Facts

Pioneer Urban Land and Infrastructure Ltd (builder & Appellant) entered into a contract with a purchaser to deliver the possession of the flat in Arya Complex, Gurugram along with the occupation certificate within 39 months from the date    of excavation, with a grace period of 180 days. The Builder however failed to apply for the Occupancy Certificate as per the stipulations in the Agreement. The Purchaser filed a Consumer Complaint before the National Commission (NCRDC) alleging deficiency in service on the part of the Builder for failure to obtain the Occupancy Certificate, and hand over possession of the flat. On account of the inordinate delay, the Respondent-Flat Purchaser had no option but to arrange for alternate accommodation in Gurugram.

The NCRDC allowed the Consumer Complaint filed by the Respondent-Flat Purchaser, and held that since the last date stipulated forconstruction had expired about 3 years before the Occupancy Certificate was obtained, the Respondent-  Flat Purchaser could not be compelled to take possession at such a belated stage. The clauses in the Agreement were held to be wholly one-sided, unfair, and not binding on the Respondent-Flat Purchaser. The  Appellant-Builder was  directed to refund Rs. 4,48,43,026/- i.e. the amount deposited by the Respondent-Flat Purchaser, along with Interest @10.7% S.I. p.a. towards compensation. The rate    of Interest @10.7% S.I. p.a. was fixed in accordance with Rule 15 of the Haryana Real Estate (Regulation and Development) Rules, 2017. Against the order of NCDRC, the Appellant builder filed the Statutory Appeal to the Supreme Court.

Issue

Whether Purchaser can claim compensation where he has not terminated the Agreement as per the terms and conditions of the Contract? Whether the purchaser can claim compensation for delayed possession over and above which   is agreed to in the Agreement?

View

The flat purchasers invest their hard earned money. When the Developer  delays the possession, the flat purchasers have to service their loans. The Agreements    are one–sided favouring the Developers. Hence, the interpretations of these Agreements have to favour the Purchasers in consonance with the spirit of the Consumer Protection Laws.

Held

It was observed that admittedly the Builder obtained the Occupancy Certificate almost 2 years after the date stipulated in the Apartment Buyer’s Agreement.  The Purchaser has made out a clear case of deficiency of service on the part of     the Appellant-Builder. The Purchaser was justified in terminating the Apartment Buyer’s Agreement by filing the Consumer Complaint, and cannot be compelled    to accept the possession whenever it is offered by the Builder.  The Purchaser  was legally entitled to seek refund of the money deposited by him along with appropriate compensation.

It was held that Builder failed to fulfill his  contractual obligation of  obtaining  the Occupancy Certificate and offering possession of the flat to the Respondent- Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Purchaser could not be compelled to take possession of the  flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Purchaser had to service a loan that    he had obtained for purchasing the flat, by paying Interest @10% to the Bank.       In the meanwhile, the Purchaser also located an alternate property in Gurugram.

In these circumstances, the Respondent-Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest. (CA Nos. 12238 and 1677 of 2019 dt. 2-4-2019)

Editorial: In Arifur Rahman Khan and Ors. v. DLF Southern Homes Pvt. Ltd.  and Ors. Civil Appeal Nos. 6239 and 6303 of 2019 Decided On: 24.08.2020 (SC) it is held that Consumer court can grant compensation over and above which is agreed in the Agreement. A claim for compensation for delayed handing over of possession can be pursued even if the purchaser has obtained Deed of Conveyance. If purchasers enter into specific settlement deeds with the developers then they cannot claim compensation. If flats are transferred by the purchasers before possession then the transferee cannot claim compensation. The court noted that the agreements by the builders are one sided and its interpretation should favour the cause of the consumer keeping the spirit of theconsumer protectionin mind. It also held that the failure to terminate the agreement by the purchaser was not detrimental to the claim of the purchaser for compensation.

“Hatred ever kills, love never dies such is the vast difference between the two. What is obtained by love is retained for all time. What is obtained by hatred proves aburden in reality, for it

increases hatred.”

– Mahatma Gandhi