NCDRC | Developer to refund principal amount of 3.4 Crores along with 9% interest in view of 4 years delay of giving apartment’s possession

National Consumer Disputes Redressal Commission (NCDRC): A Division bench of Justice R.K. Agrawal (President) and S.M. Kanitkar (Member) directed the developer to refund the principal amount along with compensation in the form of 9% p.a. interest and 25,000 as litigation costs in view of a 4-year delay in giving the possession of the apartment.

Consumer complaint was filed against Pioneer Urban Land and Infrastructure Limited.

Complainants booked an apartment in the Pioneer Group Housing Project called “Araya” for an amount of Rs 30,00,000. Pursuant to the execution of apartment buyer’s agreement, a unit was allotted to the complainants.

Complainants submitted that on visiting the site regularly they were surprised to see no progress in the construction of the project. Entire site seemed to be an abandoned piece of land with semi constructed structure. 

Failed to deliver the possession of Apartment

Till 16.12.2015 complainants had paid a sum of 3,22,18,954 out of the total consideration of 3,45,22,779 i.e. almost 95% of the total Consideration towards the cost of the apartment.

However, the Developer failed to deliver the possession of the Unit, complete in all respect, even after expiry of a long period of approx. five years despite repeated requests and remedies over letters, email, phone calls and personal visits.

Hence, in view of the above, complainants alleged deficiency in service on the developer’s part.

Complainants by the present petition sought more than contractual benefits from the developer.

Natural causes

Developer contended that the delay in completing the project was due to reasons beyond their control. Further, for refund and compensation, the Complainants have to adhere to the provisions made in Clause 11.5 of the Agreement.

Clause 11.5 of the Apartment-Buyer’s Agreement

Bench observed that, with regard to Clause 11.5 of the Agreement upon which the reliance has been placed by the Developer for refund and compensation payable to the Complainants, this Commission in Consumer Complaint No. 2000 of 2016 – Geeta Bansal v. Ireo Grace Realtech (P) Ltd.  – decided on 24-09-2018,  held that such a Clause is wholly one sided and unfair and, therefore, the Complainants would not be bound by the same. If the Developer is unable to justify the delay, this Commission would be competent to direct refund of the amount paid by them to the Developer along with appropriate compensation.

However, Pioneer had approached Supreme Court against the decision taken by Commission in the above Order, but Supreme Court affirmed the finding returned by this Commission and dismissed the Civil Appeals.

Hence, in the present matter, commission referring to the Supreme Court’s decision, allowed the complainant and directed the OP-Developer to refund the principal amount with compensation in form of simple interest @9% p.a. with costs of Rs 25,000 to be pid to the complainants.

Interest was awarded in light of the current market situation and three months times has been granted to the developer to refund the same. [Smita Uban v. Pioneer Urban Land & Infrastructure Ltd., Consumer Case No. 1430 of 2017, decided on 23-07-2020]

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