NCDRC Holds GNIDA Liable For Deficiency In Service Over Incomplete Construction

Brief Facts of the Case

The complainant was allotted a house on a 120 sq m plot by Greater Noida Industrial Development Authority(GNIDA). After issuing letters for the execution of the Lease Deed, the developer demanded additional charges based on a court judgement that required Greater NOIDA Authority to pay higher compensation to farmers, which was to be recovered from the allottees. A Lease Deed was executed, and a Possession Certificate was issued, but the complainant did not take possession and instead filed a complaint with the State Commission of Uttar Pradesh. The complainant sought possession of the house, compensation for mental agony, reimbursement for rent, nullification of the demand letter and litigation costs. The State Commission allowed the complaint and directed the developer to complete the building's construction and hand it over in a livable condition within six months. Additionally, the developer was required to pay Rs. 1,00,000 for mental and financial agony, along with Rs. 25,000 for litigation costs. Consequently, the developer appealed to the National Commission.

Contentions of the Developer

The developer claimed that possession of the plot and house had not been handed over because construction was incomplete, and the house was uninhabitable, making the possession certificate irrelevant. They disputed the additional land cost and said only compensation for farmers was unpaid due to delayed dues finalisation. The developer accused the complainant of unfair practices by forcing the execution of a lease deed without finishing construction and imposing penalties for delays. Despite signing a possession letter, physical possession was not given. They also challenged the demand for extra compensation after the lease deed and No Dues Certificate. The developer further argued that the cause of action was ongoing since physical possession had not been granted.

Observations by the National Commission

The National Commission observed that the complaint was filed within the limitation period, and the State Commission's pecuniary jurisdiction should have been capped at Rs. 1 crore, as established in Ambreesh Kumar Shukla vs Ferrous Infrastructure Pvt. Ltd. and Renu Singh vs Experion Developers Pvt. Ltd. Since the claim exceeded this limit, the State Commission exceeded its jurisdiction. Therefore, its order was set aside. On merits, the commission noted that the house was incomplete despite the lease deed and possession certificate being issued, which constituted a deficiency. For the delay in possession, the commission relied on Wg Cdr Arifur Rahman Khan vs DLF Southern Homes Pvt. Ltd., awarding 6% interest on the deposited amount from the date of the lease deed until possession was offered, considering it fair compensation.

The National Commission dismissed the appeal with directions to the developer to complete the house, provide a statement of account, compensate the complainant with 6% interest, and pay Rs. 1,00,000 as litigation costs.

Case Title: Greater Noida Industrial Development Authority & Anr Vs. Ashish Deep

Case Number: F.A. No. 652/2021