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2019 Supreme(SC) 1408
SUPREME COURT OF INDIA
Dhananjaya Y. Chandrachud, Hrishikesh Roy, JJ.
M/s Lanco Hills Technology Park Pvt Ltd – Appellant(s)
Versus
Manisha Balkrishna Kulkarni & Anr – Respondent(s)
Civil Appeal No 155 of 2015
Decided On : 17-12-2019
For the Appellant(s) :Deepak Khurana, Tejasv Anand, Umesh Kumar Khaitan, Advocates
For the Respondent(s):D. Bharathi Reddy, D. Tejaswi Reddy, Advocates
IMPORTANT POINT
Direction to pay interest at the rate of 18% per annum is excessive and accordingly has to be scaled down.
Headnote:
Consumer Protection Act, 1986 – Section 12 – Agreement to sell – Possession of Apartment not handed over despite execution of sale-deed – During pendency of proceedings, possession of apartment was handed over to respondents – NCDRC directed appellant to pay compensation at the rate of Rs 5 per sq. ft. for delay of six months, at agreed contractual rate – There is direction to pay compensation at the rate of 18% per annum for delay beyond six months for which no specific provision was contained in agreement between parties – Respondents had paid 85% of agreed consideration, together with agreement to sell, and even balance at the time when sale deed was executed on 11 February 2013 – Having paid consideration, it was evidently not in their interest to delay receipt of possession – Direction to pay interest at the rate of 18% per annum is excessive and accordingly has to be scaled down – Adopting a rate of 6% as a broad guideline, compensation computed at a lump sum of Rs 10 lakhs to obviate any dispute on computation – Appeal partly allowed with directions. (Paras 6, 7, 11, 13 and 14)
Facts of the case:
Dispute between parties relates to the claim of respondents that despite execution of sale deed, possession was not handed over. The respondents moved a consumer complaint before NCDRC seeking a direction for the handing over of physical possession, together with interest and damages for delayed delivery. Present appeal arises from a judgment of the National Consumer Disputes Redressal Commission1 dated 9 October 2014 in Consumer Complaint No 112 of 2014.
Findings of Court:
Though the sale deed records that possession was handed over, it is clear from the contemporaneous record that it was only on 28 August 2014 that all the sets of keys of the apartment were handed over to the respondents. Consequently, appellant would be liable to pay reasonable compensation to the respondents for the period between 9 February 2013 and 28 August 2014, in addition to contractual payment due for period between 8 August 2012 and 8 February 2013.
Result : Appeal Partly allowed.
JUDGMENT
Dr. Dhananjaya Y. Chandrachud, J.
1. Admit.
2. This appeal arises from a judgment of the National Consumer Disputes Redressal Commission [NCDRC] dated 9 October 2014 in Consumer Complaint No 112 of 2014.
3. An agreement to sell was executed between the appellant and the respondents on 21 March 2011 under which the respondents agreed to purchase an apartment in a complex which was developed by the appellant in Hyderabad. The total consideration was Rs 1,55,50,826. Subsequently, an amount of Rs 6,00,000 was paid towards an additional parking space. Under Clause 5.1(iii) of the agreement, possession of the apartment was to be handed over to the respondents by 28 March 2011, with a grace period of three months. Clause 8 of the agreement contemplated that the period of possession would be extended during the operation of a force majeure event. The appellant received a no-objection certificate from the State Disaster Response and Fire Services Department on 4 July 2011. The final occupancy certificate for the residential tower in which the apartment was situated was issued by the Andhra Pradesh Industrial Infrastructure Corporation Limited on 22 August 2011.
4. Though the agreement contemplated that possession would be handed over on 28 March 2011 with a grace period of three months, it appears that on 28 March 2011 a restraining order was issued by the State Waqf Tribunal as a result of a dispute in relation to a part of the land on which the project was being developed. The order of the Waqf Tribunal was upheld by the High Court on 3 April 2012. However, on 8 May 2012, the order of injunction was vacated by this Court. On 15 October 2012, the appellant informed the respondents that the apartment would be ready for occupation on 3 November 2012 and followed this up with communications dated 5 November 2012, 20 December 2012 and 7 February 2013. By the communication dated 20 December 2012, the appellant recorded that all the deficiencies which had been noticed by the respondents had been cleared. Eventually, a sale deed was executed on 11 February 2013 and the sale transaction was completed and registered. The total consideration inclusive of the cost of the parking space was Rs 1,61,50,826. The respondents had paid 85% of the total agreed consideration under the agreement to sell while the balance was paid, together with the execution of the sale deed.
5. The dispute between the parties relates to the claim of the respondents that despite the execution of the sale deed, possession was not handed over. The respondents moved a consumer complaint before the NCDRC seeking a direction for the handing over of physical possession, together with interest and damages for delayed delivery.
6. During the pendency of the proceedings, possession of the apartment was handed over to the respondents on 28 August 2014. A document which is styled as “the Keys Hand Over Form” records that all three sets of keys were handed over to the representative of the respondents.
7. The NCDRC disposed of the consumer complaint by its judgment and order dated 8 October 2014. The NCDRC directed the appellant to pay compensation at the rate of Rs 5 per sq ft for the delay of six months, at the agreed contractual rate. There is a direction to pay compensation at the rate of 18% per annum for the delay beyond six months for which no specific provision was contained in the agreement between the parties.
8. Learned counsel appearing on behalf of the appellant placed reliance on the provisions contained in the sale deed which was executed on 11 February 2013. Clause 3 of the sale deed contains a stipulation of possession being handed over in the following terms:
“3. Possession
Simultaneously, upon the execution of this Sale Deed and the full receipt of the total consideration, the Vendor has and the Purchasers acknowledge that the Vendor has handed over the physical, vacant, lawful and peaceful possession of the Scheduled Property.”
Hence, it has been submitted that up
