Case Note & Summary
The appeals arose under Section 23 of the Consumer Protection Act, 1986 from the decision of the National Consumer Disputes Redressal Commission on complaints by allottees against the developer regarding its housing project in Gurgaon, Haryana. The lead appeal involved the first respondent, who booked an apartment in 2010, entered into an Apartment Buyers Agreement in 2012, and filed a consumer complaint in 2017 due to delayed possession. The complaint sought possession within six months or a refund with interest. The developer issued a possession notice in 2017, but the apartment was found incomplete and uninhabitable. The NCDRC, in its judgment dated 1 November 2021, held the first respondent was a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986 and ordered a refund of Rs 2,23,91,480 with simple interest at 10.25% per annum, based on the Real Estate (Regulation and Development) Act, 2016 interest rates. The legal issue centered on whether the possession delivery period under Clause 13.3 of the Apartment Buyers Agreement should be calculated from the date of Fire NOC grant. The developer argued the Building Plan required Fire NOC, received in 2013, so the possession date should be September 2017. The first respondent contended possession was promised earlier, and construction had commenced before the Fire NOC. The court analyzed previous decisions, including Siddharth Vasisht v. IREO Pvt. Ltd. and Shamshul Hoda Khan v. IREO Victory Valley Pvt. Ltd., where it was held that the Haryana Fire Service Act, 2009 does not prohibit construction before Fire NOC if the Building Approval lacks such a condition, and since the developer began construction before receiving the Fire NOC, the possession period could not start from the Fire NOC date. The court upheld the NCDRC's reasoning, dismissing the developer's appeal and affirming the refund order with interest, based on the factual commencement of construction and statutory interpretation.
Headnote
A) Consumer Law - Consumer Definition - Section 2(1)(d) Consumer Protection Act, 1986 - First respondent was held to be a consumer as the developer did not prove the respondent was indulging in the business of buying/selling apartments, thus falling within the Act's definition for protection (Paras 11). B) Consumer Law - Delayed Possession and Refund - Real Estate (Regulation and Development) Act, 2016 - The National Consumer Disputes Redressal Commission ordered a refund of Rs 2,23,91,480 with simple interest at 10.25% per annum, applying the interest rate under the Real Estate (Regulation and Development) Act, 2016 in Haryana for cases of developer delay in handing over possession (Paras 11). C) Contract Law - Apartment Buyers Agreement Interpretation - Clause 13.3 - The developer argued possession delivery period should start from Fire NOC date, but the court rejected this as construction commenced before Fire NOC was granted, making the contractual date for possession based on actual construction start, not Fire NOC receipt (Paras 12-13). D) Statutory Law - Fire Safety Compliance - Haryana Fire Service Act, 2009 - The Act does not prohibit commencement of construction on a housing project after Building Approval is sanctioned and pending a Fire NOC if the Building Approval does not contain such a condition, as held in previous cases relied upon by the court (Paras 12-13).
Issue of Consideration
Whether the developer was justified in calculating the possession delivery period from the date of Fire NOC grant under Clause 13.3 of the Apartment Buyers Agreement, and whether the National Consumer Disputes Redressal Commission's order for refund with interest was correct.
Final Decision
Supreme Court dismissed the appeal, upholding the NCDRC's order for refund of Rs 2,23,91,480 with simple interest at 10.25% per annum
Law Points
- Consumer Protection Act
- 1986
- Section 2(1)(d) defines consumer
- Real Estate (Regulation and Development) Act
- 2016 interest rates apply for refunds
- Apartment Buyers Agreement clauses interpreted in light of factual commencement of construction
- Haryana Fire Service Act
- 2009 does not prohibit construction before Fire NOC if Building Approval lacks such condition
