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2022 Supreme(Online)(NCDRC) 981
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
MR. C. VISWANATH, PRESIDING MEMBER, MR. RAM SURAT RAM MAURYA, MEMBER
JAIPRAKASH ASSOCIATES LIMITED – Appellant
Versus
DEEPI KUMAR & 2 ORS. – Respondent
FIRST APPEAL NO. 380 OF 2019
For the Appellants/Petitioners:Mr. Krishnan Venugopal, Senior Advocate, Mr. Sumeet Sharma, Advocate, Mr. Tenzen Negi, Advocate, Mr. Paras Chaudhary, Advocate, Mr. Kaushik Advocate, Ms. Pallavi, Advocate
For the Respondents:For Respondent-1:Mr. Piyush Sharma, Advocate, For Respondent-2:Mr. Devendra Kumar, Advocate, For Respondent-3:Mr. Mayank Singh, Advocate, For Intervener:Mr. Aditya Parolia, Advocate
Homebuyers are entitled to refunds with interest even when the developer is undergoing insolvency, as obligations remain despite corporate status.
Headnote:(A) Consumer Protection Act, 1986 - Section 2(1)(d) - Real Estate (Regulation and Development) Act, 2016 - Section 19(4) - Dispute regarding possession of flats - Builders failed to deliver possession within stipulated time - Consumer forum directed refund with interest, but appeal allowed to modify interest rate to 9% and affirmed compensation due to unreasonable delay. (Paras 2, 7, 8, 20, 21)
(B) Jurisdiction and Insolvency - Insolvency and Bankruptcy Code, 2016 - Section 63, 231, 238 - Claims of home buyers during insolvency proceedings - Appellants argued for abatement of complaints due to moratorium - Held that complaint against co-promoter for refund is not abated. (Paras 10, 14)
Facts of the case:
The complainant engaged builders for a housing project but faced delays in possession. Builders cited force majeure events. The State Commission ruled in favor of the complainant leading to the appeal from builders.
Findings of Court:
The appellant is liable for refund under the Consumer Protection Act and the Real Estate Act, irrespective of their contractual status as a developer or agent. Interest awarded was modified due to similar decisions in precedent cases.
Issues: Whether the proceedings against the appellant are abated due to ongoing insolvency of the principal builder; whether refund and interest claims are valid against the appellant as a co-promoter.
Ratio Decidendi: The court emphasized the unyielding obligations of developers under consumer law and affirmed homebuyers' rights even amidst insolvency proceedings due to distinct culpability of developers. Interest rate of refund modified to 9% based on precedents to ensure fairness.
Result: Appeal partly allowed and refund ordered with adjusted interest rate.
| Table of Content |
|---|
| 1. hearing and delay in appeal process. (Para 1 , 3 , 4) |
| 2. nature of complaint against builders. (Para 2 , 5 , 6 , 7) |
| 3. developer obligations. (Para 8 , 12 , 20) |
| 4. jurisdiction during insolvency proceedings. (Para 10 , 11) |
| 5. outcomes regarding claims and refunds. (Para 18 , 21) |
ORDER
1. Heard Mr. Krishnan Venugopal, Senior Advocate, assisted by Mr. Sumeet Sharma, Advocate, for the appellant and Mr. Piyush Sharma, Advocate, for the respondent-1, Mr. Devendra Kumar Singh, Advocate, for respondent-2, Mr. Mayank Singh, Advocate, for respondent-3. Mr. Aditya Parolia, Advocate, as an intervener, on legal issue.
2. Jaiprakash Associates Limited (opposite party-2) has filed above appeal from the order of State Consumer Disputes Redressal Commission, Uttar Pradesh, dated 24.10.2018, passed in CC/347/2016, partly allowing the complaint with cost of Rs.10000/- and compensation of Rs.20000/- and directing the appellant to return Rs.4778280/- with interest @18% per annum from the date of respective deposit till the date of actual payment, firstly to Axis Bank Limited (opposite party-3), who had advanced loan to the complainant and secondly the balance amount to the complainant.
3. The office has reported 89 days delay in filing the appeal. The appellant has filed IA/3673/2019, for condonation of delay. Cause shown is sufficient. The delay in filing the appeal is condoned.
4. Deepti Kumar (respondent-1) filed CC/347/2016 for directing Jaypee Infratech Limited and Jaiprakash Associates Limited (opposite parties-1 and 2) (i) to refund Rs.4776280/- with interest @24% per annum, from the date of respective deposits till the date of refund, (ii) to pay Rs.39586/-, per month from 16.11.2015 till the date of refund, (iii) to pay Rs.20000/- per month towards rent from 16.11.2015 till the date of refund, (iv) to pay just compensation and punitive damages, (v) to direct opposite party-3 to pay Rs.5/- lacs, for committing unfair trade practice, (vi) to pay Rs.10000/-, as the cost of litigation; and (vii) any other relief, which is deemed fit and proper in the facts and circumstance of the case.
5. The complainant stated that Jaypee Infratech Limited (respondent-2) and Jaiprakash Associates Limited (the appellant) (hereinafter referred to as the builders) were companies, registered under Companies Act, 1956 and engaged in the business of developing and constructing group housing project. They launched a group housing project in the name of “Garden Isles” at Jaypee Greens, Sector-131 &133, Noida and made wide publicity in the year 2011. Allured with lucrative advertisements and believing on it, the complainant applied for a flat and deposited the required money of Rs.2.5/- lacs on 06.02.2012. The builders provisionally allotted Unit No.-GDI 25-2103 (super area 1205 sq.ft., Basic Sale Price of Rs.4359690/- Total Consideration of Rs.4898890/-, including Rs.2.5/- lacs for Car Parking Space) on 16.05.2012. Under the allotment letter dated 16.05.2012, the builders promised to deliver possession within 42 months from the date of allotment. The builders provided subvention scheme, under which, loan was advanced from Axis Bank Limited (opposite party-3). A quadripartite agreement dated 29.06.2012 was executed between the parties and Axis Bank Limited directly advanced Rs.3889200/- on 03.08.2012 to the builders. The complainant paid Rs.490000/- on 18.06.2012, Rs.134233/- on Rs.29.08.2012 and Rs.12847/- on 28.03.2013 (total Rs.4776280/- including loan amount). The period of 42 months expired on 16.11.2015 and grace period of 180 days as given under Clause-7.2 of Standard Terms and Conditions expired on 16.05.2016. The builders did not give any information regarding progress of the construction nor offered possession till then and paid delayed compensation as per Clause-7.2. The complainant, vide letter dated 01.09.2016 inquired about date of delivery possession and requested for payment of delayed compensation but the builders did not respond. Then the
