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SUPREME COURT OF INDIA
N.V. Ramana, S. Abdul Nazeer, JJ.
M/s. Fortune Infrastructure (Now Known As M/s. Hicon Infrastructure) & Anr. - Appellant
Versus
Trevor D’lima & Ors. - Respondents
Civil Appeal Nos. 3533-3534 of 2017
Decided On : 12-03-2018
[1979] 1 AllER 883 – Referred
(b) Consumer Protection Act, 1986 – Section 2(1)(g) and 21 – Deficiency in service –Appellants having obligation to show their inability to transfer the property to the respondent – Instead appellants transferring property to third party without any explanation – Held, there was deficiency of service on part of appellants. (Para 14, 15)
(c) Commercial contracts – Damages – Under Consumer Protection Act, 1986 – Need to be determined as per Indian Contract Act – In common law damages is the rule and specific performance is an exception – Latter being prime remedy for breach of contract – Buyer entitled to compensation – Damages become due on the date when the breach of contract takes place – damages and compensation determined. (Para 16, 17, 19, 21, 27)
(2004) 5 SCC 65 – Relied upon
Facts of the case:
The appellants, in the year 2011, launched a residential housing project by name ‘Hicons Onyx’, renamed as Fortune Residency, which was a re-development of Mohammadi House. The respondents booked a flat bearing no. 202, 2nd Floor in ‘A’ wing, admeasuring 828.40 Sq. Ft. with one unit of parking-space. The total consideration for the flat was Rs. 1,93,00,000/-. It is alleged by the appellants, that due to increase in the cost beyond what was expected, they transferred the project to another company being M/s. Zoy Shelcon Pvt. Ltd. It is to be noted that the respondents have paid a sale consideration of Rs. 1,87,00,000/-.
In 2015, aggrieved by the fact that appellants were not willing to deliver the flat to them, the respondents approached NCDRC through a consumer complaint
The NCDRC has allowed the complaint.
Finding of the Court:
There has been deficiency in service by appellants. Respondent is entitled to compensation.
Result: Appeals allowed.
Key Points: - (!) The NCDRC held there was deficiency in service for transferring the project to a third party instead of delivering to the complainants. - (!) Appellants failed to justify the transfer of property to a third party despite contractual obligation to the respondents. - (!) There is deficiency of service; questions of quantum of compensation to be determined. - (!) Damages under the Consumer Protection Act for commercial contracts must be determined as per Indian Contract Act. - (!) General principle: compensatory damages to place the injured party in the position as if contract had been performed. - (!) Compensation can vary based on loss/injury; no uniform 18% rule; factors include possession delay, harassment, and price escalation. - (!) Distinction between possession-and-refund cases; compensation may reflect loss and possible value increase; not uniform. - (!) Appellate court fixes market rate Rs. 50,000 per sq ft to determine market value; calculated damages accordingly. - (!) Appellants to refund Rs. 1,87,00,000 and pay Rs. 2,27,20,000 as compensation plus Rs. 20,00,000 for parking and Rs. 10,000 costs; payment within six weeks with 9% interest if default. - (!) Review/notice deposit adjustments: Rs. 2,50,00,000 deposited earlier to be adjusted against liability.
JUDGMENT :
N.V. Ramana, J.
These appeals are filed against the impugned orders, dated 08.09.2016 and 03.11.2016, passed by the National Consumer Disputes Redressal Commission [hereinafter ‘NCDRC’ for brevity], in Consumer Complaint No. 636 of 2015 and Review Application No. 273 of 2016 in the Consumer Complaint No. 636 of 2015.
2. A few facts which are necessary for the disposal of this matter are that the appellants, in the year 2011, launched a residential housing project by name ‘Hicons Onyx’, renamed as Fortune Residency, which was a re-development of Mohammadi House. The respondents booked a flat bearing no. 202, 2nd Floor in ‘A’ wing, admeasuring 828.40 Sq. Ft. with one unit of parking-space. The total consideration for the flat was Rs. 1,93,00,000/-. It is alleged by the appellants, that due to increase in the cost beyond what was expected, they transferred the project to another company being M/s. Zoy Shelcon Pvt. Ltd. It is to be noted that the respondents have paid a sale consideration of Rs. 1,87,00,000/-.
3. In 2015, aggrieved by the fact that appellants were not willing to deliver the flat to them, the respondents approached NCDRC through a consumer complaint, being CC No. 636 of 2015, with following prayers
a. To hold and declare the Opposite Parties to be guilty of deficiency in service and unfair trade practices as per the provisions of the Consumer Protection Act, 1986
b. To direct the Opposite Parties 1 to 4 to comply with their statutory obligations and to execute and register the Agreement for Sale with the complainants in respect of flat No. 202 on the 2nd floor admeasuring 828.40 Sq. Ft. with one car parking in the building known as Hicon Onyx and since re-named as Fortune residency situated at plot no. F/1116-A, Village Bandra, St. Martins Road Bandra (West), Mumbai 400 050 (Maharashtra).
c. To direct the Opposite Parties no. 1 to 4 to complete the construction of the building known as ‘Hicons Onyx’ since renamed as ‘Fortune residency’ and to hand over to the complainants vacant and peaceful possession of the Flat No. 202 on the 2nd floor admeasuring 828.40 Sq. Ft. with one car parking in the building known as Hicons Onyx and since renamed as Fortune residency situated at plot no. F/1116-A, Village Bandra, St. Martins road Bandra (West), Mumbai 400 050 (Maharashtra) on receiving the balance consideration amount of Rs. 6,00,000/-from the complainants
Alternatively
In the event of the Opposite Parties no. 1 to 4 having created third party interests in favour of the Opposite Party no. 5, to direct the Opposite parties no. 1 to 4 to hand over to the complainants any other flat of the same size quality and specifications with one car parking in the same building ‘Hicons Onyx’ since re-named as ‘Fortune Residency’ or any flat of the same size, quality and specifications with one car parking in the same locality of the present building Hicons Onyx or Fortune Residency.
x x x x x
x x x x x
f. To direct the Opposite Parties No. 1 to 4 jointly and severally pay to the complainants Rs. 5,00,000/- (Rupees Five lakhs only) towards compensation for the inconvenience and mental agony suffered by the complainants due to the enormous delay in construction of the building, negligence and deficiency in service of the Opposite Parties No. 1 to 4.
g. To direct the opposite Parties No. 1 to 4 jointly and severally to pay to the complainants the sum of Rs. 1,00,000/- (Rupees One Lakh only) being the Legal and other incidental expenses incurred by the complainants.
h. For such other and further relief as this Hon’ble Commission may deem fit and proper in the nature and circumstances of the above numbered complaint.
4. The NCDRC has allowed the complaint and directed the appellants:
1. To refund the amount of Rs. 1,87,00,000/- which they have received from the complainants, within six weeks from the day of the impugned judgment;
2. The appellants were further directed to pay a sum of Rs. 3,65,46,000/- as compensation and Rs. 10,000/- as cost of
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