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2025 Supreme(Online)(NCDRC) 2611

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Inder Jit Singh, Presiding Member, Sudhir Kumar Jain, Member
CONNEL JABA MONI – Appellant
Versus
M/S. HIRANANDANI PALACE GREEN PVT. LTD. & 3 ORS. – Respondent
CONSUMER COMPLAINT NO. 546 OF 2017|CONSUMER COMPLAINT NO. 1918 OF 2017

Advocates:
For the Appellants/Petitioners: Sameer Abhyankar, Akshay Joshi, Niraj Singh, Ripul Swati
For the Respondents: Lakshmeesh Kamath, Anwesha Padhi, Vipul Singh, Neeraj Malhotra, Samriti Ahuja, Aditi Prakash, Nimish Gupta

A purchaser of a real estate project in an insolvency or SARFAESI e-auction steps into the shoes of the erstwhile builder, and is legally obligated to satisfy the liabilities toward allottees, including the obligation to refund deposits if the project is not completed within the promised timeline.

Headnote:(A) Consumer Protection Act, 1986 - Section 2 - Deficiency in Service - Refund of the amount deposited for flats - Failure to handover possession on stipulated date - Developers/OPs failed to complete the project on time - Liability of new Developer/OPs subsequent to SARFAESI takeover - Held, once a new promoter acquires a project via e-auction, they step into the shoes of the original builder/promoter, inheriting both rights and liabilities, including obligations towards allottees - The new OPs remained bound by their own committed completion dates even if the original deadline had passed during the transition - Failure to deliver possession within reasonable period after the committed date constitutes deficiency in service, entitling allottees to a refund of their total investment with interest. (Paras 8, 9, 11 and 12)

Facts of the case:
The complainants booked multiple residential apartments in a project developed by the initial OPs. After the initial developer failed to deliver possession by the promised date and subsequently defaulted on loans, the project was taken over by new developers (OPs 3 and 4) through an e-auction under the SARFAESI Act. The new developers promised a revised completion date of July 2016, which was further moved to early 2018. When the new developers also failed to meet their revised timeline, the complainants sought a full refund of their paid capital with interest.

Findings of Court:
The Commission held that the new builders, by acquiring the project, assumed the liabilities of the predecessor. Therefore, they are jointly and severally liable with the initial OPs to refund the amounts collected from the allottees. The plea that the developers are not liable because they did not receive the initial payments is rejected.

Issues: Whether the new project owners are liable for a refund of consideration paid to the previous developer and whether failure to deliver possession constitutes deficiency in service entitling the complainant to a refund.

Ratio Decidendi: A successor-in-interest who acquires a real estate project through e-auction assumes all liability towards existing allottees, and failure to complete the project within the time frame committed by said successor constitutes an actionable deficiency in service.

Result: Complaints allowed with directions to refund principal with 9% interest.

Table of Content
1. overview of builder-buyer dispute origins and project transfer via auction. (Para 1 , 2 , 3 , 4 , 5)
2. arguments regarding maintainability, privity of contract, and liability of auction purchasers. (Para 6)
3. legal liability of successor organizations in real estate projects. (Para 8 , 9 , 10 , 11)
4. directives for refunding principal amounts with interest rates. (Para 12 , 13)

ORDER

DR. INDER JIT SINGH, PRESIDING MEMBER

1. These two Consumer Complaints (CCs) have been filed by the Complainant(s) against Opposite Parties as detailed above, inter alia praying for directions to the OP(s) to:-

In CC/546/2017

(a) refund the entire amount of Rs.3,32,21,442/- with interest @18% p.a. from 01.08.2011 till realization.

(b) not to dispose off the apartments till the entire amount is refunded to the Complainants alongwith pendent-lite and future interest.

(c) pay damages and compensation Rs. 10,00,000/- to the Complainants on account of mental pain and agony, harassment, deficiency in service, deceptive and restrictive and unfair trade practice suffered by the complainants.

(d) pay Rs.5,00,000/- towards cost of litigation.

In CC/1918/2017

(a) refund the entire amount of Rs.3,28,68,375/- with interest @18% p.a. from 18.10.2011 till realization.

(b) not to dispose off the apartments till the entire amount is refunded to the Complainants alongwith pendent-lite and future interest.

(d) pay Rs.5,00,000/- towards cost of litigation.

2. Since the facts and question of law involved and the reliefs prayed for in these complaints are similar/identical and against the same Opposite Parties except for minor variations in the dates, amounts, events and flat numbers etc., which are summarized in the table at Annexure-A, these two complaints are disposed off by this common order. However, for the sake of convenience, Consumer Complaint (CC) No. 546 of 2017 is treated as the lead case and facts enumerated herein under are taken from CC 546/2017. However, directions shall be applicable to both CC 546/2017 and CC 1918/2017.

3. Notice was issued to the OP(s). OPs-1 & 2 were proceeded ex-parte vide order dated 04.10.2017. Parties filed Written Statement/Reply, Rejoinder, Evidence by way of an Affidavit and Written Arguments/Synopsis etc. as per details given in the Table at Annexure-A. The details of the flats allotted to the Complainant (s)/other relevant details, based on pleadings of the parties and other records of the case are also given in the Table-A.

4. Brief facts of the case, as emerged from the pleadings of the parties and other case records are that: -

In the year 2009, the Complainants booked five apartments, for gifting to their grandchildren, in the project of the Opposite Parties at 'Hiranandani Palace Garden' as per following details:

Sr.No.	Details of Apartment	Amount Paid (Rs.)
1.	Flat No. 1201	66,61,799.75
2.	Flat No. 1202	66,61,800.25
3.	Flat No. 1203	66,61,797.57
4.	Flat No. 1204	66,61,798.54
5.	Flat No. 1003	65,74,246.18
	Total	3,32,21,442.29

On 29.04.2009, the OP-1 issued offer letter for booking of the above said apartments mentioning that (a) OP-1 would provide apartments on 10th, 11th and 12th floor (b) Lock-in period will be reduced from 2 to 1 year (c ) 3 bedroom apartment will come with 2 parking (d) $7500 cash back 60 days after the initial 20% payment. The complainants paid Rs.10 lacs/ $20,000 to the OP-1 along with all the relevant documents. Till 08.01.2011, the complainants paid Rs.1,43,86,085/- the booking advance towards five flats (before signing the Agreement). On 18.10.2011, Agreement to Sale and Development Agreement was executed between the Complainants and OPs-1 & 2 with respect to each apartments. As per the Agreement, the OP-1 undertook to co

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2025 Supreme(Online)(NCDRC) 2611

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSIONInder Jit Singh, Presiding Member, Sudhir Kumar Jain, MemberCONNEL JABA MONI – AppellantVersusM/S. HIRANANDANI PALACE GREEN PVT. LTD. & 3 ORS. – RespondentCONSUMER COMPLAINT NO. 546 OF 2017|CONSUMER COMPLAINT NO. 1918 OF 2017

A purchaser of a real estate project in an insolvency or SARFAESI e-auction steps into the shoes of the erstwhile builder, and is legally obligated to satisfy the liabilities toward allottees, including the obligation to refund deposits if the project is not completed within the promised timeline.

Cases Referred (1)

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Inder Jit Singh, Presiding Member, Sudhir Kumar Jain, Member
CONNEL JABA MONI – Appellant
Versus
M/S. HIRANANDANI PALACE GREEN PVT. LTD. & 3 ORS. – Respondent
CONSUMER COMPLAINT NO. 546 OF 2017|CONSUMER COMPLAINT NO. 1918 OF 2017