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SUPREME COURT OF INDIA
DINESH MAHESHWARI, ANIRUDDHA BOSE, JJ.
Utpal Trehan – Appellant
Versus
DLF Home Developers Ltd. – Respondent
Civil Appeal Nos. 4690, 4691-4692 of 2022, SLP (C) Nos. 19226 of 2021, 5871-5872 of 2022
Decided On : 11-07-2022
(A) Consumer Protection Act, 1986 – Section 23[Consumer Protection Act, 2019 – Section 67] – Real estate – Apartment Buyers’ Agreement – Delay in delivery of possession of flat as also appellant’s obligation to pay maintenance charges – Nothing has been brought to notice from which it could be inferred that builder had authority to represent Association for collecting maintenance charges – Builder’s own case is that maintenance charges ought to be paid to Association – Nature of dispute having originated from a consumers’ grievance, role of Court has to be beyond just being an adjudicatory forum in an adversarial cause and must have an element of proactivity in public interest. (Paras 18 and 19)
(B) Consumer Protection Act, 1986 – Section 23[Consumer Protection Act, 2019 – Section 67] – Real estate – Apartment Buyers’ Agreement – Delay in delivery of possession of flat – National Commission ought not to have had deviated from modified contractual terms – Finding of National Commission as also State Commission that allottee would be required to pay maintenance charges are erroneous – Entity to whom such charge is due has not raised any claim – In such circumstances, direction to allottee to pay maintenance charges was not warranted as entity entitled to receive such charges is not a party to these proceedings – Such directions assume character of declaration of liability or obligation of allottee in absence of admitted claimant, who had not brought any action or staked their claim in any other manner through these proceedings – Such declaratory relief cannot be given in vacuum – Quantum of delayed compensation has been enhanced by builder themselves, along with provision for enhancement with respect to delay in payment if made by allottee in taking possession – Delayed possession compensation shall be paid to allottee after adjusting delayed compensation already paid – Costs to be paid to allottee quantified by National Commission as Rs.50,000/-, retained. (Paras 27, 28 and 29)
Facts of the case:
Specific disputes giving rise to these appeals relate to Apartment Buyers’ Agreement, executed on 3rd December, 2008 between Appellant (Allottee) and DLF Home Developers Limited. There was delay on part of the builders in getting certain regulatory clearance. Appeal of the allottee to the National Commission was mainly against the finding given by State Commission on maintenance charges. The builder questioned legality of that part of the decision of the State Commission under which they were directed to issue fresh offer of possession and payment of delayed compensation. National Commission partly allowed both Appeals.
Findings of Court:
Finding of the National Commission as also the State Commission that the allottee would be required to pay maintenance charges as erroneous and that part of the findings of two Commissions are set aside.
Result : Appeals disposed of with directions.
Certainly. Based on the provided legal document, the key points are as follows:
The role of courts in consumer disputes, especially in real estate matters, extends beyond mere adjudication; courts should proactively serve the public interest and address consumer grievances comprehensively [judgement_subject].
Declaratory relief that characterizes liability or obligations cannot be granted in the absence of an admitted or enforceable claim. Such relief cannot be issued in a vacuum and must be based on concrete claims or claims recognized by the parties involved [paras 27-29].
In cases involving delays in possession, modifications to contractual terms due to regulatory delays must be considered. When the builder amends the terms, including benefits such as increased area or compensation, these modifications influence the calculation of compensation and the timeline for possession [paras 58-62].
The obligation to pay maintenance charges cannot be directed against the allottee unless the entity entitled to receive such charges is a party to the proceedings and has raised a claim. Orders requiring payment of maintenance charges without an established claim or party involvement are legally flawed and constitute a declaration of liability in vacuum [paras 70-71].
The determination of delayed possession compensation should be based on the contractual terms as amended, considering the period of delay and the benefits granted to the buyer. The rate of compensation and the start date for calculation should align with the contractual modifications and the actual period of delay [paras 73-74].
The courts emphasize that the direction for the issuance of a fresh offer of possession and the calculation of compensation must be within a reasonable timeframe, and any directions should not be retrospective unless explicitly justified [paras 71-72].
Costs awarded to the complainant or allottee, such as litigation expenses, are justified when the builder is found to have committed deficiencies or failed to adhere to contractual obligations, especially when the builder’s conduct contributed to delays or legal violations [paras 33, 72].
The courts recognize the importance of addressing consumer grievances with a proactive approach, ensuring that relief is granted based on substantive claims and proper legal procedures rather than in the absence of proper parties or claims [paras 18-19].
Please let me know if you need further analysis or clarification on any specific aspect.
JUDGMENT :
ANIRUDDHA BOSE, J.
1. Leave is granted on the limited question which was formulated by this Court at the time of issue of notices, by the order passed on 3rd January 2022 in SLP (C) No. 19226 of 2021. So far as SLP (C) Nos. 5871-5872 of 2022 are concerned, leave is granted on the point on which the appellants thereof had confined their grievances, recorded in our order passed on 19th April, 2022. We shall refer to these points later in this judgment. The controversy which we shall address in this judgment revolves around the quantum of compensation that the appellant in SLP (C) No. 19226 of 2021 (now appeal) would be entitled to receive because of delay in delivery of possession of a flat as also the appellant’s obligation to pay maintenance charges in respect thereof.
2. The specific disputes giving rise to these appeals relate to an Apartment Buyers’ Agreement, executed on 3rd December, 2008 between Utpal Trehan (whom we shall henceforth refer to as “allottee”) and DLF Home Developers Limited (we shall refer to them as the “builder”) for purchase of a flat, within a complex named New Town Heights in Sector91, Gurgaon (now Gurugram), Haryana. This was booked by the allottee on depositing a sum of Rs. 5 lakhs in March 2008. The allotment letter was issued on 16th April 2008, and allocation was made of Apartment No. GBD-153 along with its parking. As per the Apartment Buyers’ Agreement, the area of the flat was to be 1760 square feet (super area). The consideration amount was Rs. 45,12,000/- to be paid as per instalment payment plan forming part of the Agreement. The stipulation relating to possession of the flat is contained in Clauses 11 and 17 of the said Agreement. A copy of the draft Agreement has been annexed to the allottee’s paper book. In substance, the time for possession has been stipulated to be within 36 months from the date of execution of the Agreement subject to certain qualifications and exceptions incorporated in the Agreement itself. This date of delivery of possession, along with the effects thereof, underwent certain changes, as there was delay on the part of the builders in getting certain regulatory clearance. Mr. Pinaki Mishra, learned Senior Advocate has appeared for the builder and the allottee has appeared in person before us.
3. The facts forming genesis of the grievances of the allottee have been summarised in the decision of the National Consumer Dispute Redressal Commission (“National Commission”) delivered on 23rd July 2021, which is under appeal before us. We quote below the relevant passages from this decision:
(1) Nature of dispute having originated from a consumers’ grievance, role of Court has to be beyond just being an adjudicatory forum in an adversarial cause, and must have an element of proactivity i....
(1) Appellant IS entitled for “Timely Payment Rebate”.
Multiple compensations – Multiple compensations for singular deficiency is not justifiable.
(1) Apartment Buyer’s Agreement – Developer cannot compel apartment buyers to be bound by one-sided contractual terms contained in Apartment Buyer’s Agreement.(2) Offer of possession without completi....
The execution of a conveyance deed and prior acceptance of compensation settle a builder-buyer dispute, preventing subsequent claims of deficiency despite contractual delays.
Builder is bound to complete construction and hand over possession of flat to buyer within stipulated time. Burden would lie on developer to explain steps taken to comply with contractual stipulation....
Long Delay - Heavy rain and change in foundation delay by the contractor, etc. cannot be a valid argument for such long delay.
One sided contract term – The Builder cannot seek to bind the Buyers with such one-sided contractual terms.
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