Compensation for mental agony too

In a recent case, the A.P. State Consumer Redressal Commission increased the compensation amount to offset at least a reasonable portion of loss incurred by a customer.

M. Srinivasa Raju, a resident of Saroornagar, purchased a plot from Sreemitra Real Estates Pvt. Ltd. in August 2002. He made the initial payment of Rs.49,625, but however, stopped the further payments as the developer refused to allocate him the plot. His repeated requests were ignored.

Mr. Raju filed a case against the developer in Ranga Reddy District Consumer Forum seeking repayment of his money together with Rs.50,000 towards interest, Rs. 1 lakh as compensation and Rs.50,000 for mental agony.

The District Forum ordered the builder to refund the paid money Rs.49,625 along with interest of 9 per cent per annum from July 2004 till the date of realization and compensation of Rs.2,000 and Rs.500 for court costs.
Better compensation

Upset with the amount of recompense, Mr. Srinivasa Raju challenged the verdict in the State Commission. He argued that if he was refunded the money when he had asked, he could have purchased another plot in city and would have earned a good market value for it.

He further said he would get only a meagre compensation with the interest rate granted by District Forum and pleaded for better compensation.

The State Commission found force in the contention of the customer.

It observed that if customer was refunded his money in 2003 itself, he could have bought another plot and benefited from the increased land rates.

The State Commission modified the order of the District Forum keeping and asked the builder to repay Rs.49,625 with interest rate of 15 per cent per annum from August 2004 to the date of realisation.

It increased the compensation and legal expenditure amounts from Rs.2,000 and Rs.500 to Rs.25,000 and Rs.1,000 respectively.
Cases cited

The Commission cited three cases - Lucknow Development Authority v. M.K. Gupta, Haryana Development Authority v. Suman Bansal, and Haryana Development Authority vs. S. P.Gupta, which were tried by the Supreme Court.

In the verdicts of these cases, the apex court stated that consumer fora should specify the amount under each head while awarding the compensation and due compensation should be awarded for mental agony and harassment. The time given for compliance was one month.