Buyer Cannot Be Made To Wait Indefinitely For Possession : NCDRC Holds Lodha Construction Liable For Deficiency In Service

Brief Facts of the Case

The complainant entered into an agreement with Lodha Construction/ builder to purchase an apartment with three parking spaces for Rs. 1,54,51,349, payable in installments. The builder promised possession of the completed apartment by a specific date, with a six-month grace period. The complainant paid Rs. 30,90,217 as earnest money and subsequently paid a total of Rs. 1,46,78,926, leaving 5% of the amount to be paid upon possession. Despite this, the builder failed to deliver the apartment within the agreed timeframe or grace period. After issuing a legal notice and extended correspondence, possession was still not provided. The complainant filed a complaint before the State Commission of Telangana, which allowed the complaint. It directed the builder to pay interest on the amount paid by the complainant at 6% per annum from the end of the grace period until the complaint filing and 9% per annum thereafter until possession is delivered, along with Rs. 5,000 as litigation costs. Dissatisfied with the State Commission's order, the complainant filed an appeal before the National Commission.

Contentions of the builder

The builder disputed the complainant's claims, asserting that possession of the flat for fit-outs was offered and repeatedly requested, but the complainant delayed taking possession. This delay, the builder argued, indicated no urgent need for accommodation, and thus no actual loss was incurred. Compensation, the builder contended, should not exceed the date possession was first offered and is only payable for delays beyond the grace period. The complainant's own delay, they argued, cannot justify further compensation. The builder also argued that liquidated damages set an upper limit for reasonable compensation, and no evidence was provided to support the complainant's claims of damages or loss. Citing legal precedents, the builder maintained that the awarded interest rate of 6% per annum for the delay was fair and that excessive damages should be avoided to ensure balanced compensation.

Observations by the National Commission

The National Commission observed that the builder's delay in handing over possession of the flat constituted a deficiency in service, as the complainant had paid 95% of the sale consideration with an expectation of timely delivery. Referring to cases like Kolkata West International City Pvt. Ltd. vs. Devasis Rudra and Wing Commander Arifur Rahman Khan vs. DLF Southern Homes Pvt. Ltd., the Commission emphasized that buyers cannot be expected to wait indefinitely and are entitled to reasonable compensation for delays. The National Commission allowed the revision petition and concluded that the interest rate of 6% per annum, from the promised possession date until actual possession, was fair and commensurate with the complainant's loss. The State Commission's order was modified accordingly, while the awarded cost of ₹5,000 was upheld.

Case Title: Mallela Muralidhar Vs. M/S. Lodha Healthy Construction & builders Pvt. Ltd. & Anr

Case Number: F.A. No. 2326/2017

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