NCDRC Holds Eros City Developers Liable For Delay In Handing Over The Possession

Brief Facts of the Case

In 2004, a shop was booked in a project by Eros City Developers/developer in Ghaziabad, later purchased by the complainant, intending to open a women's clothing shop. An agreement with a payment plan was executed, and a significant amount was deposited by 2012. In 2010, the developer offered possession, but the complainant found the mall in poor condition, contrary to promises. Despite protests and meetings, the developer did not complete the project as specified. In 2014, a partial completion certificate was obtained, but the project remained incomplete, with exaggerated charges and non-functional facilities. The complainant suffered financial losses due to delays and increased property prices, leading to a complaint filed before the State Commission of Delhi. The Commission directed the developer to refund the money deposited with interest @6% p.a. along with Rs. 10,000 as compensation for mental agony and Rs. 50,000 as litigation costs. Aggrieved by the State Commission's order, the developer appealed to the National Commission.

Contentions of the Developer

The developer acknowledged the shop booking, allotment, agreement, and deposits for Eros Market Place. However, it was emphasized that the project couldn't be completed quickly and that the complainants willingly signed the agreement after being informed about the project. The developer denied committing to a possession date or promising water connections to all shops. They stated the mall was completed and functional by 2008-2009, with necessary certificates obtained by 2014 and 2016. They refuted claims of substandard conditions and exaggerated charges, asserting the complainants took possession in 2010 after being satisfied with the construction quality. It was argued the complaint was time-barred and not maintainable as the complainants were commercial buyers, not consumers. The developer claimed the complainants were trying to exit the contract due to unmet speculative value increases.

Observations by the National Commission

The National Commission observed that although the complainant admitted that possession was offered, they stated it was 'paper possession' since the building was incomplete and lacked a 'Completion Certificate.' The Commission highlighted that the complaint is not time-barred, supported by Supreme Court rulings in cases like Lata Construction vs. Dr. Ramesh Chandra Ramaniklal Shah, Meerut Development Authority vs. Mukesh K. Gupta, and Samruddi Cooperative Housing Society Limited vs. Mumbai Mahalaxmi Construction Pvt. Ltd., which held that the builder must hand over a fully completed unit. Furthermore, the developer admitted to the shop's allotment, agreement execution, and deposits made. The demand for a refund by the complainants was justified due to the prolonged delay in offering possession. The Supreme Court, in several cases, including Pioneer Urban Land & Infrastructure Ltd. vs. Govindan Raghavan, ruled that a reasonable period for possession is three years, and buyers should not wait indefinitely. Lastly, the Commission noted that the State Commission's order granted 6% annual interest on refunds, which contradicts the Supreme Court's decision in Experion Developers Private Limited vs. Sushma Ashok Shiroor, where 9% interest was deemed fair compensation.

Consequently, the National Commission upheld the State Commission's order with modifications and dismissed the appeal.

Case Title: Eros City Developers Pvt. Ltd. Vs. Smt. Gina Singh Choudhary

Case Number: F.A. No. 432/2024

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