Case Note & Summary
The Supreme Court dismissed appeals filed by Pioneer Urban Land & Infrastructure Ltd. against orders of the National Consumer Disputes Redressal Commission directing refund of amounts deposited by flat purchasers with interest. The builder had launched a residential project 'Araya Complex' in Gurugram and entered into Apartment Buyer's Agreements with respondents in 2012. The agreement required the builder to apply for occupancy certificate within 39 months from excavation (commenced 04.06.2012) plus a grace period of 180 days, i.e., by 04.03.2016. The builder failed to do so, and the flat purchasers filed consumer complaints in January 2017 seeking refund. During pendency, the builder obtained occupancy certificate on 23.07.2018 and offered possession, but the purchasers declined due to inordinate delay of almost 3 years. The National Commission allowed refund of Rs. 4,48,43,026 with interest @10.7% S.I. p.a. as per Rule 15 of Haryana Real Estate Rules, 2017, holding that one-sided clauses in the agreement were unfair and not binding. The builder appealed under Section 23 of the Consumer Protection Act, 1986, arguing that the agreement required termination notice and provided lower interest rates. The Supreme Court upheld the National Commission's order, finding no merit in the appeals. The Court noted that the builder's failure to apply for occupancy certificate within the stipulated time constituted deficiency of service, and the flat purchasers could not be compelled to take possession at a belated stage. The one-sided clauses in the agreement were held to be unfair and not binding. The rate of interest awarded was in accordance with statutory rules and was adequate compensation. The appeals were dismissed with no order as to costs.
Headnote
A) Consumer Law - Deficiency of Service - Refund with Interest - Builder failed to apply for Occupancy Certificate within stipulated 39 months plus grace period of 180 days, causing delay of almost 3 years - Flat purchaser sought refund - National Commission allowed refund with interest @10.7% S.I. p.a. under Rule 15 of Haryana Real Estate Rules, 2017 - Supreme Court upheld, holding that one-sided clauses in agreement are unfair and not binding (Paras 1-8). B) Contract Law - Unfair Contract Terms - One-sided clauses in Apartment Buyer's Agreement - Clauses 11.5 and 20 providing limited termination rights and low interest @6% or 9% p.a. held to be wholly one-sided and unfair - Such clauses cannot bind the flat purchaser who is entitled to refund with adequate compensation (Paras 4-8). C) Consumer Law - Compensation - Rate of Interest - National Commission awarded interest @10.7% S.I. p.a. as per Rule 15 of Haryana Real Estate Rules, 2017 - Supreme Court affirmed, rejecting builder's contention that interest should be as per agreement clauses @6% or 9% p.a. - Held that compensation must be adequate and not limited by unfair contractual terms (Paras 6-8).
Issue of Consideration
Whether a flat purchaser is entitled to refund with interest when the builder fails to deliver possession within the stipulated time, despite the builder obtaining occupancy certificate during pendency of complaint, and whether one-sided clauses in the agreement are binding.
Final Decision
The Supreme Court dismissed both civil appeals, upholding the National Commission's order directing refund of Rs. 4,48,43,026 with interest @10.7% S.I. p.a. as per Rule 15 of Haryana Real Estate Rules, 2017, and holding that one-sided clauses in the Apartment Buyer's Agreement are unfair and not binding. No order as to costs.
Law Points
- Consumer Protection Act
- 1986
- Section 23
- Unfair Contract Terms
- Deficiency of Service
- Refund with Interest
- Haryana Real Estate (Regulation and Development) Rules
- 2017
- Rule 15
