Flat Buyer Cannot Be Made To Wait Indefinitely For Possession, NCDRC Holds Ansal Properties And Infrastructure Ltd. Liable For Delay

Brief Facts:

The Complainant booked a residential flat in Ansal Properties and Infrastructure Ltd.'s project 'Celebrity Meadows' located in Sushant Golf City, Sultanpur Road, Lucknow. The flat was priced at Rs. 1794.50/- per square foot, totalling Rs. 35,35,165/-. The Complainant paid a booking amount of Rs. 1,82,000/-, and an allotment letter dated 20.10.2010 was issued by Ansal Properties. As per clause 13 of the allotment letter, possession was promised within 36 months from the date of sanction of building plans by the concerned authorities, subject to force majeure circumstances and receipt of complete payment.

From 12.10.2010 to 26.10.2015, the Complainant deposited Rs. 32,38,255/- with Ansal Properties. The possession was expected by 20.10.2013 but was not handed over. Following a demand letter dated 21.02.2015, the Complainant paid Rs. 1,76,987/- for a change in the flat's area. Another demand for Rs. 3,50,364.50/- was made via a letter dated 08.10.2015. Feeling aggrieved, the Complainant filed a consumer complaint in the State Consumer Disputes Redressal Commission, Uttar Pradesh (“State Commission”).

The State Commission allowed the complaint and directed Ansal Properties to complete the flat's construction and hand over possession within three months after receiving the balance amount and executing the required documents. It was also directed to pay Rs. 10,000/- as litigation costs to the Complainant. Aggrieved by the order, the Complainant filed an appeal before the NCDRC for enhancement of compensation. Ansal Properties also filed an appeal before the NCDRC for setting aside the State Commission's order.

Observations by the NCDRC:

The NCDRC observed that Ansal Properties failed to complete the project within the promised timeline, resulting in a delay of over ten years. During the arguments, Ansal Properties admitted that the project was still incomplete and lacked the necessary occupancy or completion certificates from the concerned authorities. It also contended that the State Commission did not fully appreciate that Ansal Properties was not in a position to complete the project and offer possession to the Complainant.

The NCDRC referred to several judgments from the Supreme Court. In Pioneer Urban Land and Infrastructure Ltd. vs. Geetu Gidwani Verma & Anr. [Civil Appeal No. 12238 of 2018 with No. 1677 of 2019] and Pioneer Urban Land and Infrastructure Ltd. vs. Govindan Raghavan [Civil Appeal No. 12238 of 2018], it was held that a buyer cannot be compelled to take possession when there is a delay in delivery by the builder, and the buyer is entitled to a refund with compensation or interest for the delay. In Fortune Infrastructure & Anr. vs. Trevor D'Lima & Ors. [(2018) 5 SCC 442], it was established that a person cannot be made to wait indefinitely for possession and is entitled to seek a refund with compensation. The same principle was upheld in Kolkata West International City Pvt. Ltd. vs. Devasis Rudra [Civil Appeal No. 3182 of 2019] and Bangalore Development Authority vs. Syndicate Bank [(2007) 6 SCC 711], where it was reiterated that the allottee is entitled to a refund with reasonable interest when possession is not delivered within the specified time.

The NCDRC also addressed the Ansal Properties' argument that the delay was due to force majeure factors. This argument was unsupported by evidence and was therefore rejected. Additionally, Ansal Properties' reliance on an order from the NCLT under Section 14 of the Insolvency and Bankruptcy Code (IBC) was found irrelevant as it pertained to a different project.

The State Commission had directed Ansal Properties to complete the construction and hand over possession, failing which interest at 10% or 15% per annum would be applicable. Given the current status of the project and the prolonged delay, the NCDRC found that refunding the amounts deposited by the Complainant was the only viable solution. The Supreme Court in Experion Developers Pvt. Ltd. vs. Sushma Ashok Shiroor [C.A. No. 6044 of 2019], held that compensation in cases of refund should be both compensatory and restitutionary, and interest at 9% per annum was deemed fair and just. The Complainant's claim for rent paid was dismissed due to lack of evidence, consistent with the Supreme Court's ruling in DLF Homes Panchkula Pvt. Ltd. vs. D S Dhanda [(2020) 16 SCC 318], which stated that multiple compensations for a single deficiency act are not justified.

Based on these observations, the NCDRC partly allowed the appeal and modified the State Commission's order. Ansal Properties was ordered to refund the amounts deposited by the Complainant without any deductions, with compensation at 9% per annum from the respective deposit dates. Further, Ansal Properties was also directed to pay Rs. 50,000/- as litigation costs to the Complainant.

Case Title: S.K. Rathore vs Ansal Properties and Infrastructure Ltd. and Anr. (and connected matters)

Case No.: First Appeal No. 44 of 2018

Advocate for the Complainant: Mr B.S. Sharma

Advocate for the Respondent: Mr Navdeep Singh (proxy)

Date of Pronouncement: 29th July 2024