Compound Interest

A wide variety of rival submissions have been presented before us on whether Consumer Fora had been justified in awarding and approving ‘compound interest’. An attempt to seek ‘compound interest’ in such real estate dealings did not meet with approval of this Court and in Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna, (2021) 3 SCC 241 such a claim was declined by a 3-Judge Bench for having no nexus with commercial realities. A shortcut of awarding ‘compound interest’ is neither envisaged nor do we find any such term of contract.     

In our view, awarding of ‘compound interest’, with reference to Dr. Manjeet Kaur Monga v. K.L. Suneja, (2018) 14 SCC 679 and without examining any other factor, has led to serious inconsistencies and it could only lead to ‘unjust enrichment’.

Hon’ble Justice Dinesh Maheshwari, M/s. Suneja Towers Private Limited v. Anita Merchant, [Civil Appeal No. 2892-2894 of 2023].