Case Note & Summary
The Supreme Court partly allowed the appeal by M/s Treaty Construction & Anr. against the order of the National Consumer Disputes Redressal Commission. The dispute arose from a housing project where the respondent-society, Ruby Tower Co-op. Hsg. Society Ltd., alleged deficiency in service by the builders for failing to complete construction, obtain Occupancy Certificate, and convey title. The society had paid additional sums for possession and interior works. During proceedings, the society restricted its claim to Rs. 25,00,000/- based on a settlement agreement dated 17.12.2003. The State Commission directed refund of Rs. 26,25,000/- with interest and conveyance of title. The National Commission enhanced the amount to Rs. 28,00,000/- and imposed daily penalty. The Supreme Court held that the National Commission erred in enhancing the amount beyond the agreed settlement of Rs. 25,00,000/- and modified the order to reflect the settlement amount with interest at 8% per annum from the date of the National Commission's order. The court upheld the direction for conveyance of title after obtaining Occupancy Certificate and modified the daily penalty to apply only if the builder fails to obtain the certificate within a reasonable time. The appeal was partly allowed, setting aside the enhanced compensation.
Headnote
A) Consumer Law - Deficiency in Service - Settlement Agreement - The dispute pertained to alleged deficiency in service by builders in completing construction and obtaining Occupancy Certificate. The court considered the binding nature of a settlement agreement between the parties for Rs. 25,00,000/- as full and final settlement. Held that the National Commission erred in enhancing the amount beyond the agreed settlement without proper justification (Paras 3.4-3.7). B) Consumer Law - Unfair Trade Practice - Additional Charges - The builders collected Rs. 26,25,000/- as possession charges beyond the agreed sale consideration. The State Commission directed refund with interest. The Supreme Court upheld this direction, noting the lack of contractual basis for such charges (Paras 3.5-3.6). C) Property Law - Conveyance of Title - Obligation to Execute Deed - Under MOFA, the builder is obligated to convey title to the society after obtaining Occupancy Certificate. The court directed the appellants to execute a registered deed of conveyance within 4 months after obtaining Occupancy Certificate, as per the State Commission's order (Paras 2, 3.6). D) Consumer Law - Compensation - Delay in Obtaining Occupancy Certificate - The National Commission imposed a penalty of Rs. 1,000/- per day for delay beyond 60 days. The Supreme Court modified this to apply only if the builder fails to obtain Occupancy Certificate within a reasonable time, aligning with the settlement terms (Paras 2, 3.4).
Issue of Consideration
Whether the National Commission was justified in directing the appellants to pay Rs. 28,00,000/- and Rs. 1,000/- per day, and to convey title, given the settlement agreement for Rs. 25,00,000/- and the respondent's concession not to press certain claims.
Final Decision
Appeal partly allowed. The National Commission's order modified: Appellants to pay Rs. 25,00,000/- with interest at 8% per annum from the date of National Commission's order if not paid within 45 days. Direction to pay Rs. 1,000/- per day after 60 days set aside. Appellants to convey title within 4 months after obtaining occupancy certificate. Costs of Rs. 50,000/- upheld.
Law Points
- Deficiency in service
- Unfair trade practice
- Settlement agreement binding
- Interest on delayed payment
- Conveyance of title
- Occupancy Certificate
