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2019 Supreme(Online)(SC) 1957
SUPREME COURT OF INDIA
INDU MALHOTRA, UDAY UMESH LALIT, JJ
Pioneer Urban Land & Infrastructure Ltd. – Appellant
Versus
Govindan Raghavan – Respondent
CIVIL APPEAL NO. 12238 OF 2018 | CIVIL APPEAL NO. 1677 OF 2019
For the Appellants/Petitioners: Mr. C.A. Sundaram
For the Respondents: Mr. Sushil Kaushik
Unfair contractual terms and inordinate delay in possession justify refund and interest claims under consumer protection laws.
Headnote:(A) Consumer Protection Act, 1986 - Section 23 - Appeal against the Final Judgment and Order dated 23.10.2018 passed by the National Commission on Consumer complaints - The Appellant failed to obtain the Occupancy Certificate and provide possession of the flat as per Agreement, leading to allegations of deficiency of service. The Consumer Complaint sought refund of entire amount with interest and compensation for harassment. The National Commission ruled in favor of the Respondent, ordering a refund along with interest at 10.7% per annum as per relevant regulations, affirming the one-sided, unfair terms of the Apartment Buyer’s Agreement. (Paras 3.8, 6.1, 6.2, and 9).
Facts of the case:
The Appellant launched a residential project, but failed to deliver possession of the flat within the agreed timeframe. The Respondent, who paid a significant amount, filed a complaint due to this delay, seeking a refund.
Findings of Court:
The National Commission found the terms of the Apartment Buyer’s Agreement to be unfair, and the delay in obtaining the Occupancy Certificate constituted a deficiency of service.
Issues: Whether the Appellant was justified in the delay of handing over possession, and the legitimacy of the contractual terms limiting the Respondent's rights.
Ratio Decidendi: Contractual terms that are one-sided and impose undue hardship on one party are considered unfair and unenforceable under consumer law. The delay in possession justified the Respondent's claims for a refund and interest.
Result: Appeals dismissed; the order of the National Commission is affirmed.
INDU MALHOTRA, J.
1. The present statutory Appeals have been filed under Section Signature Not Verified 23 of the Consumer Protection Act, 1986 to challenge the Final Digitally signed by MUKESH KUMAR Date: 2019.04.02 Reason: Judgment and Order dated 23.10.2018 passed in Consumer Case No. 238 of 2017 and Consumer Case No. 239 of 2017 by the National Consumer Disputes Redressal Commission (hereinafter referred to as “the National Commission”).
2. Since a common issue arises in both the Civil Appeals, they are being disposed of by the present common Judgment and Order.
3. For the sake of brevity, the facts in C.A. No. 12238 of 2018 are being referred to, being the lead matter.
The factual matrix of the said Civil Appeal is as under :
3.1. The Appellant – Builder launched a residential project by the name “Araya Complex” in Sector 62, Golf Course Extension Road, Gurugram.
The Respondent – Flat Purchaser entered into an Apartment Buyer’s Agreement dated 08.05.2012 with the Appellant – Builder to purchase an apartment in the said project for a total sale consideration of Rs. 4,83,25,280/-.
As per Clause 11.2 of the Agreement, the Appellant – Builder was to make all efforts to apply for the Occupancy Certificate within 39 months from the date of excavation, with a grace period of 180 days.
3.2. The excavation of the project commenced on 04.06.2012. As per Clause 11.2 of the Agreement, the Builder was required to apply for the Occupancy Certificate by 04.09.2015, or within a further grace period of 6 months i.e. by 04.03.2016, and offer possession of the flat to the Respondent – Flat Purchaser.
The Appellant – Builder however failed to apply for the Occupancy Certificate as per the stipulations in the Agreement.
3.3. The Respondent – Flat Purchaser filed a Consumer Complaint before the National Commission on 27.01.2017 alleging deficiency of service on the part of the Appellant – Builder for failure to obtain the Occupancy Certificate, and hand over possession of the flat. The Respondent prayed inter-alia for :-
• Refund of the entire amount deposited being Rs. 4,48,43,026/-, along with Interest @18% p.a.; and
• Compensation of Rs. 10,00,000/- for mental agony, harassment, discomfort and undue hardship; and
• Refund of the wrongfully charged taxes including Service Tax, and other charges along with Interest @18% p.a.; and
• Litigation Costs of Rs. 1,00,000/-.
3.4. On 06.02.2017, the National Commission passed an ex- parte Interim Order restraining the Appellant – Builder from cancelling the allotment made in favour of the Respondent – Flat Purchaser during the pendency of the Consumer Case.
3.5. During the pendency of the proceedings before the National Commission, the Appellant – Builder obtained the Occupancy Certificate on 23.07.2018, and issued a Possession Letter to the Respondent – Flat Purchaser on 28.08.2018.
3.6. The Appellant – Builder submitted before the National Commission that since the construction of the apartment was complete, and the Occupancy Certificate had since been obtained, the Respondent – Flat Purchaser must be directed to take possession of the apartment, instead of directing refund of the amount deposited.
3.7. The Respondent – Flat Purchaser however submitted that he was not interested in taking possession of the apartment on account of the inordinate delay of almost 3 years. The Respondent – Flat Purchaser stated that he had, in the meanwhile, taken an alternate property in Gurugram, and sought refund of the entire amount of Rs. 4,48,43,026/- deposited by him along with Interest @18% p.a.
3.8. The National Commission vide Final Judgment and Order dated 23.10.2018 allowed the Consumer Complaint filed by the Respondent – Flat Purchaser, and held that since the last date stipulated for construction had expired about 3 years before the Occupancy Certificate was obtained, the Respondent – Flat Purchaser could not be compelled to take possession at such a belated stage.
The grounds urged by the Appellant – Builder for delay in h
