Case Note & Summary
The appellants, 46 home buyers, along with proforma respondents, filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC) against a builder for deficiency in service. They had booked flats in the builder's project 'Fiesta Homes by SJR Prime' and entered into a Construction Agreement dated 31.03.2012. Clause 6.1 of the agreement stipulated possession on or before March 2014 with a six-month grace period. However, possession was delayed by about four years, and there were also deficiencies in construction. The complainants sought compensation for delay, refund of illegally charged car parking fee, legal fee, and BESCOM/BWSSB charges, and construction of promised amenities. The NCDRC partially allowed the complaint, awarding delayed compensation at 6% per annum from a due date determined by a formula based on payment of the 11th instalment, and directed construction of a green jogging track and convenience store. The builder did not challenge the order. The complainants appealed to the Supreme Court, arguing that the NCDRC ignored a prior Supreme Court order (dated 11.08.2021) which had declared that the builder forfeited its right to file a written statement. Despite this, the NCDRC permitted the builder to introduce new facts through written submissions, which influenced the compensation formula. The Supreme Court found that the builder's written submissions indeed introduced new pleadings to resist the claims, violating the earlier order. The Court held that the NCDRC's formula for computing the due date of possession was arbitrary and not based on the agreement. The Court directed that the due date of possession be taken as September 2014 (as per the agreement) and enhanced the interest rate from 6% to 9% per annum on the deposit from that date till actual possession. The Court also remanded the issues of refund of car parking fee, legal fee, and BESCOM/BWSSB charges to the NCDRC for fresh adjudication, as they were not decided. The appeal was partly allowed.
Headnote
A) Consumer Law - Delayed Possession - Compensation - Interest Rate - Consumer Protection Act, 2019, Sections 38(3)(a), 72 - The Supreme Court held that the NCDRC's formula for computing due date of possession based on payment of 11th instalment was arbitrary and not supported by the construction agreement. The Court directed that the due date of possession be taken as September 2014 (as per agreement) and awarded interest at 9% per annum on the deposit from that date till actual possession, instead of 6% per annum. (Paras 8-12, 14-15) B) Consumer Law - Forfeiture of Right to File Written Statement - Introduction of New Facts - Consumer Protection Act, 2019, Section 38(3)(a) - The Supreme Court held that the builder, having forfeited its right to file written statement by order dated 11.08.2021, could not introduce new facts through written submissions to resist the complaint. The NCDRC erred in considering such submissions. (Paras 10-11, 13) C) Consumer Law - Unfair Trade Practice - Car Parking Fee, Legal Fee, BESCOM/BWSSB Charges - Consumer Protection Act, 2019, Section 2(47) - The Supreme Court remanded the issue of refund of illegally charged car parking fee, legal fee, and BESCOM/BWSSB charges to the NCDRC for fresh consideration, as the NCDRC had not adjudicated these claims. (Para 16)
Issue of Consideration
Whether the NCDRC erred in adopting a formula for computing delayed compensation and in awarding interest at 6% per annum, and whether the builder was permitted to introduce new facts through written submissions despite forfeiture of right to file written statement.
Final Decision
Appeal partly allowed. The Supreme Court set aside the NCDRC's formula for computing due date of possession and directed that the due date be September 2014. Interest on delayed possession enhanced from 6% to 9% per annum on the deposit from September 2014 till actual possession. Issues of refund of car parking fee, legal fee, and BESCOM/BWSSB charges remanded to NCDRC for fresh adjudication.
Law Points
- Consumer Protection Act
- 2019
- Section 38(3)(a)
- forfeiture of right to file written statement
- delayed possession compensation
- interest rate
- deficiency in service
- unfair trade practice
- construction agreement
- grace period
- occupancy certificate
- written submissions beyond pleadings
