Builder Liable to Pay Entire Amount, if Failure to Deliver Flat Possession in Time : NCDRC

Builder Liable to Pay Entire Amount on Failure to Deliver Possession

The NCDRC has directed that Builder Liable to Pay Entire Amount on Failure to Deliver Possession of Flats Units in Time. Supreme Court also rendered number of judgments on the similar matters which are being followed by State as National Consumer Forum.

(Against the Order dated 07/07/2017 in Complaint No. 249/2017 of the State Commission Delhi)




For the Appellant :  
Mr. Prabhakar Tiwari, Advocate
For the Respondent :

Dated : 09 Jan 2018


1.       Challenge in this First Appeal, by the Opposite Parties in the Complaint, is to the order dated 07.07.2017, passed by the State Consumer Disputes Redressal Commission, Delhi at New Delhi (for short “the State Commission”) in Complaint Case No. 249 of 2011.  By the impugned order, while accepting the Complaint, preferred by the Respondent/Complainant, alleging deficiency in service on the part of the Opposite Parties, the Appellants herein, in not completing the construction and handing over possession of the residential flat booked by him, the State Commission has directed the Appellants to refund to the Complainant an amount of ₹46,28,933/-, along with interest @ 12% p.a. from the date of deposit till the date of realization, and pay ₹3,00,000/- as compensation for harassment, inconvenience, and mental agony caused to the Complainant, and ₹25,000/- as litigation charges.  The said amounts were directed to be paid to the Complainant within 60 days, failing which the said amounts were to carry interest @ 18% p.a. after the expiry of the said period. 

2.       It is pointed out by the office that the Appeal is barred by limitation, inasmuch as there is a delay of 134 days in filing the same.  For condonation thereof, an Application has been filed along with the Appeal.  In paragraphs 4 – 7 of the same, the Appellants have furnished the following explanation:

4.  The Appellant received the certified copy of Impugned Order on  10.07.2017.

5.       The Appellant No.1 upon receipt of Impugned Order, in order to discuss the case internally forwarded the copy of order to its advocate in the fourth week of July, 2017 for seeking an opinion for filing an Appeal.

6.       That the Appellant’s Counsel at the Hon’ble National Commission asked for complete sets of documents related to the matter from the legal cell of the Appellant Company, which could not be traced in the record room of the Appellant No.1 due to shifting of the record room.  As such the document could only be made available to the counsel in the second week of September, 2017.

7.       Thereafter, the counsel for the Appellant No.1 drafted the appeal and circulated the same in the second week of October, 2017 and same was approved by the legal cell of the Appellant Company only in the third week of (sic) 2017.  The signed copy of Appeal and Application were received by the Appellant’s Counsel only in the third week of December, 2017.  Thereafter, the captioned Appeal is being filed with a delay of 130 days.

3.       Though the Appellants had admittedly received the certified copy of the impugned order on 10.07.2017, they took a fortnight in forwarding the same to their Counsel, in the fourth week of July, 2017.  Thereafter, the Appellants took one and a half months in furnishing the necessary documents, sought for by their Counsel.  This delay is sought to be explained on the ground that due to shifting of their record room, the documents were not traceable.  In the absence of any supporting material, the said bald plea does not inspire any confidence.  Though at that stage, the limitation period provided under the Consumer Protection Act, 1986 for filing an Appeal in the matter was already over, yet Appellants’ Counsel took almost one month in preparing the draft Appeal and sending the same to the Appellants in the second week of October, 2017.  Even at that stage the Appellants did not show any urgency in the matter and took two months in returning the Appeal to be filed before this Commission to the Counsel.  The Counsel ultimately filed the Appeal before this Commission only on 21.12.2017, with the afore-stated delay. 

4.       The Hon’ble Supreme Court in  Anshul Aggarwal vs. New Okhla Industrial Development Authority [(2011) 14 SCC 578] has observed that while deciding an application for condonation of delay, the Court has to keep in mind that the special period of limitation has been prescribed under the Act for filing appeals and revisions in consumer matters and the object of expeditious adjudication of the consumer disputes will get defeated if highly belated petitions filed against the orders of the Consumer Foras are entertained. 

5.       It is trite that the provision regarding the period of limitation has to be construed strictly.  I have no hesitation in holding that the Appellants have failed to make out any cause, much less a “sufficient cause” for condonation of the afore-stated inordinate delay in filing the present Appeal and, accordingly, I decline to condone the said delay.    

6.       Even on merits, the only contention of the Learned Counsel for the Appellants is that the project was delayed for reasons beyond their control; they have always assured the Complainant that he would be compensated at the time of delivery of possession in accordance with Clause 10(c) of the Flat Buyer’s Agreement; and the State Commission has illegally awarded both compensation and interest.

7.       It is seen from the record that the Complainant had raised a loan from M/s Reliance Capital to the tune of Rs. 29,95,000/- and paid a total amount of Rs. 46,28,933/- for a residential flat, ad measuring 1920 sq. ft.  A tripartite agreement was entered into between the Complainant, the Appellants and M/s Reliance Capital.  It is not in dispute that the last payment was made on 11.05.2008 and the Complainant had discharged the entire loan and obtained a “No Dues Certificate” from M/s Reliance Capital way back on 05.02.2010.  It is also an admitted fact that the subject flat was never constructed and the only defence taken by the Opposite Parties in their Written Version was that the construction activity had slowed down due to global recession and force majeure conditions.  The State Commission has observed that the Opposite Parties had failed to place on record any material in support of their contention that force majeure conditions existed.     

8.       In a catena of orders, including in Emaar MGF Land Ltd. & Anr. v. Amit Puri, II (2015) CPJ 568 (NC) and Parsvnath Exotica Resident’s Association v. Parsvnath Developers Ltd. And Ors. (CC No. 45 of 2015), this Commission has held that the allottees cannot be made to wait indefinitely for the possession of flats booked by them and they are entitled to seek refund of the entire amount paid along with reasonable compensation and costs.  It is pertinent to note that on a letter written by the Complainant on 30.04.2008, seeking to know the expected date of handing over of delivery of possession, he was informed by the Appellants that he would be handed over possession in January, 2010.  After the Complainant saw that there was no construction activity at the site, he got issued a legal notice on 28.05.2011, calling upon the Appellants herein to refund the amount paid with interest, compensation and costs.  Thereafter, he received a letter dated 20.06.2011 from the Second Appellant, claiming to be a joint venture company, that a separate/new account was created for the project.  There is a specific pleading in the Complaint that the Complainant had lost faith in the said project and sought for refund of the amount deposited by him with the Appellants herein but received no response and, therefore, the contention of the Learned Counsel for the Appellants that they had always assured the Complainant that they would pay penalty as per Clause 10(c) of the Flat Buyer’s Agreement till the date of delivery of possession is unsustainable as till date there was no specific date mentioned for delivering the flat and also the force majeure conditions were not proved by way of any documentary evidence. It is significant to note that the Complainant had taken a loan and was paying interest along with other incidental charges on the said loan for a flat, which was never constructed, and he ultimately had to discharge the entire loan with the relevant interest rates.  Undisputedly, the Appellants have failed to deliver possession of the subject flat even after the expiry of the promised date, which act amounts to deficiency in service, and I do not see any illegality or infirmity in the impugned order of the State Commission in directing refund of the amount with interest @ 12% p.a. with reasonable compensation and costs.

9.       Therefore, the Appeal stands dismissed on both delay and merits. No costs.    

10.     The statutory deposit made at the time of filing of the Appeal shall stand transferred to the Consumer Welfare Fund by way of a Bank Draft drawn in favour of PAO, Ministry of Consumer Affairs, New Delhi.  


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