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 

Comments

Popular posts from this blog

संविधान की प्रमुख विशेषताओं का उल्लेख | Characteristics of the Constitution of India

100 Questions on Indian Constitution for UPSC 2020 Pre Exam

भारतीय संविधान से संबंधित 100 महत्वपूर्ण प्रश्न उतर