Consumer Protection Act, 1986 – s.23 – Deficiency of service – Appellant-Builder launched a residential project and respondentflat purchaser entered into an Apartment Buyer’s agreement to purchase an apartment in the said project for a total sale consideration of Rs.4,83,25,280/- – As per agreement, the appellant was to apply for the occupancy certificate within 39 months from the date of excavation with grace period of 180 days – However, Appellant-builder failed to apply for occupancy certificate as per agreement – Consumer complaint filed before the National Commission – During the pendency of the proceedings, the appellant obtained the occupancy certificate and pleaded National Commission to direct the respondent to take possession of the flat – However, the respondent refused to take possession as there was an inordinate delay of almost 3 years – National Commission allowed the consumer complaint and held that respondent could not be compelled to take possession at such belated stage – Further, appellant was directed to refund Rs.4,48,43,026 i.e. the amount deposited by the respondent along with interest @ 10.7% S.I. p.a. towards compensation – On appeal, held: The respondent-flat purchaser made out a clear case of deficiency of service on the part of the appellant-builder – Appellant failed to fulfill his contractual obligation of obtaining the occupancy certificate and offering possession of the flat to the respondent within the time stipulated in the agreement, or within a reasonable time thereafter – Respondent was justified in terminating the Apartment Buyer’s Agreement by filing the Consumer Complaint, and cannot be compelled to accept the possession whenever it is offered by the Builder – Respondent was legally entitled to seek refund of the money deposited by him along with appropriate compensation – Respondent had to also service a loan that he had obtained for purchasing the flat by paying interest @10% to the Bank – In the circumstances, no illegality in the impugned order passed by the National Commission – Haryana Real Estate (Regulation And Development) Rules, 2017 – r.15.
Consumer Protection Act, 1986 – s.2(r) – Unfair and unreasonable apartment buyer’s agreement – Held: A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder – The contractual terms of the Buyer’s Agreement in the instant case was ex-facie one-sided, unfair and unreasonable – The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per s.2(r) of the Consumer Protection Act since it adopts unfair methods or practices for the purpose of selling the flats by the Builder. Dismissing the appeals, the Court
HELD: 1. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are exfacie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder. This Court has no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent-Flat Purchaser. The Appellant-Builder could not seek to bind the Respondent with such one-sided contractual terms. [Paras 6.7 and 7][1183-B-D]
2. In the present case, the National Commission has passed an equitable Order. The Commission has not awarded any Interest for the period during which the Order of stay of cancellation of the allotment was in operation on the request of the RespondentFlat Purchaser. The National Commission has rightly awarded Interest @10.7% S.I. p.a. by applying Rule 15 of the Haryana Real Estate (Regulation And Development) Rules, 2017 from the date of each installment till 05.02.2017 i.e. till the date after which the Order of stay of cancellation of the allotment was passed; and thereafter, from the date of the Commission’s final Order till the date on which the amount is refunded with Interest. [Para 8.1][1183-G-H; 1184-A-B]
3. There is no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The AppellantBuilder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent-Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent-Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent-Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent-Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent-Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest. [Para 9][1184-B-E]
Lucknow Development Authority v. M.K. Gupta (1994)
1 SCC 243 : [1993] 3 Suppl. SCR 615; Fortune
Infrastructure & Anr. v. Trevor D’Lima & Ors. (2018) 5 SCC 442: [2018] 3 SCR 273 ; Central Inland Water Transport Corporation Limited and Ors. v. Brojo Nath Ganguly and Ors. (1986) 3 SCC 156 : [1986] 2 SCR
278 – relied on.
Bharathi Knitting Company v. DHL Worldwide Express Courier Division of Airfreight Ltd. (1996) 4 SCC 704 : [1996] 2 Suppl. SCR 653 ; Bangalore Development Authority v. Syndicate Bank (2007) 6 SCC 711 : [2007] 7 SCR 47 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.