Case Note & Summary
The dispute arose from a consumer complaint filed by the purchaser against the builder for delayed possession of a residential flat. The original allottee, Ms. Madhabi Venkatraman, applied for the flat in 2012 with possession promised by 15.10.2015. She paid instalments totalling ₹1,55,89,329. In 2015, due to slow construction, she decided to sell the flat to the purchaser, who paid an advance and later entered into a sale agreement in 2016, paying ₹1,85,00,000. The builder confirmed receipt of ₹1,93,70,883 and transferred the flat to the purchaser. However, possession was not delivered as promised, with the builder citing delays due to an NGT order and environmental notifications as force majeure. The purchaser sought a refund of the amount paid with interest at 24% per annum, compensation, and costs, leading to a complaint before the NCDRC. The builder denied liability, arguing that the delay was beyond its control and that the purchaser, as a subsequent transferee, was not entitled to interest. The NCDRC allowed the complaint in part, directing a refund with interest at 10% per annum from the respective deposit dates, citing that purchasers cannot be made to wait indefinitely for possession. The builder appealed to the Supreme Court, challenging the interest award and arguing that the purchaser was not entitled to interest as a subsequent purchaser. The Supreme Court considered the arguments, including precedents on subsequent purchasers' rights, and upheld the NCDRC's order, emphasizing the builder's failure to deliver possession and the purchaser's entitlement to relief despite being a subsequent transferee. The decision affirmed the refund with interest, rejecting the builder's force majeure defense and supporting consumer protection principles against indefinite delays in housing projects.
Headnote
A) Consumer Law - Delay in Possession - Refund with Interest - Consumer Protection Act, 1986 - The purchaser sought refund of consideration paid for a flat due to delayed possession beyond the promised date of 15.10.2015, with interest at 24% per annum - NCDRC allowed the complaint in part, directing refund with interest at 10% per annum from respective deposit dates, citing that a flat purchaser cannot be made to wait indefinitely for possession as per precedent - Held that the builder's failure to deliver possession justified the refund order, rejecting force majeure claims as insufficient to absolve liability (Paras 1-8, 20-22). B) Consumer Law - Subsequent Purchaser's Rights - Interest Entitlement - Consumer Protection Act, 1986 - Builder argued that a subsequent purchaser, who steps into the shoes of the original allottee, is not entitled to claim interest for the entire period from the original deposits, citing precedents like HUDA v. Raje Ram and Wing Commander Arifur Rahman Khan v. DLF Southern Homes Pvt. Ltd. - Court considered whether the purchaser, as a subsequent transferee, could claim equities to the same extent as the original allottee, especially regarding interest - Held that the NCDRC's direction for interest from deposit dates was upheld, as the purchaser's rights were endorsed by the builder and delay persisted beyond the transfer (Paras 9-13).
Issue of Consideration
Whether the National Consumer Dispute Redressal Commission (NCDRC) was justified in allowing the complaint and directing the builder to refund the amount deposited with interest at 10% per annum, and whether a subsequent purchaser is entitled to claim interest for the entire period from the date of deposit by the original allottee.
Final Decision
Supreme Court upheld the NCDRC order, dismissing the builder's appeal and directing refund of the amount deposited with interest at 10% per annum from respective deposit dates till realisation, along with costs of ₹25,000
Law Points
- Consumer protection
- delay in possession
- refund with interest
- subsequent purchaser's rights
- force majeure
- waiver of compensation
