IMPORTANT POINT
Joint Development Agreement (JDA) – Delay in handing over possession of flats – Landowners are jointly responsible with developer to ensure transfer of title to appellants – For lapse on part of developer, landowners, who are in no way concerned with construction, cannot be held liable for deficiency in service.

JUDGMENT

ALOK ARADHE, J.

1. These appeals, filed under Section 67 of the Consumer Protection Act, 2019 arise out of the impugned judgment and final orders dated 30.07.2024 and 19.10.2023 passed by National Consumer Disputes Redressal Commission (Commission) in the Review Petition and consumer case respectively.

2. Facts giving rise to filing of these appeals, briefly stated, are that landowners entered into a Joint Development Agreement (JDA) with the developer on 24.02.2012 and executed General Power of Attorney (GPA) in favor of the developer. On 21.02.2013, the developer obtained the sanctioned plan and a construction licence. Thereafter, from 29.07.2013, onwards the developer executed the Memoranda of Sale Agreements with the flat buyers. Under the Sale Agreements, the developer agreed to handover the possession of flats within 36 months.

3. The initial 36 months period for handing over the possession of the flats expired on 24.08.2016. The grace period of six months also expired on 24.02.2017. However, the project remained incomplete. On 05.06.2017, the appellants issued a notice seeking redressal for delay in handing over the possession of the flats.

4. The appellants filed a Complaint before the Commission on 18.08.2017 alleging deficiency in service and unfair trade practices. By judgment and final order dated 19.10.2023, the Commission found deficiency in service due to delay of more than six years in handing over the possession of the flats. The developer was directed to complete the construction of the flats allotted to the appellants, obtain occupancy certificate, if not already obtained and handover the possession of the flats within three months from the date of the order. The developer was further directed to pay interest @ 6% per annum on the amount deposited by the appellants from the due date of possession as per their respective agreements till the date of offer of possession, within six weeks, failing which delay interest would carry interest @ 9% per annum. The landowners were not held liable for delay, as the obligation to complete the construction rested solely with the developer.

5. The appellants filed a review petition seeking to hold the landowners jointly and severally liable and to enhance the compensation awarded, to Rs.5/- per square feet per month, as provided in the agreement, along with interest @ 6% per annum. By an order dated 15.12.2023 passed in Chamber, the Commission partly allowed the Review Petition and held the landowners jointly and severally liable for completion of construction and for payment of delay compensation. However, the relief to award delay compensation @ Rs.5/- per square feet along with 6% interest, on the deposits made by the appellants was declined. The Review Petition was accordingly disposed of.

6. The landowners challenged the aforesaid order dated 15.12.2023 before this Court in SLP (C) No.9470/2024. By an order dated 03.05.2024, this Court held that the order dated 15.12.2023 in the Review Petition was passed without affording any opportunity of hearing to the landowners. Accordingly, the order dated 15.12.2023 was set aside and the Commission was directed to dispose of the Review Petition after giving an opportunity of hearing to the contesting parties, within a period of six weeks.

7. By an order dated 30.07.2024, the Commission inter alia held that in view of JDA and Sale Agreement, the landowners cannot be held jointly and severally liable for the deficiency in service. However, the landowners and the developer were directed to transfer the title of the property in question and proceed with the execution of the sale deed in favour of the appellants. The Review Petition was thus partly allowed.

8. The challenge in these appeals is confined to the extent, the impugned orders hold the landowners not jointly and severally not liable along with the developer for payment of compensation for deficiency in service.

9. Learned counsel for the appellants submitted that the lando