Case Note & Summary
The appellant, Dharmendra Sharma, applied for allotment of a flat in a project by the Agra Development Authority (ADA) in 2011 and paid the full price. Possession was to be given within six months. After several demands and delays, the ADA offered possession in 2014 but without providing completion certificate or firefighting clearance. The appellant found deficiencies and did not take possession. The ADA continued to demand additional amounts, which the appellant paid in 2019. The appellant filed a complaint before the NCDRC in 2020 seeking refund with interest. The NCDRC partly allowed the complaint, ordering refund of the amount deposited (except stamp paper) with interest at 9% p.a. from the date of complaint. Both parties appealed. The Supreme Court held that the offer of possession without completion certificate was invalid, and the appellant was entitled to refund with interest from the date of deposit. The Court also rejected the ADA's objections on limitation and pecuniary jurisdiction, noting that the ADA's continued demands and acceptance of payments constituted a continuing cause of action, and the claim value exceeded Rs. 1 crore. The Court allowed the appellant's appeals and dismissed the ADA's appeal, directing refund with interest from the respective dates of deposit.
Headnote
A) Consumer Law - Deficiency in Service - Offer of Possession Without Completion Certificate - The developer's offer of possession without obtaining completion certificate and firefighting clearance certificate is invalid and does not constitute a valid offer, entitling the allottee to refund with interest from the date of deposit (Paras 13-15). B) Consumer Law - Limitation - Continuing Cause of Action - Where the developer continues to demand payments and accepts payments after the alleged offer of possession, the complaint is not barred by limitation as there is a continuing cause of action (Paras 8, 13). C) Consumer Law - Pecuniary Jurisdiction - Claim Value - The pecuniary jurisdiction of the NCDRC is determined by the value of the claim made in the complaint, which in this case exceeded Rs. 1 crore, and thus the NCDRC had jurisdiction (Paras 8, 11). D) Consumer Law - Interest - Refund - In cases of delayed possession due to invalid offer, the allottee is entitled to interest on the refunded amount from the date of deposit of the amount, not from the date of filing the complaint (Paras 15-16).
Issue of Consideration
Whether the offer of possession made by the developer without obtaining completion certificate and firefighting clearance certificate is valid; whether the complaint is barred by limitation; whether the NCDRC had pecuniary jurisdiction; whether the appellant is entitled to interest from the date of deposit or from the date of complaint.
Final Decision
The Supreme Court allowed the appeals filed by the appellant (Dharmendra Sharma) and dismissed the appeal filed by the Agra Development Authority. The Court set aside the NCDRC's order to the extent it granted interest from the date of complaint and directed that the appellant is entitled to refund of the entire amount deposited (including the non-judicial stamp paper amount of Rs. 3,99,100/-) with interest at 9% p.a. from the respective dates of deposit until the date of refund, to be paid within two months.
Law Points
- Offer of possession without completion certificate is invalid
- Consumer Protection Act
- 1986
- Limitation not applicable when developer continues to demand payment
- Pecuniary jurisdiction determined by claim value
- Interest from date of deposit for delayed possession
