Case Note & Summary
The case involves an appeal by Appellants against the judgment of the National Consumer Disputes Redressal Commission (NCDRC) which allowed the complaint of the respondents, seeking refund of the amount paid for a residential villa. The respondents had booked a villa named Emerald-07 in the project 'Marvel Selva Ridge Estate' for a total consideration of Rs.8,31,04,425/-. An agreement was executed on 22.03.2013, which stipulated that possession would be handed over by 31.12.2014. The respondents paid Rs.8.14 crores between July 2012 and November 2013. However, the appellants failed to deliver possession by the due date. The appellants contended that the respondents suggested extra work in April 2014 and that stop work notices were issued by the Pune Municipal Corporation. The NCDRC found that the extra work could have been completed within three months and that the stop work notices were not the respondents' responsibility. The Commission directed refund of the principal amount of Rs.8.14 crores with simple interest at 10% per annum from the date of each payment till refund, along with litigation costs of Rs.25,000/-. The appellants' application for extension of time to comply was rejected. In the Supreme Court, the appellants argued that the villa was ready and a completion certificate would be obtained. However, the respondents asserted that the villa was still incomplete. The Supreme Court observed that the facts clearly indicated total failure on the part of the appellants and deficiency in service. Even assuming the villa was now ready, the delay of almost five years was crucial and the bargain could not be imposed on the respondents. The Court upheld the NCDRC's order and further directed that the villa shall not be sold or third-party rights created until the decree is satisfied, and the villa shall remain under attachment. The appeals were dismissed with no order as to costs.
Headnote
A) Consumer Law - Deficiency in Service - Refund with Interest - Section 23, Consumer Protection Act, 1986 - Builder failed to deliver possession of villa by agreed date of 31.12.2014 despite receiving substantial payment - Commission ordered refund of principal amount with 10% simple interest - Supreme Court upheld the order, noting that even if villa was now ready, delay of almost five years was crucial and bargain could not be imposed on buyers - Held that the findings of deficiency in service were correct and no interference was required (Paras 10-12).
Issue of Consideration
Whether the National Consumer Disputes Redressal Commission was correct in ordering refund of the amount paid by the respondents with interest due to delay in delivery of possession of the villa by the appellants.
Final Decision
The Supreme Court dismissed the appeals with no order as to costs. It upheld the NCDRC's order directing refund of Rs.8.14 crores with simple interest at 10% per annum from the date of each payment till refund, and litigation costs of Rs.25,000/-. Additionally, the Court directed that the villa shall not be sold nor any third-party rights created until the decree is completely satisfied, and the villa shall remain under attachment.
Law Points
- Deficiency in service
- Unfair trade practice
- Refund with interest
- Consumer Protection Act
- 1986
- Section 23
Case Details
2019 lawtext (SC) (7) 118
Civil Appeal Nos. 3207-3208 of 2019
Uday Umesh Lalit J. , Vineet Saran J.
Marvel Omega Builders Pvt. Ltd. and Anr.
Shrihari Gokhale and Anr.
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Nature of Litigation
Appeal under Section 23 of the Consumer Protection Act, 1986 against the judgment and order of the National Consumer Disputes Redressal Commission directing refund of amount paid for a residential villa with interest.
Remedy Sought
The respondents sought refund of the principal amount of Rs.8.14 crores paid towards purchase of villa along with compensation in the form of interest at 18% per annum and litigation costs.
Filing Reason
The appellants failed to deliver possession of the villa by the agreed date of 31.12.2014 despite receiving substantial payment.
Previous Decisions
The National Consumer Disputes Redressal Commission allowed the complaint and directed refund of Rs.8.14 crores with simple interest at 10% per annum and litigation costs of Rs.25,000/-. The appellants' application for extension of time to comply was rejected.
Issues
Whether the National Consumer Disputes Redressal Commission was correct in ordering refund of the amount paid by the respondents with interest due to delay in delivery of possession of the villa by the appellants.
Submissions/Arguments
The appellants argued that the villa was ready in all respects and a completion certificate would be obtained within 21 days.
The respondents asserted that the villa was still incomplete and that even after five years from the revised commitment, the villa was not ready.
Ratio Decidendi
The builder's failure to deliver possession of the villa by the agreed date despite receiving substantial payment constitutes deficiency in service. Even if the villa is now ready, the delay of almost five years is crucial and the bargain cannot be imposed upon the buyers. The buyers are entitled to refund of the amount paid with reasonable interest.
Judgment Excerpts
The facts on record clearly indicate that as against the total consideration of Rs.8.31 crores, the Respondents had paid Rs.8.14 crores by November, 2013. Though the Appellants had undertaken to complete the villa by 31.12.2014, they failed to discharge the obligation.
Even assuming that the villa is now ready for occupation (as asserted by the Appellants), the delay of almost five years is a crucial factor and the bargain cannot now be imposed upon the Respondents.
The residential villa ... shall not be sold nor any third party rights can be created by the Appellants in respect of said villa till the decree in favour of the Respondents is completely satisfied and so long as the decree remains to be satisfied, said villa shall be under attachment.
Procedural History
The respondents filed Consumer Case No.2010 of 2016 before the National Consumer Disputes Redressal Commission seeking refund. The Commission allowed the complaint on 31.05.2018. The appellants filed Miscellaneous Application No.578 of 2018 seeking extension of time to comply, which was rejected on 05.09.2018. The appellants then filed Civil Appeal Nos. 3207-3208 of 2019 before the Supreme Court under Section 23 of the Consumer Protection Act, 1986, which were dismissed on 30.07.2019.
Acts & Sections
- Consumer Protection Act, 1986: Section 23
