate 10Sailen Krishna Majumdar vs. Malik Labhu Masih, 1989 (1) SCR 817, dated 21stFebruary 1989.

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Arules, or regulations of each court, tribunal, commission, authority, agency,etc. exercising adjudicatory power.

36. In view of the above discussion, the developer’s appeal, i.e.,C.A. No. 1401 of 2019 is allowed. The impugned order is hereby setaside. The complainant’s appeal, i.e., C.A. No. 4530 of 2019, is dismissed.BThere shall be no order on costs.

Ankit Gyan(Assisted by : Shloka Sah, LCRA)

Appeals disposed of.

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