Delay In Delivery Of Flat, Continuing Grounds For Legal Action: NCDRC Holds Emaar MGF Land Liable
The National Consumer Disputes Redressal Commission, presided by Mr. Subhash Chandra and Dr. Sadhna Shanker (member), held that the failure to deliver possession of a flat on the agreed timeline does not constitute a one-time breach but rather an ongoing violation that continues with each passing day. As such, it represents a continuing cause of action that allows the buyer to pursue...
The National Consumer Disputes Redressal Commission, presided by Mr. Subhash Chandra and Dr. Sadhna Shanker (member), held that the failure to deliver possession of a flat on the agreed timeline does not constitute a one-time breach but rather an ongoing violation that continues with each passing day. As such, it represents a continuing cause of action that allows the buyer to pursue legal remedies until the possession is finally handed over.
Brief Facts of the Case
The original allottee applied to book an apartment for Rs. 65,15,280 from Emaaar MGF/builder. The builder allotted the apartment to the original allottee, who later requested to change the unit and transfer the deposited amount to the new unit and the title to the complainant. The allotment was relocated, and the Buyer's agreement was executed between the builder and the complainant. The possession of the flat was to be handed over within 30 months from the start of construction, with compensation for delay included, but the builder failed to deliver within the stipulated period. The complainant stated that the sale consideration was enhanced, indicating a service deficiency on the builder's part. The complainant filed a complaint before the State Commission of Haryana, which allowed the complaint and directed the builder to pay the interest at the rate of 9% on the amount paid by the complainant, along with Rs. 21,000/- as litigation charges. Aggrieved by the State Commission's order, the builder appealed before the National Commission.
Contentions of the Builder
The builder responded to the complaint by submitting a written statement, initially objecting that the complainant does not qualify as a 'consumer' under the Act and that the complaint is beyond the pecuniary jurisdiction of the State Commission. Additionally, it was asserted that the complainant had not adhered to the payment schedule, and due to this, they are not entitled to compensation, thus arguing there is no deficiency on the builder's part.
Observations by the National Commission
The National Commission observed that, based on legal precedents like Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Kishan Estate Developers Pvt. Ltd., the complainant, fits the definition of a 'consumer' under the Act. This conclusion was drawn after considering the circumstances of the case and the lack of evidence from the builder supporting their claim that the flat was purchased for commercial purposes. Regarding the buyer's agreement, which stipulated a 30-month delivery period from the start of construction, the commission referred to the ruling in Meerut Development Authority Vs. Mukesh Kumar Gupta, highlighting that the failure to deliver possession constitutes a continuous cause of action. Regarding interest rates, the commission referred to the Supreme Court's decision in DLF Home Developers Ltd. v. Capital Greens Flat Buyers Assn. This case law informed the commission's decision to modify the interest rate, considering the substantial delay in possession and the unique real estate market conditions. Consequently, the commission modified the State Commission's order and directed the builder to pay compensation in the form of interest at the rate of 6% per annum on the deposited amount from the promised date of possession until the date of the offer, along with Rs. 21,000 as litigation costs.
Case Title: M/S. Emaar MGF Land Ltd Vs. Surinder Kumar Punchhi
Case Number: F.A. No. 1072/2019