National Consumer Commission Holds Raheja Developers Liable For Deficiency In Service

Contentions of the Complainant

The complainant booked an apartment with Raheja Developers by paying an initial deposit of Rs.43,34,884. They signed a floor buyer's agreement with the developer, who promised to give them the apartment for Rs.1,33,58,446, excluding service taxes and registration. The complainant made over half the payments in 16 installments on different dates. However, the developer did not provide possession of the flat within the agreed 36 months, as stated in the agreement's clause 4.2. The complainant believes the agreement was one-sided and given as is by the developer without any chance for them to make changes. Additionally, the developer did not compensate the complainant for the possession delay, as clause 4.2 of the agreement required. The complainant is before this Commission with the prayer to refund the entire amount paid against the cost of the apartment with an interest rate of 18% per annum, compensation of Rs.5.00 lakh for causing financial risk, hardship, mental agony, harassment, and emotional disturbance to the complainant along with pay Rs.75,000 as litigation costs.

Contentions of the Opposite Party

The developer argued that the buyers were told about the project conditions, including possible delays and the lack of infrastructure when they booked their homes and emphasized sections in the agreement that mentioned compensation for delays but clarified that no compensation would be given for delays caused by infrastructure issues. It was further argued that legal problems, contractor disagreements, and government shortcomings caused the project delays. They attributed the delays to buyers not making timely payments and the absence of necessary infrastructure in the area. It was contended that the delays, as mentioned in the contract, weren't considered a service problem or an unfair business practice. Hence, the complaint was a civil disagreement guided by the contract terms, not falling under the Consumer Protection Act. It was asserted that the complaint was filed six years after the contract was signed, making it time-barred. The developer insisted that the complaint was about a property sale agreement, not a service covered by the Consumer Protection Act. It was highlighted that only after the construction was finished could a property transfer deed be made, and a civil court should handle issues related to refunds after careful examination of the evidence.

Observations by the Commission

The commission observed that the complainant sought compensation due to a significant delay in receiving a residential unit from the developer. The promised construction period was 36 months with an additional six-month grace period, but the delay exceeded three years from the agreed possession date. Referring to a Supreme Court case of Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra(2019), the commission highlighted the unreasonableness of expecting the buyer to wait indefinitely for possession, especially when nearly seven years had passed since the agreement. Additionally, the commission referred to the Supreme Court judgment in Pioneer Urban Land & Infrastructure Ltd. vs. Govindan Raghavan (2018) to assert that a delay of more than three years is certainly inordinate and the complainant is therefore entitled to seek a refund with compensation in respect of the amount deposited by it with the retailer. The commission relied on Supertech Ltd. Vs. Rajni Goyal (2019) to emphasize that delay in the offer of possession amounts to a deficiency in service when there is no default concerning the payment of installment on the part of the home buyer. The commission observed that the developer clearly defaulted in its contractual obligations of completing the project, obtaining the occupancy certificate, offer possession of the flat within the time stipulated in the Agreement [or within a reasonable period thereafter]. The complainant cannot, therefore, be compelled to take possession of the said flat. Furthermore, the Supreme Court in M/s BPTP vs. Sanjay Rastogi(2021) has held that under such circumstances, the complainant is entitled to a full refund with interest.

The commission directed the developer to refund Rs.1,16,03,737 deposited by the complainant and compensation @ 9% per annum from the respective dates within eight weeks of this order, along with Rs. 50,000 as litigation costs.