national consumer disputes redressal commission

National Consumer Disputes Redressal Commission: In a consumer complaint filed under Section 21(a)(i) of Consumer Protection Act, 1986 (‘CP Act’) for deficiency in service and unfair trade practice due to non-delivery of a flat by developers in its redevelopment project after collecting full sale consideration, Subhash Chandra, Presiding Member of NCDRC directed the developers to either hand over the possession of flat or refund the sum of Rs 1 crore paid by the complainant along with interest and litigation cost.

It was alleged that the complainant’s mother booked a flat on 9-05-2013 by depositing Rs 1 lakh, followed by two instalments of Rs 56 lakhs and Rs 43 lakhs between 1-06-2013 and 24-07-2013 and got receipts dated 30-08-2013 for the same. However, no agreement was signed as per Maharashtra Ownership of Flats (Regulations of the Promotion of Construction, Sale Management and Transfer) (Amendment) Rules, 1987. Her mother died on 14-04-2015 and the complainant became the sole applicant. On 14-08-2015, the developer acknowledged the receipt of only Rs 75 lakhs for the entire sale consideration of Rs 1 crore. It was stated that several allottees of the said project filed complaints with the Economic Offences Wing (‘EOW’) of Mumbai Police alleging cheating and fraud.

Commission’s Analysis

Reference was made to Sanjay Roy Chaudhary v. Uppal Housing Pvt. Ltd., 2019 SCC OnLine NCDRC 405 wherein, the complainant was not bound by the inter se arrangement between the opposite parties/developers. The instant case was squarely covered by the said judgment in the absence of any counter argument against the said position of law, as expressed by the Commission. The Commission acknowledged the material on record of complainant having paid the sum of Rs 1 crore in instalments towards the flat booked on 9-05-2013, and the complainant did not get possession of the same despite the passage of 10 years.

The complainant prayed for possession of the flat with damages for delay, or refund of amount paid with interest. The Commission pointed out the admission by the opposite party for the project being executed by it, having obtained necessary approvals from authorities, having commenced construction and arranging alternate accommodation for residents at its cost. It was contended by one of the opposite parties that its agreement with the other opposite party had terminated, and thus, it was not liable for such omissions and commissions while the matter was pending before the Bombay High Court.

The Commission remarked that the argument of dissolution of joint venture agreement relieving obligations of one of the opposite parties was misconceived and could not be accepted. The Commission highlighted the acceptance of full sale consideration against receipts in lieu of redevelopment project in the absence of entering any agreement between opposite parties and complainant and regarded the same as ‘clear case of unfair trade practice’. It further said that liability of joint venture could not be shirked by the opposite party based on its dissolution as per Sanjay Roy Chaudhary (supra) and Asia Foundations & Constructions Ltd., Bombay v. State of Gujarat, 1985 SCC OnLine Guj 93. The Commission relied on Kolkata West International City (P) Ltd. v. Devasis Rudra, (2020) 18 SCC 613 wherein, the Court said that “A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable” and Experion Developers (P) Ltd. v. Sushma Ashok Shiroor, 2022 SCC OnLine SC 416 regarding the interest payable to be restitutionary and compensatory on amount deposited in such cases.

The Court directed the opposite party to hand over the possession of the said flat along with copy of completion certificate with interest @9% per annum for delay in compensation from 1-06-2016 till the date of possession. It further directed opposite party to execute sale deed and conveyance deed in favour of the complainant. In case of failure to comply with the said directions, the Commission directed them to refund the entire amount of Rs 1 crore with a simple interest @9% per annum, and a sum of Rs 50,000 towards litigation costs.

[Pragna G. Mehta v. Sai Kamala Developers, Consumer Complaint No. 2461 of 2017, Order dated 31-08-2023]

Advocates who appeared in this case :

For Complainant: Advocate Ritesh Khare

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