UTPAL TREHAN VERSUS DLF HOME DEVELOPERS LTD.

UTPAL TREHAN VERSUS DLF HOME DEVELOPERS LTD.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



REPORTABLE  
                        
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4690 OF 2022
(Arising out of SLP (C) NO.19226 OF 2021)
UTPAL TREHAN   .... APPELLANT(S)
VERSUS
DLF HOME DEVELOPERS LTD.        .... RESPONDENT(S)
WITH
CIVIL APPEAL NOS. 4691­4692 OF 2022
(Arising out of SLP (C) NOS.5871­5872 OF 2022)
     J U D G M E N T
ANIRUDDHA BOSE, J.
Leave   is   granted   on   the   limited   question   which   was
formulated by this Court at the time of issue of notices, by the
order passed on 3rd January 2022 in SLP (C) No.19226 of 2021.
So far as SLP (C) Nos.5871­5872 of 2022 are concerned, leave
is granted on the point on which the appellants thereof had
confined their grievances, recorded in our order passed on 19th
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April,   2022.   We   shall   refer   to   these   points   later   in   this
judgment.   The   controversy   which   we   shall   address   in   this
judgment revolves around the quantum of compensation that
the appellant in SLP (C) No.19226 of 2021 (now appeal) would
be entitled to receive because of delay in delivery of possession
of a flat as also the appellant’s obligation to pay maintenance
charges in respect thereof. 
2. The specific disputes giving rise to these appeals relate to
an Apartment Buyers’ Agreement, executed on 3rd  December,
2008 between Utpal Trehan (whom we shall henceforth refer to
as “allottee”) and DLF Home Developers Limited (we shall refer
to   them   as   the   “builder”)   for   purchase   of   a   flat,   within   a
complex named New Town Heights in Sector­91, Gurgaon (now
Gurugram),   Haryana.   This   was   booked   by   the   allottee   on
depositing a sum of Rs.5 lakhs in March 2008. The allotment
letter was issued on 16th April 2008, and allocation was made of
Apartment No. GBD­153 along with its parking.   As per the
Apartment Buyers’ Agreement, the area of the flat was to be
1760 square feet (super area). The consideration amount was
Rs.45,12,000/­, to be paid as per instalment payment plan
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forming   part   of   the   Agreement.   The   stipulation   relating   to
possession of the flat is contained in Clauses 11 and 17 of the
said   Agreement.     A   copy   of   the   draft   Agreement   has   been
annexed to the allottee’s paper book. In substance, the time for
possession has been stipulated to be within 36 months from
the   date   of   execution   of   the   Agreement   subject   to   certain
qualifications  and   exceptions   incorporated  in   the   Agreement
itself. This date of delivery of possession, along with the effects
thereof, underwent certain changes, as there was delay on the
part of the builders in getting certain regulatory clearance. Mr.
Pinaki Mishra, learned Senior Advocate has appeared for the
builder and the allottee has appeared in person before us.
3. The facts forming genesis of the grievances of the allottee
have   been   summarised   in   the   decision   of   the   National
Consumer   Dispute   Redressal   Commission   (“National
Commission”)   delivered   on   23rd  July   2021,   which   is   under
appeal before us. We quote below the relevant passages from
this decision:­
“12.  ….. The allotment letter dated 16.04.2008 and
Annexure­3   to   the   Apartment   Buyer’s   Agreement
dated 03.12.2008 provided a "Time Linked Payment
Plan”   under   which   95%   of   the   sale   consideration
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(including Rs. 5,00,000/­ of booking amount) had to
be paid in 11 instalments starting from 29.05.2008
and   ending   on   29.06.2010.   Vide   Clause­12   of   the
Allotment Letter dated 16.04.2008 and Clause­11 of
Apartment Buyer's Agreement dated 03.12.2008, the
possession had to be handed over within 36 months
from the date of agreement. Environment Clearance
Certificate was delayed as such the builder could not
start construction till May, 2009, i.e. more than one
year from booking. In such circumstances, the builder
through letter dated 26.03.2009, amended the terms
of the agreement and the payment of the instalments
were   changed   as   “construction   Linked   Payment
Plan”.  The   builder   has   simultaneously   provided
various benefits to the buyers, i.e. Advance Payment
Rebate in the shape of interest at the rate of 13% p.a.
on the amount in excess of 35% of sale price as on
26.03.2009, 5% discount of basic sale price, increase
of   approximately   5%   area   and   compensation   for
delayed possession @ Rs.10/­ per Sq. ft. per month
from   the   date   of   expected   possession   till   actual
possession and Timely Payment Rebate, equivalent to
10% basic sale price. Letter dated 23.06.2009 and
statement of account dated 10.06.2013 prove that the
benefits of (i) Rs.9059/­ as Advance Payment Rebate,
(ii) Rs. 1,98,000/­ as 5% discount of basic sale price
and (iii) increase of 5% area have been given to the
complainant. 
13.  The complainant argued that “Timely Payment
Rebate” and “compensation for delay in possession”
had not been given in statement of the account dated
10.06.2013,  for which he was entitled. The builder
has denied the Timely Payment Rebate on the ground
that   in   spite   of   service   of   demand   letter   dated
29.12.2011, the amount due was not deposited till
last date i.e. 18.01.2012, rather it was deposited on
27.01.2012 (without including the amount of interest
accrued   on   it   in   the   meantime).   As   the   time   was
essence   of   contract   and   this   instalment   was   not
deposited in time as such the complainant was not
entitled for Timely Payment Rebate.”
(quoted verbatim from paperbook)
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We   shall   discuss   separately   the   position   of   the   respective
parties as regards obligation of the allottee to pay maintenance
charges.
4. The allottee had approached the Delhi State Consumer
Disputes Redressal Commission (“State Commission”), in the
month of May 2015, after the builder had raised additional
demands under different heads. As per the allottee, the total
sum,   as   demanded,   added   upto   Rs.9   lakhs   approximately.
Otherwise, the allottee claims to have had cleared the requisite
instalments.  At that point of time, the main complaint of the
allottee   was   of   being   deprived   of   certain   payment   related
benefits on being offered possession of the flat.  He was being
denied these benefits, since as per the builder, the allottee had
made default in payment within the due date on demand of the
developer of the ensuing instalment. As would be apparent from
the said passages of the decision under appeal, the builder’s
contention   is   that   by   a   notice   of   29th  December   2011,   the
allottee was to pay the next instalment by 18th January 2012,
but this  was  paid  on  27th  January 2012.  The builder  thus
alleged nine days’ delay. The allottee’s stand on this count, on
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the other hand, was that he had not received the notice of 29th
December 2011, but on receiving a reminder on 22nd January
2012, he cleared the dues on 27th January of that year.
5. The delivery and payment stipulations were modified on
account of delay in getting environmental clearance and these
modifications, as made by the builder, has been summarised in
the   passage   quoted   above   from   the   National   Commission
decision. So, we are avoiding a repeat of these modification
terms in this judgment.
6. Before the State Commission, the allottee prayed for the
following reliefs:­
“4. …….  i.  Give the possession of the said flat at the
earliest.
ii. Pay an amount of Rs. 10,00,000/­ as compensation for
causing mental trauma and agony to complainant due to
delay in giving the possession.
iii.  Also pay additional delayed possession rent  @ Rs.
15/­ sq. ft. till the possession is offered to complainant.
iv.  Further   waive   of   the   undue/unjustifiable   demand
already raised towards the final dues settlement.
v. To pay Rs. 50,000/­ towards the expenses incurred by
the complainants towards telephonic communications and
personal visits made to OP since 2006. 
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vi. To pay a sum of Rs. 75,000/­ towards the payment of
litigation expenses.”
(quoted verbatim from paperbook)
7. During   pendency   of   the   proceeding   before   the   State
Commission, an application was filed by the builder to bring on
record   certain   subsequent   events.   What   was   sought   to   be
brought   on   record   included   crediting   to   the   allottee
compensation for delayed possession of Rs.4,22,816/­, Timely
Payment Rebate of Rs.4,02,076/­ and interest of Rs.14,082/­.
This application also highlighted that certain sum of money was
already credited to the allottee’s account under the head of
Early Payment Rebate. This application also showed the liability
of   the   complainant   (i.e.   the   allottee)   of   Rs.3,16,899/­   as
maintenance   charges,   Rs.96,000/­   as   IBM   charges   and
Rs.14,18,203/­   as   holding   charges.   The   said   application
appears   to   have   been   filed   subsequent   to   an   attempt   at
mediation   while   the   dispute   was   pending   before   the   State
Commission.
8. The State Commission found that there was deficiency in
service and the complaint was allowed in following terms:­
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“20. …… i. OP shall issue fresh offer of possession of the
apartment in question i.e. GBD­153, New Town Heights in
Sector­91, Gurgaon to the complainant and shall handover
the possession of the apartment to the complainant within
a period of 06 weeks. 
ii. OP shall also execute the sale deed/conveyance deed
and get it registered in the name of the complainant on
payment of stamp duty, registration charges and  other
incidental charges, if any, by the complainant, within a
period of one month thereafter.
OP shall pay to the complainant the delayed compensation
@ Rs. 10/­ per sq. ft. per month for the delayed period
from the agreed date of possession i.e. March, 2011 till the
date   of   fresh   offer   of   possession   after   adjusting   the
delayed compensation already paid to the complainant.”
(quoted verbatim from paperbook)
9. On the question of maintenance charges, however, the
State Commission went against the allottee, holding : ­
“19.   As   regards   payment   of   Rs   3,16,899/­   towards
maintenance charges, and Rs.14,18,204/­ toward holding
charges @ Rs. 10 per square feet till 11.10.2018, as is
stated in the aforesaid handing over the cheque issued
earlier a new cheque can be issued against the same. 
As   on   date,   the   complainant   is   liable   to   make   the
following payment as per the agreement:
i. Maintenance charges (till 30.09.2018) – Rs.3,16,899.
ii. IBMS (Interest Bearing Maintenance Security) – Rs.
96,000/­
iii.   Holding   Charges   (@   Rs.   10/­   per   sq.   ft.   till
11.10.2018) – Rs.14,18,203/­.
However, upon suggestions from this Hon’ble Commission,
the   opposite   party   shall   consider   waiving   the   holding
charges accruing day by day and hence, nothing remains
payable to the opposite party. The maintenance security
and the maintenance charges incurred towards upkeep of
the   multi­storey   building   as   mentioned   above   shall   be
payable   to   the   Condominium   Association   who   are
maintaining   the   property   inquestion   since   the   date   the
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property   was   ready   for   possession   and   was
conveyed/offered to the complainant.”
(quoted verbatim from paperbook)
10. One of the critical issues which was examined by the
State Commission was as to whether there was any delay in
payment   of   instalment   by   the   allottee   upon   demand   being
made.  This question arose as the builder had denied certain
benefits to the appellant which would have accrued to him if
timely   payment   of   instalments   was   made   on   demand.   The
builder alleged that the demand in this case was made on 29th
December 2011 requiring the allottee to make payment by 18th
January 2012. As we have already discussed, the allottee took
the   plea   that   the   letter   of   29th  December   2011   was   never
received by him and when he received a reminder letter of 19th
January 2012 on 22nd January 2012, he made the payment on
27th  January   2012,   factoring   in   certain   holidays   which
intervened.   The   State   Commission   examined   this   issue   and
gave   a   finding   on   fact  that   the  material   on  record  did   not
establish that the demand notice of 29th  December 2011 was
served   on   any   adult   family   member/known   person   of   the
allottee and that the developer had failed to prove service of
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demand notice upon the allottee. The State Commission thus
held that the allottee could not be deprived of the benefits
outlined   in   the   builder’s   letter   of   26th  March   2009   on   the
allegation of failure to pay instalment within due date. 
11. The appeal of the allottee to the National Commission
was mainly against the finding given by the State Commission
on maintenance charges. The builder questioned legality of that
part of the decision of the State Commission under which they
were directed to issue fresh offer of possession and payment of
delayed compensation.
12. The   National   Commission   partly   allowed   both   the
appeals, inter­alia holding:­ 
“In view of aforementioned discussions First Appeal No.
1530 of 2019 is partly allowed and First Appeal No. 1638
of 2019 is partly allowed. DLF Home Developers Ltd., (the
builder) is directed to (i) offer possession of the apartment
in   dispute   to   the   complainant   afresh   and   hand   over
possession to the complainant within 6 weeks and execute
the sale/conveyance deed in his name, within one month
thereafter, on payment of stamp duty, registration charges
and other incidental legal charges, (ii) pay compensation
for delay in possession, i.e interest @ Rs. 6%­ per annum
on the sale price deposited by him for the delayed period
from July, 2013 till the date of fresh offer of possession,
adjusting   “Early   Payment   Rebate”   of   Rs.95,136/­   as
mentioned in statement of account dated 10.06.2013 and
(iii) pay “Timely Payment Rebate” i.e 10% of basic sale
price.   The   builder   is   entitled   to   realise/adjust   the
Maintenance charges, from the date of issue of Occupation
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Certificate   and   cost   of   increased   area   (i.e.   the   area
increasing to 5% of the increased area). The builder shall
pay a cost of Rs.50,000/­ to the complainant to meet out
his litigation and other expenses.”
(quoted verbatim from paperbook)
13. So far as the allotee’s appeal is concerned, (arising out of
SLP (C) No.19226 of 2021) at the time of issue of notice, this
Court had passed the following order:­
“Heard petitioner in person. 
Issue   notice   limited   to   the   question   of   maintenance
charges as provided for by NCDRC in the concluding part
of the order impugned. Notice may be made returnable in
four weeks.
Dasti service in addition to order in process permitted.”
14. In the appeal filed by the builder, at the stage of issue of
notice on the petition for special leave to appeal, it was recorded
in   our   order   of   19th  April   2022   that   the   learned   counsel
appearing   for   the   petitioner,   (i.e.,   the   builder)   essentially
confined his submissions to the grievance of the petitionerdeveloper   in   regard   to   the   directions   by   the   National
Commission and the State Commission for making ‘a fresh offer
of possession’. We have indicated earlier in this judgment that
we are granting leave restricted to these two questions only.
15. We shall first deal with the question of directions to pay
to the builder maintenance charges. In the definition Clause
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and Clauses 19, 20 and 39 of the Apartment Buyer’s Agreement
dated 3rd December 2008, it has been specified:­
“Definitions
……
Maintenance   Agency"  means   DHDL   or   association   of
allottees   or   such   other   agency/body   to   whom   the
maintenance of the Said Building/Said Complex (including
common areas and facilities) is handed over by DHDL and
who shall be responsible for providing the maintenance
services within the Said Building /Said Complex and who
shall be entitled to collect the Maintenance Charges.”
“19.  Maintenance   of   the   Said   Building/Said
Complex/Said Apartment
In order to provide necessary maintenance services, upon
the completion of the Said Building/ Said Complex the
maintenance of the Said Building/Said Complex may be
handed over to the association of Apartment allottees or
such   other   agency/   body/   company/   association   of
condominium. The Allottee agrees to execute Maintenance
Agreement (draft given in Annexure VII to this Agreement)
with   the   Maintenance   Agency   or   any   other   nominee/
agency or other body/ association of Apartment owners as
may   be   appointed   by   DHDL   from   time   to   time   for   the
maintenance   and   upkeep   of   the   Said   Land/the   Said
Building/the Said Complex. This Agreement shall not be
deemed to be executed till the same is signed by all the
parties. The Allottee further undertakes to abide by the
terms and conditions of the Maintenance Agreement and
to pay promptly all the demands, bills} charges as may be
raised   by   the   Maintenance   Agency   from   time   to   time.
DHDL reserves the right to change, modify, amend, impose
additional conditions in the Maintenance Agreement at the
time of its final execution. The Maintenance Charges shall
become   applicable/   payable   from   the   date   DHDL   has
received the occupation certificate/the date of allotment
whichever is later. It is further clarified that DHDL may at
its sole discretion hand over the maintenance of the Said
Building/   Said   Complex   to   anybody/association   of
Apartment   owners   of   the   Said   Building/Said   Complex
including   but   not   limited   to   any   body/   association   of
condominium of the Said Building/ Said Complex, as the
case may be, at any time before/ after the construction of
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the Said Building/ Said Complex is complete either for
each   building   or   for   the   entire   Said   Complex   and   the
Allottee specifically gives his consent to this proposal. It is
further   specifically   clarified   that   the   draft   Maintenance
Agreement, set out in Annexure VII to this Agreement is
merely  an  indicative   Agreement  that   is  proposed   to  be
entered into with the Allottee for maintenance and upkeep
of the Said Building/ Said Complex, however, if at any
time,   after   having   taken   over   the   Said   Building/   Said
Complex,   the   said   association   of   Apartment   owners/
condominium of association decides to modify, alter, add,
delete any one or more of the terms and conditions of the
Maintenance Agreement, the Allottee shall not have any
objection to the same and shall execute the Maintenance
Agreement as may be required by the Maintenance Agency
or   association   of   Apartment   owners   or   association   of
condominium or its nominees or assigns.
20. Fixation of total Maintenance Charges
The   total   Maintenance   Charges   shall   be   more
elaborately described in the Maintenance Agreement (draft
given in Annexure VII). The Maintenance Charges shall be
levied from the date of occupation certificate or the date of
allotment, whichever is later and the Allottee undertakes
to pay the same promptly. It is agreed by the Allottee that
the payment of Maintenance Charges will be applicable
whether or not the possession ofSaid Apartment is taken
by   the   Allottee.   The   Maintenance   Charges   shall   be
recovered on such estimated basis which may also include
the overhead cost on monthly/quarterly intervals as may
be   decided   by   the   Maintenance   Agency   and   adjusted
against   the   actual   audited   expenses   as   determined   at
every end of the financial year and any surplus/deficit
thereof   shall   be   carried   forward   and   adjusted   in   the
maintenance bills of the subsequent financial year. The
estimates of the Maintenance Agency shall be final and
binding   on   the   Allottee.   The   Allottee   agrees   and
undertakes to pay the maintenance bills on or before due
date as intimated by the Maintenance Agency.
……
39. Association of apartment owners
The Allottee agrees and undertakes to join association/
society   of   apartment   owners   as   may   be   formed   by
DHDL/Company on behalf of Apartment owners and to
pay any fees, subscription charges thereof and to complete
such documentation and formalities as may be deemed
necessary by DHDL/ Company for this purpose.”
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(quoted verbatim from paperbook)
16. Annexure VII to that Agreement appears at Page 185 of
the paperbook in SLP (C) No. 19226 of 2021, which is in the
form   of   a   draft.   The   actual   copies   of   the   Agreements,   if
executed, have not been annexed to the paperbooks filed in
either of these two appeals. No material has otherwise been
produced   before   us   to   show   if   the   Maintenance   Agreement
(Annexure VII to the main Agreement) was executed or not. Be
that   as   it   may,   even   if   we   proceed   on   the   basis   that   the
maintenance Agreement is applicable, the same constitutes a
tripartite Agreement involving the builder, New Town Heights
Condominium   Association,   a   registered   society   and   the
purchaser. This is in the format of a standard form Agreement
with several portions thereof left blank. In the counter affidavit
of the builder, it has been stated that the maintenance charges
are   not   paid   to   them   but   to   the   statutory   condominium
association   of   allotees   who   actually   renders   maintenance
services recovered from each allotee. That association to us
appears to be an independent body and there is nothing on
record to  demonstrate that  such  association  is an  agent  of
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either   the   builder   or   the   purchasers.   In   Clause   39   of   the
Apartment   Buyers’   Agreement,   there   is   hint   that   such   an
Association might be formed by the builder but no particular of
its formation, or for that matter, its existence have been shown
before us at the time of hearing. 
17. The definition of Maintenance Agency means “DHDL (the
builder) or association of allottees or such other agency…….”
but the conjunction “or” as has been applied in the definition
clause ought  to  mean  in  the  alternative and  this  definition
cannot be construed to infer that even after handing over the
maintenance work to an association, the builder shall continue
to   remain   as   a   maintenance   agency   entitled   to   collect
maintenance charges. The clause relating to fixation of total
maintenance charges only specifies the obligation of an allottee
to pay such charges and the substantive Agreement specifies
again that the maintenance charges would be payable to the
maintenance agency. 
18. In   so   far   as   the   subject   dispute   is   concerned,   the
builder’s case, as stated above, is that the maintenance agency
is to receive the maintenance charges but no specific case has
15
been made out that the builder themselves are carrying on the
maintenance work, which could have brought them within the
definition of maintenance agency under the main Agreement. In
such circumstances, we are unable to appreciate as to how, in
dealing with the allotees’ complaint against the builder, the two
statutory   fora   passed   orders   which   effectively   required   the
allotee to make over payment as maintenance charges to a third
party, the association in this case. We have already observed
that   from   the   materials   on   record,   no   principal­agent
relationship has been established between the builder and the
association as regards the Maintenance Agreement entitling the
builder to claim and receive maintenance charges. The builder,
at best, is facilitator in organising a maintenance agency. The
overall obligation of a flat buyer to pay maintenance charges
may be derived from interpretation of clause 20 of the main
Agreement. But without any claim from the entity, who are to
render maintenance services and charge for the same, in our
opinion, the two statutory fora ought not to have directed the
allottee to make payment of maintenance charges. The National
and the State Commissions, in our opinion, have committed
error in directing the allotee to make payment of maintenance
16
charges, which ought to have been paid to the association when
there  was  no   claim   from   the   association   in  the   first   place.
Secondly, nothing has been brought to our notice from which it
could be inferred that the builder had the authority to represent
the   association   for   collecting   maintenance   charges.   On   the
other hand, as we have already indicated, the builder’s own
case is that the maintenance charges ought to be paid to the
association.   The   latter   (i.e.,   the   association)   has   not   been
impleaded as a party at any stage of these proceedings. Nor
they have prosecuted any claim.
19. We must point out here that from the two orders of the
State and the National Commissions, we do not find that the
point on right of the builder to claim maintenance charges was
specifically   discussed.   In   the   complaint   before   the   State
Commission, point was taken that in absence of delivery of
possession, charging for maintenance by the association was
unjustified but the principle which we have discussed in the
preceding three paragraphs are purely legal issues and goes to
the root  of  the dispute relating to payment  of maintenance
charges. Moreover, question of law formulated in paragraph 2D
17
of   the   allottee’s   special   leave   petition   (now   appeal),   in   our
opinion, is broad enough to cover this issue. While determining
rights of parties on a question of law which emerges from the
pleadings and crystallises for adjudication, we cannot ignore
answering that question. For otherwise, an incorrect principle
of law may have to be laid down on account of failure of the
litigants in raising it in clear terms. Moreover, the nature of the
dispute having originated from a consumers’ grievance, the role
of the Court has to be beyond just being an adjudicatory forum
in   an   adversarial   cause,   and   must   have   an   element   of
proactivity in public interest.  Having returned a specific finding
on this point, we do not consider it necessary to deal with the
allottee’s   contention   that   claim   of   maintenance   charge   was
unjustified in absence of possession of the subject­flat being
delivered to them. 
20. Now we shall turn to the legality of the decision under
appeal issuing direction upon the builder to make payment of
delayed   compensation.   The   provision   relating   to   delayed
compensation   is   contained   in   Clause   17   of   the   main
Agreement:­ 
18
“17. Failure to deliver possession : Remedy to DHDL:
The   Allottee   agrees   that   if   the   construction   and
development of the Said Complex is abandoned or
DHDL is unable to give possession within thirty six
(36)   months   from   the   date   of   execution   of   this
Agreement   or   such   extended   periods   as   permitted
under   this   Agreement,   DHDL   shall   be   entitled   to
terminate this Agreement whereupon DHDL's liability
shall be limited to the refund of the amounts paid by
the Allottee with simple interest @ 6% per annum for
the period such amounts were lying with DHDL and
DHDL shall not be liable to pay other compensation
whatsoever. 
However,   DHDL   may,   at   its   sole   option   and
discretion, decide not to terminate this Agreement in
which   event   DHDL   agrees   to   pay   only   to   the
Allottee(s) and not to anyone else and only in cases
other than those provided in Clauses 14, 15, 16 and
50 and subject to the Allottee not being in default
under any term of this Agreement, compensation @
Rs.   5/­   per   sq.   ft.   of   the   Super   Area   of   the   Said
Apartment  per month for the period of such delay
beyond   thirty   six   (36)   months   or   such   extended
periods   as   permitted   under   this   Agreement.   The
adjustment of such compensation shall be done only
at the time of conveyancing the Said Apartment to the
Allottee   first   named   in   this   Agreement   and   not
earlier.”
(quoted verbatim from paperbook)
21. As there was delay in obtaining regulatory clearance for
the   project,   the   builder   themselves   had   made   certain
modifications in the terms of the Agreement, providing certain
benefits   to   the   flat   buyers.   This   was   done   by   the
communication   dated  26th  March   2009  (at   page  223   of  the
19
paper book in the allottee’s appeal). The relevant portion of this
communication reads:­
“As   far   as   "New   Town   Heights"   is   concerned,   we
would   like,   to   mention   here   that   the   necessary
Building Plan Approvals for all the sectors of “New
Town Heights” have been received. As you know, we
are a highly compliant organisation, and we would
like to start construction only after we have received
the final Environment Clearance, which is awaited.
As soon as we receive the same, we shall commence
the construction. However, to allay any fear that you
might   have   as   far   as   the   handing   over   period   is
concerned,   we   hereby   revise   the   Compensation
Clause No. 17 of the Agreement to Sell, to the extent
of doubling the Compensation payable to Rs. 10/­
psft per month, as against Rs. 5 /­ psft per month,
that was applicable earlier. Similarly, if the customer
delays   in   taking   over   the   possession   once   the
possession is offered by the Company, he/she shall
also be liable to pay Holding Charges at the same
rate,   ie.,   Rs.   10/­   psft   per   month,   for   the   delay
involved in taking over the possession. 
We stand behind our promised date of delivery as 3
years, as we have already communicated earlier. We
have amended this clause to "3 Years from the date
of   booking"  instead   of   '3   years   from   the   date   of
Agreement', which was the earlier commitment.”
(quoted verbatim from paperbook)
The   direction   of   the   State   Commission   on   delayed
compensation has already been quoted in this judgment. The
National Commission, however, modified this directive, which
has   also   been   quoted   in   the   earlier   paragraph.   This
modification has been questioned by the allotee. 
20
22. Paragraphs   15   and   16   of   the   National   Commission’s
decision disclose the reasoning for modifying the directive of the
State   Commission   upon   the   builder   to   pay   delayed
compensation. Such modification is as regards the quantum of
compensation   and   the   relevant   part   of   the   National
Commission’s order is reproduced below:­ 
“15.   So   far   as   the   compensation   for   delayed
possession   is   concerned,   the   complainant   has
accepted part of the benefits given under the letter
dated 26.03.2009 and is claiming remaining benefits.
By this letter, mode of payment of the instalments
were   changed   as   “construction   Linked   Payment
Plan”. The construction was started in May, 2009.
After adjusting the amount till March, 2009 and the
benefits given by the letter dated 26.03.2009, on it,
the   complainant   was   asked   to   deposit   instalment
some time in 2010. Demand notice dated 16.03.2012,
shows that Terrace Floor Slab was completed at that
time   and   demand   notice   dated   18.06.2012   shows
that the builder had applied for issue of Occupation
Certificate, which has  been issued  on 28.02.2013.
Thereafter,   final   accounts   of   the   buyers   were
prepared and possession was offered through letter
dated   10.06.2013.   Due   to   delay   in   starting
construction   payment   schedule   of   the   instalments
was changed and to mete out suffering of the buyers,
various   benefits   were   provided.   Delay   in   offering
possession had occurred as construction could not be
started   for   more   than   one   year   of   booking.   lf   the
buyers were required to payment instalments on later
dates than the dates fixed in the agreement, then
how it can be expected that the possession could be
given   within   three   years   of   the   agreement.   In   the
circumstances, the builder was justified in not giving
compensation   for   delayed   possession   in   the
statement of account dated 10.06.2013.
21
16. However, as we found that the complainant was
entitled   for   "Timely   Payment   Rebate”   as   such
statement   of   the   account   dated   10.06.2013   and
demand   on   its   basis   was   illegal.   In   such
circumstances we direct the builder to pay 6% p.a.
interest on the amount deposited by the complainant
toward basic sale price, as compensation for delay in
possession   from   July   2013   till   date   of   offer   of
possession as directed by Supreme Court in Wg. Cdr.
Arifur  Rahman  Khan  Vs.  DLF   Southern  Homes
Pvt. Ltd., (2020) 16 SCC 512.”
(quoted verbatim from paperbook)
23. We are, however, unable to accept this reasoning. So far
as start of the running time for quantifying delayed payment of
compensation from March 2013 is concerned, we find that the
builder themselves had modified the relevant clause by their
letter dated 26th March 2009, amending the starting date for
computing delayed payment of compensation from end of three
years from the date of Agreement to three years from the date of
booking. Thus, the date of booking in the case of the allottee
being March 2008, the State Commission had rightly directed
payment of delayed compensation from March 2011. 
24. Mr. Mishra has urged that the entire responsibility for
delivery of possession of the flat should not fall on his clients as
the allottee himself could have applied before the adjudicatory
forum for possession thereof subject to outcome of the case.
22
But   this   argument   in   our   view   is   fallacious.   The   dispute
between   the   parties   primarily   arose   as   the   builder   denied
substantial   benefits   to   the   allottee   for   nine   days’   delay   in
clearing instalment. This allegation of delay has been rejected
by the Consumer Fora and their concurrent finding is that no
proper demand was made for payment of such instalment. Mr.
Mishra has, in his submissions, emphasised on the “offer for
possession” letter dated 10th June 2013 and his submission is
that obligation to pay delayed payment compensation cannot go
beyond that date. The builder’s case is that they cannot be held
responsible if the allottee does not take possession of the flat,
when offered. A copy of this letter has been annexed at page
235 of the builder’s paperbook. On a plain reading of this letter,
we find that the builder offered physical possession only on
remitting of payments as per statement of accounts, which was
for a sum of Rs.9,00,382/­ and on furnishing an undertaking.
The National Commission found that the statement of account
dated 10th June 2013 and demand on that basis was illegal. As
the offer for possession was conditional on settling of accounts
and,   as   the   accounts   reflected   illegal   demand,   the   builder
cannot argue that there was a valid offer for possession under
23
the letter dated 10th  June 2013. In this background, in the
event the allottee wanted proper adjudication of his rights and
liabilities before asking for interim possession of the flat which
would have had carried with it unspecified obligations, no fault
can be found in such conduct of the allotee.
25. Reliance   has   been   placed   on   the   judgments   of   two
coordinate Benches of this Court in the cases of  DLF Homes
Panchkula Pvt. Ltd. vs D.S. Dhanda and Ors. [(2020) 16 SCC
318] and DLF Home Developers Ltd. And Another vs Capital
Greens Flat Buyers Association & Ors. [(2020] SCC Online SC
1125] in support of the argument of the builder that “Delay
Compensation” could be awarded only upto the date of offer of
possession.  But in this case, we have already held that there
was  no  valid   offer  for   possession.    In   the  case  reported  in
[(2020) 16 SCC 318], interest was directed to be paid by way of
compensation on deposited amount from the promised date of
possession to the actual date of handing over possession, and
the coordinate Bench directed, inter­alia, payment of interest at
the rate of 9% per annum for a period of two months from the
date of offer for possession.  In the case of Capital Greens Flat
24
Buyers   Association  (supra),   interest   was   awarded   as
compensation for delay in delivery of possession.   The latter
judgment was delivered in the special circumstances of that
case.     We   accept   the   argument   advanced   on   behalf   of   the
builder   that   time   for   payment   of   compensation   for   delayed
payment   shall   stop   running   from   the   date   of   offer   for
possession.     But   in   this   case,   there   was   no   valid   offer   for
possession.  Mr. Mishra also sought to bring to our notice the
proposals   made   in   course   of   mediation   proceeding.     But
mediation obviously failed between the parties and we cannot
refer to what transpired during the process of mediation while
adjudicating the right of the parties in an appeal. 
26. The   ratio   of   the   judgment   in   the   case   of  Wing
Commander   Arifur   Rahman   Khan   and   Aleya   Sultana   and
Others vs DLF Southern Homes Pvt. Ltd. and Others [(2020)
16 SCC 512] does not apply in the facts of the present case. The
aforesaid   decision   was   rendered   in   a   context   in   which   a
coordinate Bench of this Court found the Agreement involved in
that   case   was   lopsided,   giving   unjustified   advantage   to   the
25
builder.   The   relevant   paragraph   from   the   judgment   is
reproduced below:­
“25. The   only   issue   which   then   falls   for
determination   is   whether   the   flat   buyers   in   these
circumstances   are   constrained   by   the   stipulation
contained   in   Clause   14   of   ABA   providing
compensation for delay @ Rs 5 per square feet per
month. In assessing the legal position, it is necessary
to record that the ABA is clearly one­sided. Where a
flat purchaser pays the instalments that are due in
terms of the agreement with a delay, Clause 39(a)
stipulates that the developer would “at its sole option
and   discretion”   waive   a   breach   by   the   allottee   of
failing   to   make   payments   in   accordance   with   the
schedule,   subject   to   the   condition   that   the   allottee
would be charged interest @ 15 per cent per month
for   the   first   ninety   days   and   thereafter   at   an
additional penal interest of 3% p.a. In other words, a
delay on the part of the flat buyer attracts interest @
18% p.a. beyond ninety days. On the other hand,
where a developer delays in handing over possession
the flat buyer is restricted to receiving interest at Rs 5
per square feet per month under Clause 14 (which in
the submission of Mr Prashant Bhushan works out to
1­1.5% interest p.a.). Would the condition which has
been prescribed in Clause 14 continue to bind the flat
purchaser indefinitely irrespective of the length of the
delay? The agreement stipulates thirty­six months as
the   date   for   the   handing   over   of   possession.
Evidently,   the   terms   of   the   agreement   have   been
drafted  by the  developer. They do  not  maintain a
level   platform   as   between   the   developer   and
purchaser. The stringency of the terms which bind the
purchaser   are   not   mirrored   by   the   obligations   for
meeting timelines by the developer. The agreement
does not reflect an even bargain.”
27. So   far   as   the   present   appeals   are   concerned,   the
quantum of delayed compensation has been enhanced by the
26
builder themselves, along with provision for enhancement with
respect to the delay in payment if made by the allottee in taking
possession.   In   such   circumstances,   we   do   not   think   the
National   Commission   ought   to   have   had   deviated   from   the
modified   contractual   terms   contained  in   the   communication
dated 26th  March 2009 and replace the said terms with 6%
interest per annum from July 2013 till the date of fresh offer of
possession was made. In our opinion, on the point of payment
of delayed compensation, the State Commission’s view was the
right view. 
28. Now comes the question as to which date shall be treated
to be the date for fresh offer of possession. Both the fora have
directed the builder to issue fresh offer of possession as per the
dates specified in the order.   The directions of the State and
National Commissions were not to operate with retrospective
effect, from 10th June 2013. The argument of the builder is that
a possession offer letter was issued on that date. This letter
showed   certain   sum   of   balance   and   also   included   certain
demands on account of cost of increase in apartment size area,
further EDC and IDC charges, stamp duty charges, etc. Some
27
rebates were also denied to the allottee on account of delay in
payment of instalment by nine days, which we have discussed
in the preceding paragraphs of this judgment. In an application
dated 15th November 2018, which was filed on 7th January 2019
before the State Commission, the builder admitted their fault in
not providing any compensation for delayed payment in the
aforesaid   letter   of   10th  June   2013   and   prayed   that   the
complainant (i.e., the allottee) be directed to pay excess amount
as specified in the said application and take possession of the
apartment. The State Commission found that, as per the said
application,   the   builders   had   admitted   wrong   calculation   in
settling the credits in the account of the allottee. In fact, the
builders then had given the credit for a sum of Rs.2,40,210/­
and issued a cheque for the said sum, which the allottee did
not   encash.   Such   conduct   on   the   part   of   the   allottee   was
justified   as   the   dispute   was   still   pending   before   the   State
Commission. The State Commission found deficiency of service
on   the   part   of   the   builder   by   sending   wrong   statement   of
accounts along with the letter of possession and as per the
finding of the State Commission, the allottee was deprived in
taking possession of the flat, which was offered, because of
28
these factors. The National Commission did not take a contrary
view and in fact came to a finding that the statement of account
dated 10th  June 2013 and demand on that basis was illegal.
These findings arrived by the two fora were on appreciation of
evidence and we do not find any perversity in such finding. So,
the letter of 10th June 2013 cannot be treated as a valid offer
letter.
29. (i)   We,   accordingly,   hold   the   finding   of   the   National
Commission as also the State Commission that the allottee
would   be   required   to   pay   maintenance   charges   as
erroneous   and   that   part   of   the   findings   of   the   two
Commissions are set aside.  
(ii) The entity to whom such charge is due has not raised
any claim. In such circumstances, direction to the allottee
to   pay   maintenance   charges   was   not   warranted   as   the
entity entitled to receive such charges is not a party to
these proceedings. Such directions assume the character of
declaration   of   liability   or   obligation   of   the   allottee   in
absence of the admitted claimant, who had not brought any
action or staked their claim in any other manner through
29
these proceedings. Such declaratory relief cannot be given
in vacuum. 
(iii) We sustain the order of the National Commission as
also the State Commission that fresh offer of possession
ought to be issued. We extend the time for issuing such
offer of possession by a period of eight weeks from this
date.   Execution   of   Deed   shall   be   effected   within   the
aforesaid period.
(iv) We modify the direction of National Commission relating
to payment of delayed compensation and while restoring
the   directions   of   the   State   Commission,   we   direct   that
delayed   compensation   be   paid   at   the   rate   of   Rs.10   per
square feet per month for the entire period from March
2011 till the date on which the fresh offer of possession is
issued. 
(v) The delayed possession compensation shall be paid to
the   allottee   after   adjusting   the   delayed   compensation
already paid. The early payment rebate of Rs.95,136/­ shall
also   be  adjusted,  as has   been  directed  by the   National
30
Commission. The said sum was mentioned in the statement
of account dated 10th June 2013. 
(vi) We retain the order as to costs to be paid to the allottee
quantified by the National Commission as Rs.50,000/­. 
30. Both the appeals are disposed of in the above terms. We,
however,   make   it   clear   that   in   this   judgment,   we   have
addressed only the two questions on which leave is granted.
Rest of the findings or directions of the National Commission
shall remain undisturbed. 
31. Connected applications, if any, shall stand disposed of,
without any order as to costs. 
………………………………., J.
(DINESH MAHESHWARI)
………………………………., J.
(ANIRUDDHA BOSE)
NEW DELHI;
11th JULY 2022
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