EXPERION DEVELOPERS PVT. LTD. VS SUSHMA ASHOK SHIROOR

EXPERION DEVELOPERS PVT. LTD. VS SUSHMA ASHOK SHIROOR  - Supreme Court Case / Judgment 2022

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6044 of 2019

EXPERION DEVELOPERS PVT. LTD. ...APPELLANT(S)

VERSUS

SUSHMA ASHOK SHIROOR …RESPONDENT(S)

WITH

CIVIL APPEAL NO. 7149 of 2019

J U D G M E N T

PAMIDIGHANTAM SRI NARASIMHA, J.

1. These appeals under Section 23 of the Consumer Protection Act, 19861

,

arise out of the judgment dated 19.06.2019 passed by the National Consumer

Disputes Redressal Commission2

. The Commission directed the AppellantDeveloper to refund an amount of Rs. 2,06,41,379 with interest @ 9% p.a. to the

Respondent-Consumer3

for its failure to deliver possession of the apartment

within the time stipulated as per the Apartment Buyers Agreement. In these

1

hereinafter referred to as the “Act”.

2

hereinafter referred to as “Commission”.

3

hereinafter referred to as the “Consumer”.

Page 2 of 24

appeals, we have upheld the Commission’s order insofar as it directed the

Developer to refund the amounts paid by the Consumer with interest for the

unjustifiable delay in delivering the apartment. On law, we have considered the

interplay between the judicial remedies under the Act and the Real Estate

(Regulation and Development) Act, 2016 and have explained the remedial

choices of a consumer under these statutes. We have held that the Commission

created under the Act has the power to direct refund under Section 14 of the Act.

We conclude that the Act and the RERA Act neither exclude nor contradict each

other and they must be read harmoniously to subserve their common purpose.

2. The brief facts of the case are that the Developer, M/s Experion Developers

Private Ltd., is the promoter of apartment units, Windchants, in Sector 112,

Gurgaon, Haryana. The Consumer booked an apartment measuring 3525 sq. ft.

for a total consideration of Rs. 2,36,15,726/- in the Windchants and agreed for

construction linked payment plan, which led to the execution of the Apartment

Buyer’s Agreement dated 26.12.2012. As per Clause 10.1 of the Agreement,

possession was to be given within 42 months from the date of approval of the

building plan or the date of receipt of the approval of the Ministry of Environment

and Forests, Government of India for the Project or date of the execution of the

agreement whichever is later. Clause 13 of the Agreement provided for Delay

Compensation. Under this clause, if the Developer did not offer possession within

the period stipulated in the Agreement, it shall pay liquidated damages of Rs. 7.50

per square foot per month till possession is offered to the Consumer.

Page 3 of 24

3.1 The Consumer approached the National Disputes Redressal Commission

by filing an original complaint being, Consumer Case No. 2648/2017, alleging

that he has paid a total consideration of Rs. 2,06,41,379/- and possession was not

granted even till the filing of the complaint. He, therefore, sought a refund of Rs.

2,06,41,379/- along with interest @ 24% p.a.

3.2 The Developer filed its Written Statement before the Commission stating

that though the 42 months period expires on 26-6-20164

, the purchaser will only

be entitled to delay compensation under Clause 13, for a sum of Rs. 4,54,052/-.

Justification for the delay is given by pleading that the Occupation Certificate for

Phase-I of the project had already been obtained on 06.12.2017, and application

for Occupation Certificate for Phase-2, had already been made. In the affidavit of

evidence, the Developer contended that it secured the Occupation Certificate on

23.07.2018 and a notice of possession was issued to the Consumer on 24.07.2018.

It was claimed that since possession can be handed over, the complaint must be

dismissed.

4. The Commission, in its judgment dated 19.06.2019, allowed the complaint

after referring to Clause 10 (relating to the project completion period), Clause 11

(relating to the possession and conveyance of the apartment), as well as Clause

13 (relating to delay in possession). The Commission found that the agreement

4 The Commission in impugned order has recorded the statement of the Developer in the

reply dated 16.02.2018 raising preliminary objections where it admitted that the “The trigger

date for clause 10.1 is 26.12.2012 which is the date of execution of the apartment buyer’s

agreement.”

Page 4 of 24

is one-sided, heavily loaded against the allottee and entirely in favour of the

Developers. Following the decisions of this Court in Pioneer Urban Land and

Infrastructure Ltd. v. Govind Raghvan,5

(“Pioneer”), the Commission directed

the Developer to refund the amount of Rs.2,36,15,726/- with interest @ 9% p.a.

5.1 It is against these findings and the consequential directions of the

Commission that the Developer filed the present Civil Appeal No. 6044/2019.

The Consumer also filed an appeal being Civil Appeal No. 7149/2019,

challenging the Commission's judgment to a limited extent for grant of an

enhanced interest @ 24% p.a.

5.2 Assailing the judgment of the Commission, Shri Gagan Gupta, on behalf

of the Developer submitted that the decision of this Court in Pioneer has no

application to the facts of the present case, as in Pioneer, the Court did not have

to deal with Delay Compensation Clause like in the present case. Terms of the

Apartment Buyer’s Agreement alone, according to him, would govern the

relations between the parties. He argued that no prejudice would be caused to the

Consumer if he is asked to take possession of the property. Referring to the

provisions of the Real Estate (Regulation and Development) Act, 20166

and

particularly to the Regulations made by Haryana Real Estate Regulatory

Authority, which were relied on in Pioneer case, he submitted that the Consumer

5

 Pioneer Urban Land and Infrastructure Ltd. v. Govindan Raghvan (2019) 5 SCC

725

6

hereinafter referred to as “RERA Act”.

Page 5 of 24

has elected to proceed under the Consumer Protection Act, 1986 and therefore

the provisions of RERA Act will not apply and the Pioneer cannot be followed

as a precedent. In the alternative, he argued that the interest granted by the

Commission is excessive in both the period of the grant and the rate of interest.

5.3 Shri Jitendra Chaudhary, learned counsel on behalf of the Consumer,

supported the decision of the Commission on all counts and also relied on the

judgment of this Court in Pioneer. In his appeal, he argued that the rate of interest

granted by the Commission is far too low and urged for enhancement of the rate

of interest to @ 24% p.a. as demanded by her in the petition before the

Commission.

6. Having heard the parties the following issues arise for consideration:

I. Whether the terms of the Apartment Buyers Agreement amount to

an ‘unfair trade practice’ and whether the Commission is justified in not

giving effect to the terms of Apartment Buyer’s Agreement as laid down

in the Pioneer case?

II. Whether the Commission has the power under the Consumer

Protection Act, 1986 to direct refund of the amount deposited by the

Consumer with interest?

III. Whether the relief granted by the Commission require any

modification to serve ends of justice?

Page 6 of 24

RE: Issue No. I

7. Clauses 10.1 and 13.1 of the Apartment Buyers Agreement relating to

project completion period and delay compensation may be noticed:

“10 PROJECT COMPLETION PERIOD

10.1 “Subject to Force Majeure, timely payment of the

Total Sale Consideration and other provisions of this

Agreement, based upon the Company’s estimates as per

present Project plans, the Company intends to hand over

possession of the Apartment within a period of 42 (forty

two) months from the date of approval of the Building

Plans or the date of receipt of the approval of the Ministry

of Environment and Forests, Government of India for the

Project or execution of this Agreement, whichever is later

(‘Commitment Period’). The Buyer further agrees that the

Company shall additionally be entitled to a time period of

180 (one hundred and eighty) days (‘Grace Period’), after

expiry of the Commitment Period for unforeseen and

unplanned Project realities. However, in case of any

default under this Agreement that is not rectified or

remedied by the Buyer within the time period as may be

stipulated, the Company shall not be bound by such

Commitment Period.

13 DELAY COMPENSATION:

13.1 If the Company fails to offer the possession of the

Apartment to the Buyer by the end of the Grace Period (or

an alternate apartment within the meaning of this

Agreement), it shall be liable to pay to the Buyer liquidated

damages calculated at the rate of Rs. 7.50/- (Rupees Seven

and Fifty Paise only) per sq. ft. of Sale Area as full and

final settlement of any loss of whatsoever nature (‘Delay

Compensation’) for every month of delay or part thereof

until the date of Notice of Possession. The Buyer shall be

entitled to payment/adjustment of the Delay Compensation

only at the time of payment of the final installment and

other dues and charges payable to the Company before

assuming the possession of the Apartment. No other claim

of any description shall be raised against the Company”.

Page 7 of 24

8.1. On the question of reckoning the date for handing over of possession of the

apartment, the Commission recorded the fact admitted by the Developer in Para

2 of its reply that “the trigger date for clause 10.1 is 26.12.2012, which is the

date of execution of the apartment buyer’s agreement”. The Commission

calculated 42 months from this period, which turns out to be 26.06.2016. Further,

adding the grace period of 180 days, the time for delivery would expire on

26.12.2016. It is again an admitted fact that the occupancy certificated was

obtained only on 23.07.2018 and notice for possession was issued to the

Consumer on 24.07.2018. Given the factual position and having examined the

terms of the Agreement, the Commission found the judgment of this Court in

Pioneer is a relevant and conclusive precedent.

8.2. In somewhat similar factual as well as legal context, this Court in Pioneer

held as under:

“6.1 In the present case, admittedly the appellant builder

obtained the occupancy certificate almost 2 years after the

date stipulated in the apartment buyer’s agreement. As a

consequence, there was a failure to hand over possession

of the flat to the respondent flat purchaser within a

reasonable period. The occupancy certificate was

obtained after a delay of more than 2 years on 28-8-2018

during the pendency of the proceedings before the

National Commission. In LDA v. M.K. Gupta, this Court

held that when a person hires the services of a builder, or

a contractor, for the construction of a house or a flat, and

the same is for a consideration, it is a “service” as defined

by Section 2(o) of the Consumer Protection Act, 1986. The

inordinate delay in handing over possession of the flat

clearly amounts to deficiency of service. In Fortune

Infrastructure v. Trevor D’Lima, this Court held that a

Page 8 of 24

person cannot be made to wait indefinitely for possession

of the flat allotted to him, and is entitled to seek refund of

the amount paid by him, along with compensation.

6.2 The respondent flat purchaser has made out a clear

case of deficiency of service on the part of the appellant

builder. The respondent flat purchaser was justified in

terminating the apartment buyer’s agreement by filing the

consumer complaint, and cannot be compelled to accept

the possession whenever it is offered by the builder. The

respondent purchaser was legally entitled to seek refund

of the money deposited by him along with appropriate

compensation.

6.3 The National Commission in the impugned order dated

23-10-2018 held that the clauses relied upon by the builder

were wholly one-sided, unfair and unreasonable, and

could not be relied upon……...

6.8 A term of a contract will not be final and binding if it

is shown that the flat purchasers had no option but to sign

on the dotted line, on a contract framed by the builder. The

contractual terms of the agreement dated 8-5-2012 are ex

facie one-sided, unfair and unreasonable. The

incorporation of such one-sided clauses in an agreement

constitutes an unfair trade practice as per Section 2(r) of

the Consumer Protection Act, 1986 since it adopts unfair

methods or practices for the purpose of selling the flats by

the builder.

7. In view of the above discussion, we have no hesitation

in holding that the terms of the apartment buyer’s

agreement dated 8-5-2012 were wholly one-sided and

unfair to the respondent flat purchaser. The appellant

builder could not seek to bind the respondent with such

one-sided contractual terms.”

9.1 The principle laid down in Pioneer’s case has been followed consistently

in many cases where the terms of the Apartment Buyer’s Agreement were found

to be one-sided and entirely loaded in favour of the Developer, and against the

allottee at every step. The following are instances where the terms of the

Page 9 of 24

Apartment Buyer’s Agreement were found to be oppressive, constituting unfair

trade practice and the Court has not given effect to such terms of the Agreement:

9.2 In Arifur Rahman Khan v DLF Southern Homes Pvt. Ltd.7

, this Court held

that there is no embargo on the award of compensation beyond the rate stipulated

in the Apartment Buyer’s Agreement where handing over the possession of the

flat has been delayed. The Court observed that the Consumer Forums must take

a robust and a common-sense approach by taking judicial notice of the fact that

flat purchasers obtained loans and are required to pay EMIs to financial

institutions for subserving their debts. The Delay Compensation Clause provided

for Rs. 5 per square foot per month. This Court found that this stipulation is

clearly one-sided and does not maintain a level platform or even reflect a bargain

between the parties. The Court granted additional compensation @ 6% p.a.

simple interest to each buyer therein, over and above the Delay Compensation

Clause.

9.3 In NBCC v Shri Ram Trivedi8

, the Court found that the agreement fastening

liability on the purchaser to pay simple interest @ 12% p.a. if he failed to pay

instalments on time and at the same time, if the seller failed to hand over the

possession on time, he would have to pay compensation only @ of Rs. 2 per

square feet would constitute an unfair trade practice. The Court held that a term

7 Wing Commander Arifur Rahman Khan and Aleya Sultana & Ors. v. DLF Southern

Homes Private Limited (2020) 16 SCC 512

8 NBCC (India) Ltd. v. Shri Ram Trivedi (2021) 5 SCC 273

Page 10 of 24

of a contract would not be final and binding if it is shown that the flat purchasers

have no option but to sign on the dotted line of a contract framed by the builders.

The Court further held that Consumer Forums were empowered to award just and

reasonable compensation as an incident of its power to direct removal of a

deficiency in service; they are not constrained by the rate prescribed in the

agreement. The Court held that the compensation could be granted even if

possession had been delivered. The same principle followed in a subsequent

decision in DLF Home Developers Ltd. v. Capital Greens Flat Buyers9

.

9.4 A three-judge bench of this Court in IREO Grace Realtech (P) Ltd. V.

Abhishek Khanna10 noticed the delay compensation clause, which is similar to the

clause in the present case, which provided that the Developer would be liable to

pay delay compensation @ Rs 7.5 per square foot which works out to

approximately 0.9 to 1% p.a. The Court held that this Clause is one-sided and

entirely loaded in favour of the Developer and against the allottee. The Court

concluded that the powers of the Consumer Court were in no manner constrained

to declare a contractual term as unfair and one-sided as an incident of the power

to discontinue unfair or restrictive trade practices. It was held:

“34. We are of the view that the incorporation of such

one-sided and unreasonable clauses in the apartment

buyer’s Agreement constitutes an unfair trade practice

under Section 2(1)(r) of the Consumer Protection Act.

Even under the1986 Act, the powers of the consumer fora

9 DLF Home Developers Ltd. v. Capital Greens Flat Buyers Association & Ors. (2021) 5

SCC 537

10 IREO Grace Realtech (P) Ltd. v. Abhishek Khanna & Ors. (2021) 3 SCC 241

Page 11 of 24

were in no manner constrained to declare a contractual

term as unfair or one-sided as an incident of the power to

discontinue unfair or restrictive trade practices. An

“unfair contract” has been defined under the 2019 Act,

and powers have been conferred on the State Consumer

Fora and the National Commission to declare contractual

terms which are unfair, as null and void. This is a statutory

recognition of a power which was implicit under the 1986

Act.

35. In view of the above, we hold that the Developer

cannot compel the apartment buyers to be bound by the

one-sided contractual terms contained in the apartment

buyer’s Agreement.”

10. Having examined various decisions of this Court which considered similar

clauses in Apartment Buyer’s Agreement and following the ratio laid down in

Pioneer case, the submission made on behalf of the Developer has to be rejected.

We hold that the Commission is correct in its approach in holding that the clauses

of the agreement are one-sided and that the Consumer is not bound to accept the

possession of the apartment and can seek refund of the amount deposited by her

with interest.

Re : Issue No. II

11. Shri Gagan Gupta, submitted that the Consumer, having elected to

proceed under the Act, the provisions of the RERA Act will have no application.

The submission is made to distinguish the facts of the present case from the facts

of Pioneer, which is relied on by the Commission.

Page 12 of 24

12. This question is no more res integra. In Imperia Structures Ltd v. Anil

Patni11, this Court speaking through Justice Uday Umesh Lalit, examined the

jurisdiction of Consumer Forums vis-a-vis the specific remedies created under

the RERA Act. This judgment comprehensively deals with all aspects of parallel

remedies available to the consumers under the Consumer Protection Act, 1986,

and the RERA Act, 2016. In Imperia Structures, also, like in the present case,

the proceedings arose out of the decision of the Commission under the Consumer

Protection Act, 1986. After a comparative analysis of both the statutes, this Court

held as under:

“23. It has consistently been held by this Court that the

remedies available under the provisions of the CP Act are

additional remedies over and above the other remedies

including those made available under any special statutes;

and that the availability of an alternate remedy is no bar

in entertaining a complaint under the CP Act.

24. Before we consider whether the provisions of the RERA

Act have made any change in the legal position stated in

the preceding paragraph, we may note that an allottee

placed in circumstances similar to that of the

Complainants, could have initiated the following

proceedings before the RERA Act came into force:

A) If he satisfied the requirements of being a “consumer”

under the CP Act, he could have initiated proceedings

under the CP Act in addition to normal civil remedies.

B) However, if he did not fulfil the requirements of being a

“consumer”, he could initiate and avail only normal civil

remedies.

C) If the agreement with the Developer or the builder

provided for arbitration:-

i) in cases covered under Clause (B) hereinabove, he

could initiate or could be called upon to invoke the

remedies in arbitration.

11 13 Imperia Structures Ltd v. Anil Patni & Anr. (2020) 10 SCC 783

Page 13 of 24

ii) in cases covered under Clause (A) hereinabove, in

accordance with law laid down in Emaar MGF Land

Ltd. Vs. Aftab Singh, he could still choose to proceed

under the CP Act.

25. In terms of Section 18 of the RERA Act, if a promoter

fails to complete or is unable to give possession of an

apartment duly completed by the date specified in the

agreement, the promoter would be liable, on demand, to

return the amount received by him in respect of that

apartment if the allottee wishes to withdraw from the

Project. Such right of an allottee is specifically made

“without prejudice to any other remedy available to him”.

The right so given to the allottee is unqualified and if

availed, the money deposited by the allottee has to be

refunded with interest at such rate as may be prescribed.

The proviso to Section 18(1) contemplates a situation

where the allottee does not intend to withdraw from the

Project. In that case he is entitled to and must be paid

interest for every month of delay till the handing over of

the possession. It is up to the allottee to proceed either

under Section 18(1) or under proviso to Section 18(1). The

case of Himanshu Giri came under the latter category. The

RERA Act thus definitely provides a remedy to an allottee

who wishes to withdraw from the Project or claim return

on his investment.

26. It is, therefore, required to be considered whether the

remedy so provided under the RERA Act to an allottee is

the only and exclusive modality to raise a grievance and

whether the provisions of the RERA Act bar consideration

of the grievance of an allottee by other fora.

30. On the strength of the law so declared, Section 79 of

the RERA Act does not in any way bar the Commission or

Forum under the provisions of the CP Act to entertain any

complaint.

34. It is true that some special authorities are created

under the RERA Act for the regulation and promotion of

the real estate sector and the issues concerning a

registered project are specifically entrusted to

functionaries under the RERA Act. But for the present

Page 14 of 24

purposes, we must go by the purport of Section 18 of the

RERA Act. Since it gives a right “without prejudice to any

other remedy available”, in effect, such other remedy is

acknowledged and saved subject always to the

applicability of Section 79.

37. We may now consider the effect of the registration of

the Project under the RERA Act. In the present case the

apartments were booked by the Complainants in 2011-

2012 and the Builder Buyer Agreements were entered into

in November, 2013. As promised, the construction should

have been completed in 42 months. The period had expired

well before the Project was registered under the provisions

of the RERA Act. Merely because the registration under

the RERA Act is valid till 31.12.2020 does not mean that

the entitlement of the allottees concerned to maintain an

action stands deferred. It is relevant to note that even for

the purposes of Section 18, the period has to be reckoned

in terms of the agreement and not the registration.

Condition (x) of the letter dated 17.11.2017 also entitles

an allottee in same fashion. Therefore, the entitlement of

the Complainants must be considered in the light of the

terms of the builder buyer agreements and was rightly

dealt with by the Commission”.

13.1 In view of the clear and categorical principles laid down in Imperia, the

submissions made on behalf of the Developer have to be rejected. This position

has also been affirmed in IREO Grace (supra). In IREO Grace (supra) this Court

had an occasion to consider the question as to whether, the provisions of the

RERA Act, must be given primacy over the Consumer Protection Act, 1986.

After re-examining the provisions of Consumer Protection Act, 1986 and the

RERA Act, and following the principles laid down in Imperia the Court held as

under :-

“37. We will now consider the provisions of the RERA Act,

which was brought into force on 01.05.2016. The

Page 15 of 24

Statement of Objects and Reasons of the RERA Act, 2016

read as follows:-

“The Statement of Objects and Reasons – The real estate

sector plays a catalytic role in fulfilling the need and

demand for housing and infrastructure in the country.

While this sector has grown significantly in recent years,

it has been largely unregulated, with absence of

professionalism and standardization and lack of adequate

consumer protection. Though the Consumer Protection

Act, 1986 is available as a forum to the buyers in the real

estate market, the recourse is only curative and is not

adequate to address all the concerns of buyers and

promoters in that sector. The lack of standardization has

been a constrained to the healthy and orderly growth of

industry. Therefore, the need for regulating the sector has

been emphasized in various forums.

In view of the above, it becomes necessary to have a

Central legislation, namely, the Real Estate (Regulation

and Development) Bill, 2013 in the interests of effective

consumer protection, uniformity and standardization of

business practices and the transactions in the real estate

sector. The proposed Bill provides for the establishment of

the Real Estate Regulatory Authority (the Authority) for

regulation and promotion of real estate sector and to

ensure sale of plot, apartment or building, as the case may

be, in an efficient and transparent manner and to protect

the interest of consumers in real estate sector and establish

the Real Estate Appellate Tribunal to hear appeals from

the decisions, directions or orders of the Authority.

37.1. Section 18 of the RERA Act, 2016 provides the

remedy of refund with interest and compensation to

allottees, when a developer fails to complete the

construction or give possession as per the agreement of

sale. The remedies under Section 18 are “without

prejudice to any other remedy available.”

13.2 In coming to its conclusions, the three-Judge bench relied on the judgment

of Imperia which clarified and declared that Section 18 of the RERA Act

imposed a liability on the promoter to return the amount with interest to the

allottee upon its failure to give possession in accordance with the terms of the

Page 16 of 24

agreement. The expression “without prejudice to any other remedy” available in

Section 18 of the RERA Act is very important and while noting the same the

Court observed as under:

“42. In a recent judgment delivered by this Court in

Imperia Structures Ltd. v. Anil Patni, it was held that

remedies under the Consumer Protection Act were in

addition to the remedies available under special statutes.

The absence of a bar under Section 79 of the r to the

initiation of proceedings before a fora which is not a civil

court, read with Section 88 of the RERA Act makes the

position clear. Section 18 of the RERA Act specifies that

the remedies are “without prejudice to any other remedy

available”. We place reliance on this judgment..…”

14.1 From the two decisions referred to by us, it is crystal clear that the

Consumer Protection Act and the RERA Act neither exclude nor contradict each

other. In fact, this Court has held that they are concurrent remedies operating

independently and without primacy. When Statutes provisioning judicial

remedies fall for construction, the choice of the interpretative outcomes should

also depend on the constitutional duty to create effective judicial remedies in

furtherance of access to justice. A meaningful interpretation that effectuates

access to justice is a constitutional imperative and it is this duty that must inform

the interpretative criterion.

14.2 When Statutes provide more than one judicial fora for effectuating a right

or to enforce a duty-obligation, it is a feature of remedial choices offered by the

State for an effective access to justice. Therefore, while interpreting statutes

provisioning plurality of remedies, it is necessary for Courts to harmonise the

Page 17 of 24

provisions in a constructive manner. It is beneficial to juxtapose the preambular

objects of the Consumer Protection Act and the RERA Act to appreciate the

commonality of the objects that both these statutes are to sub-serve:

The Consumer Protection Act, 1986 The Real Estate (Regulation and

Development) Act, 2016

An Act to provide for the better

protection of the interests of

consumers and for that purpose to

make provision for the establishment

of consumer councils and other

authorities for the settlement of

consumers’ disputes and for matter

connected herewith.

An Act to establish the Real Estate

Regulatory Authority for regulation

and promotion of the real estate sector

and to ensure sale of plot, apartment or

building, as the case may be, or sale of

real estate project, in an efficient and

transparent manner and to protect the

interest of consumers in the real estate

sector and to establish an adjudicating

mechanism for speedy dispute

redressal and also to establish the

Appellate Tribunal to hear appeals

from the decisions, directions or

orders of the Real Estate Regulatory

Authority and the adjudicating officer

and for matters connected therewith or

incidental thereto.

14.3 In this context, the observation of this Court in Pioneer Urban Land

Infrastructure Ltd v. Union of India12 where the Court was called upon to

consider the provisions of Insolvency and Bankruptcy Code, 2016, the RERA

Act, 2016 and the Consumer Protection Act, 1986 is noteworthy:

12 Pioneer Urban Land Infrastructure Ltd. & Anr. v. Union of India & Ors. (2019) 8

SCC 416

Page 18 of 24

“100. RERA is to be read harmoniously with the Code, as

amended by the Amendment Act. It is only in the event of

conflict that the code will prevail over RERA. Remedies

that are given to allottees of flats/apartments are therefore

concurrent remedies, such allottees of flats/apartments

being in a position to avail of remedies under the

Consumer Protection Act, 1986, RERA as well as the

triggering of the Code.”

15. We may hasten to clarify that the power to direct refund of the amount and

to compensate a consumer for the deficiency in not delivering the apartment as

per the terms of Agreement is within the jurisdiction of the Consumer Courts.

Under Section 14 of the Consumer Protection Act, if the Commission is satisfied

…that any of the allegations contained in the complaint about the services are

proved, it shall issue an order to the opposite party directing him to, return to the

complainant the price or as the case may be, the charges paid by the complainant.

‘Deficiency’ is defined under Section 2(g) to include any shortcoming or

inadequacy in performance which has been undertaken by a person in pursuance

of a contract or otherwise relating to any service. These two provisions are

reproduced hereinbelow for ready reference.13

 It is clear from the statutory

13

“14. Finding of the District Forum. – (1) If, after the proceedings conducted under

section 13, the District Forum is satisfied that the goods complained against suffer from any

of the defects specified in the complaint or that any of the allegations contained in the

complaint about the services are proved, it shall issue an order to the opposite party directing

him to [do] one or more of the following things namely:-

(a)……

(b)….

(c) to return to the complainant the price, or, as the case may be, the charges paid by

the complainant;

…….

Page 19 of 24

position that the Commission is empowered to direct refund of the price or the

charges paid by the consumer.

16. A consumer invoking the jurisdiction of the Commission can seek such

reliefs as he/she considers appropriate. A consumer can pray for refund of the

money with interest and compensation. The consumer could also ask for

possession of the apartment with compensation. The consumer can also make a

prayer for both in the alternative. If a consumer prays for refund of the amount,

without an alternative prayer, the Commission will recognize such a right and

grant it, of course subject to the merits of the case. If a consumer seeks alternative

reliefs, the Commission will consider the matter in the facts and circumstances of

the case and will pass appropriate orders as justice demands. This position is

similar to the mandate under Section 18 of the RERA Act14 with respect to which

(hb) to pay such sum as may be determined by it, if it is of the opinion that loss or

injury has been suffered by a large number of consumers who are not identifiable

conveniently:

 Provided that the minimum amount of sum so payable shall not be less than five per

cent of the value of such defective goods sold or services provided, as the case may be, to such

consumers:

Provided further that the amount so obtained shall be credited in favour of such person

and utilized in such manner as may be prescribed.

……

(i) to provide for adequate costs to parties.

2. Definitions. – (1) In this Act, unless the context otherwise requires,-

…………

(g) “deficiency” means any fault, imperfection, shortcoming or inadequacy in the

quality, nature and manner of performance which is required to be maintained by or under any

law for the time being in force or has been undertaken to be performed by a person in

pursuance of a contract or otherwise in relation to any service;”

14

 18. Return of amount and compensation. - (1) If the promoter fails to complete or

is unable to give possession of an apartment, plot or building,—

Page 20 of 24

the Court clarified the position in Para 25 of Imperia case referred to herein

above.

17. We have referred to the legal regime under the Consumer Protection Act,

only to show that the Commission has the power and jurisdiction to direct return

of money under Section 14 of the Consumer Protection Act, if a consumer so

chooses. The freedom to choose the necessary relief is of the Consumer and it is

the duty of the Courts to honour it.

18. The Consumer in present case prayed for the solitary relief for return of the

amount paid towards purchase of the apartment without a prayer for alternate

relief. 15 Recognizing the right of the Consumer for return of the amount with

(a) in accordance with the terms of the agreement for sale or, as the case may be, duly

completed by the date specified therein; or

(b) due to discontinuance of his business as a developer on account of suspension or

revocation of the registration under this Act or for any other reason,

he shall be liable on demand to the allottees, in case the allottee wishes to withdraw

from the project, without prejudice to any other remedy available, to return the amount received

by him in respect of that apartment, plot, building, as the case may be, with interest at such rate

as may be prescribed in this behalf including compensation in the manner as provided under

this Act:

Provided that where an allottee does not intend to withdraw from the project, he

shall be paid, by the promoter, interest for every month of delay, till the handing over of the

possession, at such rate as may be prescribed.

(2) The promoter shall compensate the allottees in case of any loss caused to

him due to defective title of the land, on which the project is being developed or has been

developed, in the manner as provided under this Act, and the claim for compensation under

this sub-section shall not be barred by limitation provided under any law for the time being in

force.

(3) If the promoter fails to discharge any other obligations imposed on him

under this Act or the rules or regulations made thereunder or in accordance with the terms and

conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees,

in the manner as provided under this Act.”

15 The prayer made by the Consumer before the Commission is extracted herein for ready

reference:

Page 21 of 24

interest and compensation, the Commission passed an order directing the

Developer as under:

“The opposite party shall refund an amount of

Rs.2,06,41,379/- paid by the complainant along with

interest @ 9% p.a. from the date of last deposit before the

due date of possession till actual payment on the amount

paid before due date of possession and after this date if any

amount is deposited, then from the date of deposit till

actual payment.”

19. For the reasons stated above, we are of the opinion that the Commission

has correctly exercises its power and jurisdiction in passing the above directions

for refund of the amount with interest.

Re : Issue No. III

20. In the appeal filed by the Consumer, the learned counsel prayed that: (i)

the payment of interest must be from the date of payment of each instalment and

(ii) the rate of interest must be 24% p.a. He has referred to the dates on which he

has made payments, and sought interest from the said dates:

“PRAYER: It is, therefore, most respectfully prayed that This Hon’ble Forum may be

graciously be pleased to; (a) Hold the Opposite Party guilty of unfair and restrictive trade

practice as despite taking more than Rs. 2,06,41,379/- they have not completed the construction

in 42 months as promised in the apartment buyer’s agreement. (b) Hold the Opposite Party

guilty of cheating, misleading and responsible for deficiency in service as on one hand they

failed to complete the construction in terms of the agreement and on the other hand they have

charged the Complainant more than Rs.2,06,41,379/-. (c) direct the Opposite Party to refund

the amount of Rs. 2,06,41,379/- paid to the Opposite Party along with interest @ 24 % p.a.

totalling to Rs. 3,68,32,815/- (rupees Three Crores Sixty-Eight Lacs Thirty Two Thousand

Eight Hundred and Fifteen Only); (d) the Complainant be awarded future as well as

pendentelite interest @ 24 % p.a. (e) Pay a sum of Rs. 5,00,000/- towards cost of the complaint.

(f) Pass such other and further order(s) as this Hon’ble Forum may deem fit and proper under

the facts and circumstances of the case in favour of the Complainant and against the Opposite

Party.”

Page 22 of 24

Details of payment made to the respondent: -

Date Particulars Cheque

Amount

TDS

Amount

Total Amount

09.06.2012 State Bank of India

Ch. No. 976226

11,00,000.00 Nil/NA 11,00,000.00

08.08.2012 State Bank of India

Ch. No. 976245

11,98,457.00 Nil/NA 11,98,457.00

16.01.2013 State Bank of India

Ch. No. 976251

17,81,531.00 Nil/NA 17,81,531.00

02.09.2013 State Bank of India

Ch. No. 602777

17,74,289.00 17,923.00 17,92,212.00

16.01.2014 State Bank of India

Ch. No. 506049

17,74,290.00 17,923.00 17,92,213.00

19.04.2014 State Bank of India

Ch. No. 506055

17,74,290.00 17,923.00 17,92,213.00

24.07.2014 Punjab National Bank

Ch. No. 806197

14,56,709.00 14,714.00 14,71,423.00

22.09.2014 Punjab National Bank

Ch. No. 806204

14,56,709.00 14,715.00 14,71,424.00

15.12.2014 Punjab National Bank

Ch. No. 883394

14,56,706.00 14,715.00 14,71,421.00

09.02.2015 Punjab National Bank

Ch. No. 212657

24,14,594.00 24,390.00 24,38,984.00

16.02.2015 EFT No.

BKIDN15045404506

9,819.00 100.00 9,919.00

04.04.2015 EFT No.

SBINR520150404130637

12,04,780.00 12,169.00 12,16,949.00

15.07.2015 EFT No.

SBIN615196779388

6,44,134.00 10,135.00 6,54,269.00

14.08.2015 EFT No.

SBIN815226374771

12,21,122.00 11,735.00 12,32,857.00

31.10.2015 EFT No.

SBIN415304825817

11,92,402.00 11,735.00 12,04,137.00

08.06.2016 EFT No.

616019949933

13,370.00 Nil/NA 13,370.00

TOTAL: Rs. 2,06,41,379/- (Rupees Two Crore Six Lacs Forty One

Thousand Three Hundred and Seventy Nine Only)

21. On the other hand, the Appellant-Developer submitted that (i) period for

interest should be linked to the estimated date of possession and not the date of

Page 23 of 24

payments and (ii) the rate of interest must be the rate provided in the Interest Act,

1978.

22.1 We are of the opinion that for the interest payable on the amount deposited

to be restitutionary and also compensatory, interest has to be paid from the date

of the deposit of the amounts. The Commission in the order impugned has granted

interest from the date of last deposit. We find that this does not amount to

restitution. Following the decision in DLF Homes Panchkula Pvt Ltd v. DS

Dhanda16 and in modification of the direction issued by the Commission, we

direct that the interest on the refund shall be payable from the dates of deposit.

Therefore, the appeal filed by purchaser deserves to be partly allowed. The

interests shall be payable from the dates of such deposits.

22.2 At the same time, we are of the opinion that the interest of 9 per cent

granted by the Commission is fair and just and we find no reason to interfere in

the appeal filed by the Consumer for enhancement of interest.

23. We were informed that the Appellant-Developer deposited a sum of Rs.

50,000/- in the registry of this Court as per proviso to Section 23 of the Act. This

amount shall be made over to the Respondent-Consumer, to be adjusted against

the final amount payable by the Developer to the Consumer.

16 DLF Homes Panchkula Pvt. Ltd. v. DS Dhanda and Ors. (2020) 16 SCC 318 (at para

21).

Page 24 of 24

24. In view of the above, the Civil Appeal No. 6044 of 2019 filed by the

Appellant Developer is dismissed and the appeal filed by the Consumer being

Civil Appeal No.7149 of 2019 is allowed in part as indicated above.

25. Parties shall bear their own costs.

……………………………….J.

 [UDAY UMESH LALIT]

……………………………….J.

 [S. RAVINDRA BHAT]

……………………………….J.

[PAMIDIGHANTAM SRI NARASIMHA]

NEW DELHI;

APRIL 07, 2022