1. Dispute over non-completion of construction and non-payment of balance sale consideration under an agreement for sale — Complaint under Consumer Protection Act. (Para 3 , 4 , 5 , 6 , 7 , 8 , 9 )
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2022 Supreme(SC) 684
SUPREME COURT OF INDIA
D.Y. CHANDRACHUD, J.B. PARDIWALA, JJ.
M/s Siddhyvinayak Infrastructure – Appellant
Versus
Kamalakar Jayant Srivastava and Another – Respondents
Civil Appeal No. 5208 of 2022, S.L.P. (C) No. 11938 of 2021
Decided On : 12-08-2022
Advocates appeared:
For the Appellant(s) :Vinay Navare, Gwen Karthika, Satyajeet Kumar, Advocates
For the Appellant(s) :Vinay Navare, Gwen Karthika, Satyajeet Kumar, Advocates
IMPORTANT POINT
Bungalow Buyer’s Agreement – Direction for refund can be passed where agreement between parties has become difficult to be honoured.
Headnote:
Consumer Protection Act, 1986 – Section 23[Consumer Protection Act, 2019 – Section 67] – Real estate – Bungalow Buyer’s Agreement – National Consumer Commission directed appellant to hand over peaceful and vacant possession of house complete in all respects to complainant within one month from date of order and execute Sale Deed after obtaining Occupation Certificate – However, while issuing such directions to appellant, National Consumer Commission also directed complainant to pay balance sale consideration of Rs. 6,49,220/- within four weeks – Complainant was not able to get loan amount disbursed in his favour in absence of documents which appellant failed to supply to complainant – Ends of justice would be met if appellant is directed to refund amount of Rs. 3,24,780/- with 12% interest to original complainant and put an end to entire litigation – Impugned order passed by National Consumer Commission accordingly modified. (Paras 11, 12, 15, 17, 18 and 19)
Facts of the case:
Instant appeal is at the instance of the original complainant before the District Consumer Disputes Redressal Forum, Nagpur and is directed against the judgment and order passed by the National Consumer Disputes Redressal Commission, New Delhi, dated 12th December, 2019 in the Revision Petition No. 1185 of 2015 by which National Consumer Commission disposed of the Revision Petition filed by the appellant herein against the order passed by District Forum, Nagpur.
Findings of Court:
As the amount of Rs. 3,24,780/p with interest at the rate of 12 per cent per annum has been deposited by the appellant with National Consumer Commission with interest, it shall be open to the appellant to seek refund of the same so as to pay the entire amount to the complainant with the interest accrued upon it.
Result : Appeal disposed of with directions.
Legal Category Hierarchy
Table of Contents
2. Developer contended that the buyer failed to adhere to the payment schedule and loan disbursement was delayed due to the buyer's failure to provide documents. (Para 8 , 9 , 11 )
3. The court observed that the buyer failed to ensure loan disbursement and payment of balance consideration, and a sixteen-year delay makes specific performance impractical. (Para 15 , 18 )
4. Prolonged delay and failure of a party to perform contractual payment obligations may preclude the enforcement of a sale deed execution. (Para 18 )
5. Appeal disposed of by directing the developer to refund the deposited amount with interest to the complainant, absolving the developer of further liability. (Para 19 , 20 )
6. Can a developer be compelled to execute a sale deed after a prolonged delay and failure of the buyer to pay the balance consideration?
The court held that after a period of almost sixteen years, it would be impractical to ask a developer to execute a sale deed when the buyer failed to ensure loan disbursement and did not pay the balance consideration. (Para 18 )
7. What impact does a party's failure to comply with commission orders and failure to appear in court have on the enforcement of a sale agreement?
Failure to pay the balance consideration as directed by the National Consumer Commission and failure to appear before the court to oppose an appeal can lead to the termination of the developer's liability regarding the property. (Para 18 )
JUDGMENT :
J.B. PARDIWALA, J.
1. The respondents, although served with the notice issued by this Court, yet have chosen not to remain present before this Court either in person or through an advocate and oppose this appeal.
2. This appeal is at the instance of the original complainant before the District Consumer Disputes Redressal Forum, Nagpur (for short ‘the District Forum’) and is directed against the judgment and order passed by the National Consumer Disputes Redressal Commission, New Delhi (for short, ‘the National Consumer Commission) dated 12th December, 2019 in the Revision Petition No. 1185 of 2015 by which the National Consumer Commission disposed of the Revision Petition filed by the appellant herein against the order passed by the District Forum, Nagpur.
FACTUAL MATRIX
3. The respondent no. 1 herein is the Original Complainant. He lodged a complaint under Section 12 of the Consumer Protection Act, 1986 before the District Forum at Nagpur which came to be registered as the Consumer Complaint No. 305 of 2008.
4. The case of the respondent no. 1 before the District Forum was that the complainant and the appellant herein entered into a contract in connection with the purchase of a Twin Bungalow admeasuring 900 sq. ft. of super built up area situated at the Plot No. 132 at Tahsil and District Nagpur.
5. It appears from the materials on record that the appellant herein is a developer. The complainant entered into an agreement dated 08.06.2006 with the appellant herein for the purchase of the bungalow in question for a total sale consideration of Rs. 9,74,000/- (Rupees Nine Lakh Seventy Four Thousand only).
6. The understanding between the parties was that the complainant would pay an amount of Rs. 4,23,520/- (Rupees Four Lakh Twenty Three Thousand Five Hundred Twenty only) in cash to the appellant herein and the balance amount of Rs. 5,50,520/- (Rupees Five Lakh Fifty Thousand Five Hundred Twenty only) would be paid to the appellant herein after the complainant would get the loan disbursed in his favour from the respondent no. 2, the bank herein.
7. It appears from the materials on record that the bank sanctioned the loan of Rs. 6,40,000/- (Rupees Six Lakh Forty Thousand only) in favour of the complainant on 24.11.2006 but the same never came to be actually disbursed in favour of the complainant.
8. In the aforesaid context, disputes cropped up between the parties. In such circumstances, the complainant thought fit to file a complaint before the District Forum at Nagpur. Before the District Forum, the appellant herein admitted that it had entered into an agreement with the complainant for sale of the house in question. The appellant also admitted that the total sale consideration as fixed was at Rs. 9,74,000/- (Rupees Nine Lakh Seventy Four Thousand only). However, the appellant herein disputed having received an amount of Rs. 4,23,520/- (Rupees Four Lakh Twenty Three Thousand Five Hundred Twenty only) from the complainant.
9. The stance of the bank before the District Forum was that the home loan of Rs. 6,40,000/- (Rupees Six Lakh Forty Thousand only) was sanctioned in favour of the complainant and his wife on 24.11.2006. The bank called upon the complainant and his wife to submit the necessary documents regarding the property. However, the relevant documents were not furnished and, in such circumstances, the loan amount could not be actually disbursed in favour of the complainant and his wife.
10. The complaint was ultimately adjudicated by the District Forum and the same came to be partly allowed in the following terms:
“1. The complaint of the Complainant is partly allowed.
2. The Non-application No. 1 is directed that he should complete the construction of the house (semidetached bungalow) having a built-up area of 900 Sq. ft. on Plot No. 132, P.H. No. 38, Khasra No. 39/1, 39/2 and 39/3 having total area of 2101 Sq. feet, in Ghogal Layout, as per the agreement and hand over its possession to the Complainant and execute a Sal
