Sahara City Homes Ltd vs Colonel Ajit Singh

Avm J. Rajendra, Avsm Vsm (Retd.), Presiding Member

The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) against the Order dated 16.05.2018 passed by the learned State Consumer Disputes Redressal Commission, Uttar Pradesh, (hereinafter to be referred as “the State Commission”), in Consumer Complaint No.170 of 2015, wherein the Complaint filed by the Complainant Late Colonel Ajit Singh (Since deceased) was allowed. The operative portion of impugned Order dated 16.05.2018 is reproduced as below:

“The complaint is allowed and the OP is directed to handover possession of the house in question to the complainant, to pay Rs.10 lacs for physical and mental harassment caused to the complainant and interest @9%p.a. on the amount of Rs.42,31,880.00 from the date when the house was to be delivered i.e. from 14.11.2010 till the actual delivery of possession of the house and Rs.10,000.00 as cost of the case.

Compliance of this order be made within one month otherwise, the OP shall be liable to pay interest @12% p.a. on the entire amount.”

Being aggrieved, the Opposite Party filed the instant Appeal along with IA/19268/2019, an application for condonation for delay of 114 days in filing this First Appeal. However, according to the registry there was a delay of 105 days. For the reason stated in the Application, the delay is condoned.

The admitted facts of the case are that the Late Col. Ajit Singh (Complainant) entered into an agreement to purchase an Independent Row house from the Appellant (OP) for a total price of Rs.51,74,000/- payable in 38 monthly instalments until 14.11.2010. The Allotment Letter dated 14.09.2007, stipulated that possession of the house would be handed over within 38 months, i.e., by 14.11.2010. Additionally, the Complainant was granted a 30% discount on the cost price due to being physically handicapped. Thus, the net amount payable was Rs.36,21,800/-. The Complainant alleged that the Appellant failed to deliver possession of the house within the agreed-upon time. As a result, he filed a consumer complaint with the State Commission, sought possession of the house, along with compensation and interest at a rate of @18%, among other remedies.

During the hearing of the matter on 30.11.2018, the learned Counsel for the Appellant, on instructions, submitted that the Appellant shall comply with the direction of the learned State Commission requiring the Appellant to handover possession of the house in question to the Complainant, within one month. The learned Counsel for the Appellant also sought that the only issue which would be contested in the present Appeal would be limited to the following: -

“to pay Rs. 10 lacs for physical and mental harassment caused to the complainant and interest @9% p.a. on the amount of Rs.42,31,880.00 from the date when the house was to be delivered i.e., from 14.11.2010 till the actual delivery of possession of the house and Rs.10,000.00 as cost of the case.”

The Learned Counsel for the Appellant/OP argued that the Appellant offered the possession of the said unit vide letter dated 06.07.2013 to the Respondent. However, the Respondent failed to take possession due to the non-payment of the dues towards the maintenance and other charges. Subsequently, the Appellant found it unfeasible to transfer possession due to the emergence of force majeure circumstances. These circumstances included restrictions imposed by the Hon’ble Supreme Court, as detailed in Contempt Petitions No. 412 and 413 of 2012. In addition, the Appellant, vide letter dated 16.04.2014, had waived the one-time maintenance fee of Rs.5,38,056/-. The offer for possession on 16.04.2014 was made conditional on the Respondent making payments of Rs.46,338/- solely towards the statutory dues. Regrettably, the Respondent failed to make this payment. Therefore, the Order of Hon’ble State Commission is liable to be set aside and the present appeal deserves to be allowed.

The learned Counsel for the Complainant/Respondent argued that the NCDRC vide Order dated 30.11.2018, explicitly directed the Appellant/OP to transfer possession of the residential unit within one month i.e. by 31.12.2018. Additionally, the Commission had stayed on the remaining portion of the compensation awarded, with the condition that this stay order shall stand vacated if possession was not delivered within the stipulated one-month period. However, the Appellant ultimately handed over possession of the residential unit on 13.05.2019, thereby breaching the directive by a considerable delay of more than four months and 12 days. As a result of this delay, the stay order was deemed vacated, as per the Commission's earlier directions. He further argued that it was the Appellant who failed to deliver the possession within the promised period of 38 months. After the year 2010 the Appellant kept silent and did not handover the possession till the letters dated 06.07.2013 and 16.04.2014 were forwarded after passing over 31 months from the promised period of 38 months. The Respondent/Complainant has been harassed for about nine years from 2010 to 2019 by not handing over the possession. Therefore, the Appellant is liable to compensate the Respondent as per the judgement of Hon’ble State Commission.

I have examined the pleadings placed on record and the associated documents, and gave careful consideration to the arguments advanced by the learned Counsels for both the parties.

The Appellant had sought and complied with the Order of the learned State Commission and handed over the possession of the house to the Respondent on 13.05.2019. The issue remaining pertains to whether the compensation awarded by the State Commission, as outlined in Para 4 above is appropriate.

While there are a number of landmark judgments of the Hon'ble Supreme Court holding Builders responsible for delay compensation in case of delay in handing over the possession, the issue to be also decided in this case is what would be the reasonable quantum of interest that should be paid. In this regard, I would like to quote the recent judgment of the Hon'ble Supreme Court in the case of DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Assn., (2021) 5 SCC 537, wherein it was held as:

"It is true that in the present case, the contractual rate of Rs.10 per square foot per month is double the rate fixed in the agreements Page 10 of 13 of FA No.225 of 2020 in the above case. On the other hand, the court must be conscious of the fact that the situation in the real estate market in Delhi is very distinct from that in Bengaluru both in terms of rentals and land values. This has not been disputed. The flat buyers had to suffer on account of a substantial delay on the part of the appellants. In such a situation, they cannot be constrained to the compensation of Rs.10 per square foot provided by the agreements for flat purchase. However, having regard to all the facts and circumstances, we are of the view that the compensation on account of delay should be brought down from 7% to 6%. Moreover, the amount, if any, which has been paid in terms of the contractual rate shall be adjusted while computing the balance"

It has also been held by the Hon’ble Supreme Court in the case of DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, in CA Nos. 4910-4941 of 2019 decided on 10.05.2019 that multiple compensations for singular deficiency is not justifiable. Therefore, the award of Compensation of Rs.10,00,000/- given by the State Commission is found to be not tenable.

In view of the above, the house in question has already been handed over to the Complainant/Respondent on 13.05.2019, the Appeal is partly allowed and the order of the learned State Commission, Lucknow dated 16.05.2018 in Complaint No. 170 of 2015 is modified with the following directions: -

ORDER

I. The Appellant is directed to pay delay compensation to the Respondents in the form of interest @ 6% per annum on the cost of the house deposited by the Complainant i.e. Rs. 42,31,880/- from the date when the house was to be delivered i.e. from 14.11.2010 to 12.05.2019, as the house was delivered 13.05.2019. The above payments shall be made within one month from the date of this order. In the event of delay in payment beyond one month, the interest applicable shall be @ 9% per annum for such extended period till the realization of the entire amount.

II. The order as regards payment of Rs. 10 Lakhs as compensation is set aside.

III. The Appellant is also directed to pay a cost of litigation of Rs.10,000/- to the Respondents.

All pending Applications, if any, are disposed of accordingly.

Registry is directed to release the statutory deposit amount, if any, to the Appellant on due compliance of the above order.