Case Note & Summary
The appeal arose from a judgment of the National Consumer Disputes Redressal Commission (NCDRC) dated 9 October 2014 in Consumer Complaint No. 112 of 2014. The appellant, M/s Lanco Hills Technology Park Pvt Ltd, was a developer who entered into an agreement to sell with the respondents, Manisha Balkrishna Kulkarni and another, on 21 March 2011 for the purchase of an apartment in Hyderabad. The total consideration was Rs 1,55,50,826, with an additional Rs 6,00,000 for parking. Possession was to be handed over by 28 March 2011 with a three-month grace period. However, on 28 March 2011, the State Waqf Tribunal issued a restraining order due to a land dispute, which was upheld by the High Court on 3 April 2012 and vacated by the Supreme Court on 8 May 2012. The appellant informed the respondents that the apartment would be ready by 3 November 2012, and after several communications, a sale deed was executed on 11 February 2013, recording that possession was handed over. However, the respondents claimed that possession was not actually given until 28 August 2014, when keys were handed over. The respondents filed a consumer complaint seeking possession, interest, and damages. The NCDRC directed the appellant to pay compensation at Rs 5 per sq ft for the first six months of delay and 18% per annum for the delay beyond six months. The Supreme Court partly allowed the appeal, holding that the force majeure event extended the possession period until 8 August 2012. For the delay from 8 August 2012 to 8 February 2013, contractual compensation at Rs 5 per sq ft was payable. For the period from 9 February 2013 to 28 August 2014, the Court found the 18% rate excessive and scaled it down to a lump sum of Rs 10 lakhs, computed at 6% per annum as a broad guideline. The appeal was partly allowed with no order as to costs.
Headnote
A) Consumer Law - Delay in Possession - Compensation - Force Majeure - Agreement to sell executed on 21 March 2011 for purchase of apartment - Possession due by 28 March 2011 with three months grace period - Force majeure event due to Waqf Tribunal injunction from 28 March 2011 to 8 May 2012 - Period extended accordingly - After injunction vacated, appellant had time until 8 August 2012 - For delay from 8 August 2012 to 8 February 2013, contractual compensation at Rs 5 per sq ft payable - For delay beyond 8 February 2013, no contractual provision - Sale deed executed on 11 February 2013 recorded possession handed over, but actual possession given on 28 August 2014 - Held that appellant liable to pay reasonable compensation for period 9 February 2013 to 28 August 2014 - NCDRC's 18% per annum interest scaled down to lump sum of Rs 10 lakhs (Paras 10-14). B) Consumer Law - Reasonable Compensation - Rate of Interest - Delay in possession beyond contractual period - No specific provision in agreement for delay beyond six months - NCDRC awarded 18% per annum - Supreme Court held 18% excessive and scaled down to 6% as broad guideline - Computed lump sum of Rs 10 lakhs to avoid dispute (Paras 13-14).
Issue of Consideration
Whether the appellant was liable to pay compensation for delay in handing over possession of the apartment beyond the contractual period, and whether the rate of 18% per annum awarded by NCDRC was excessive.
Final Decision
Appeal partly allowed. Appellant to pay compensation at Rs 5 per sq ft for period 8 August 2012 to 8 February 2013 as per agreement, and lump sum of Rs 10 lakhs for period 9 February 2013 to 28 August 2014, to be paid within one month. No order as to costs.
Law Points
- Force Majeure
- Compensation for Delay
- Consumer Protection
- Contractual Interpretation
- Reasonable Compensation
