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Compensation Should Be Both Compensatory And Restitutionary: NCDRC
Ayushi Rani
5 Sept 2024 7:17 PM IST
The National Consumer Disputes Redressal Commission, presided by Mr. Subhash Chandra and Dr. Sadhna Shanker, held that compensation should serve both to reimburse for losses and to restore what was lost, with 9% interest considered reasonable. Brief Facts of the Case The complainant had entered into two agreements with the developer and the landowners for purchasing a flat and a...
The National Consumer Disputes Redressal Commission, presided by Mr. Subhash Chandra and Dr. Sadhna Shanker, held that compensation should serve both to reimburse for losses and to restore what was lost, with 9% interest considered reasonable.
Brief Facts of the Case
The complainant had entered into two agreements with the developer and the landowners for purchasing a flat and a car parking space for a total of ₹28,05,000. Despite paying ₹25,25,000, including ₹25,000 for an electric meter, the complainant claimed the developer did not deliver the property in a habitable condition within the agreed time frame. Although the complainant was ready to pay the remaining ₹3,05,000, the developer failed to honour the contract, prompting the complainant to approach the State Commission of West Bengal with the complaint. The State Commission allowed the complaint and directed the developer to directed to pay compensation of Rs. 3,00,000 and litigation cost of Rs. 10,000. Dissatisfied by the State Commission's order the complainant appealed before the National Commission.
Contentions of the Opposite Party
The developer remained unrepresented, making the proceedings ex parte.
Observations by the National Commission
The National Commission observed that according to the Supreme Court in Fortune Infrastructure Vs Trevor D' Lima (2018), a buyer cannot be expected to wait indefinitely for possession and is entitled to a refund with compensation for unreasonable delays. In Kolkata West International City Pvt. Ltd. Vs Devasis Rudra (2019), the Court deemed a seven-year wait unreasonable and justified the refund orders due to delay. In the present case, with a delay of over nine years, the complainant sought various remedies, including correcting defects, a refund, and compensation. The developer's failure to provide possession despite receiving nearly 90% of the payment was deemed a clear deficiency in service. The complainant's requests for compensation, adjustments, and legal costs were considered reasonable, given the developer's substantial delay and lack of response. The Supreme Court in Experion Developers Pvt. Ltd. Vs Sushma Ashok Shiroor (2022) confirmed that compensation should be both compensatory and restitutionary, with 9% interest being fair.
The National Commission allowed the appeal and directed the developer to hand possession to the appellant within two months at no additional cost, along with compensation for the delay at a rate of 6% per annum. Additionally, the developer was directed to pay litigation costs of ₹1 lakh.
Case Title: Baibhab Sur Vs. Swapan Sengupt
Case Number: F.A. No. 263/2018
