Back
2022 Supreme(Online)(NCDRC) 982
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
MR. C. VISWANATH, PRESIDING MEMBER, MR. JUSTICE RAM SURAT RAM MAURYA, MEMBER
M/S. JAIPRAKASH ASSOCIATES LTD. – Appellant
Versus
RAJAT KHURANA – Respondent
FIRST APPEAL NO. 838 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:Mr. Vivek Pathak, Advocate, Mr. Abhay Gupta, Advocate, Mr. Tanuj Dogra, Advocate
Consumer protection rights for refunds persist even amid corporate insolvency proceedings against developers, emphasizing builder liability under joint promisor statutes.
Headnote:(A) Consumer Protection Act, 1986 - Sections related to refunds - Real Estate (Regulation and Development) Act, 2016 - Sections 19(4), 43 - Appeal from order directing refund for delayed possession - Appellant not absolved from liability despite corporate moratorium under IBC - Fundamental principle in consumer protection emphasized. (Paras 11-21)
(B) Joint Promisors - Liability of joint promoters under Contract Act - Promoters defined under RERA encompassing responsibilities of construction and sale - Consumer has the right for refund in case of unreasonable delay or deficiency in service. (Paras 17-22)
Facts of the case:
Complainant engaged in purchasing property from builder, who failed to deliver possession within stipulated time, hence sought refund along with compensation.
Findings of Court:
Upon assessing the claims and involving provisions of IBC and RERA, Court held that appellant is liable for refunds amid ongoing proceedings in corporate insolvency.
Issues: Whether proceedings in consumer court could continue against builder despite ongoing insolvency proceedings against the parent company?
Ratio Decidendi: The court supported position that consumer laws allow claims for refunds despite the insolvency proceeding, barring claims only against the corporate debtor directly.
Result: Appeal partly allowed; the appellant is directed to refund the amount with interest as modified.
| Table of Content |
|---|
| 1. introduction of parties and background of the case regarding property refund. (Para 1 , 2 , 3 , 4) |
| 2. details about homebuyer claims regarding non-delivery and unfair practices. (Para 5 , 6 , 7) |
| 3. discussion on insolvency implications and consumer complaint proceedings. (Para 8 , 9 , 10) |
| 4. court's stances regarding ongoing consumer complaints amid insolvency. (Para 11 , 14) |
| 5. emphasis on legal provisions regarding consumer refunds for delays. (Para 15 , 19 , 21) |
1. Heard Mr. Krishnan Venugopal, Senior Advocate, assisted by Mr. Sumeet Sharma, Advocate, for the appellant and Mr. Vivek Pathak, Advocate for the respondent. Mr. Aditya Parolia, Advocate argued as an intervener, on legal issue.
2. Jaiprakash Associates Limited (the opposite party) has filed above appeal from the order of State Consumer Disputes Redressal Commission, Uttar Pradesh, dated 13.11.2018, passed in CC/410/2017, partly allowing the complaint with cost of Rs.10000/- and directing the appellant to return Rs.2562000/- with interest @18% per annum from the date of respective deposit till the date of actual payment.
3. The office has reported 124 days delay in filing the appeal. The appellant has filed IA/7561/2019, for condonation of delay. Cause shown is sufficient. The delay in filing the appeal is condoned.
4. Rajat Khurana (the respondent) filed CC/410/2017 for directing Jaiprakash Associates Limited (the appellant) (i) to refund Rs.2562000/- with interest @18% per annum; (ii) to pay the complainant the entire amount of house rent borne by the complainant, amounting to Rs.25000/- per month from expiry of grace period till the date of actual realization; (iii) to pay a sum of Rs.250000/- to the complainant as litigation costs and compensation of Rs.1000000/-; and (vii) any other relief, which is deemed fit and proper in the facts and circumstance of the case.
5. The complainant stated that Jaiprakash Associates Ltd. (opposite party) (hereinafter referred to as the builder) was a company, 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 “Kosmos” at Jaypee Greens, Sector-128, Noida and made wide publicity in the year 2010. Allured with lucrative advertisements and believing on it, the complainant applied for a flat and deposited the required money of Rs.1.5/- lacs on 15.12.2010. The builder provisionally allotted Unit No.-KM0046-1702, Basic Sale Price of Rs.2655650/- on 28.01.2011. Under the allotment letter dated 28.01.2011, the builder assured to deliver possession within 36 months from the date of allotment. The builder provided subvention scheme, under which, loan was advanced from Axis Bank Limited. A quadripartite agreement was executed between the parties in July, 2011 and Axis Bank Limited directly advanced Rs.2281613/- on 11.07.2011 to the builder. The complainant paid Rs.2562000/- till 28.05.2012. The period of 36 months expired on 28.01.2014 and grace period of 180 days as given under Clause-7.2 of Standard Terms and Condition also expired on 28.07.2014. The builder 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 inquired about date of delivery possession. Then the builder vide letter dated 09.09.2014, regretted for delay in possession and informed that the possession would be given till March, 2016. But in March, 2016 also, possession was not offered. Then the complaint was filed, claiming deficiency in service and unfair trade practice.
6. The appellant filed its written reply in the complaint, in which, material facts relating booking/allotment of the flat and payments made by the complainant, including money advanced by Axis Bank Limited have not been disputed. The appellant denied of committing deficiency in service and unfair trade practice. The appellant stated that Taj Expressway (renamed
