NCDRC Holds PAN Realtors Liable For Deficiency In Service Due To Unreasonable Delay In Handing Over Possession

Brief Facts of the Case

The complainant booked an apartment with the builder for Rs. 43,07,250 for personal use. After paying the booking amount and signing a Flat Buyers' Agreement (FBA), the builder initially allotted a park-facing apartment but later informed the complainant about an error, changing it to a south-facing one. The builder then offered another apartment with increased charges, and the complainant accepted. A new agreement was signed, with possession delayed. Despite making substantial payments, the complainant faced further delays, and the builder raised what the complainant considered unfair demands. The complainant filed a consumer complaint before the State Commission of Delhi, seeking possession, compensation for delay, and mental anguish. The State Commission allowed the complaint, ordering the builder to hand over possession without any additional charges. Dissatisfied, the complainant appealed before the National Commission.

Contentions of the Builder

The builder argued that the delay in delivering the project was due to the stoppage of work caused by an order from the National Green Tribunal (NGT), which constituted a force majeure event. Construction work within a 10km radius of the Okhla Bird Sanctuary was halted due to issues with Environmental Clearance. The suspension of work continued until the issuance of a Gazette Notification by the Ministry of Environment & Forest, which defined the Eco-Sensitive Zone. The builder further stated that the NOIDA Authority granted a “Zero Period” for the delay, which was later extended by the Government of Uttar Pradesh. It was further argued that instead of taking possession the complainant waited for another 1.5 years and filed the complaint before the State Commission

Observations by the National Commission

The National Commission observed that the builder relied on force majeure for the delay, citing reasons beyond its control. However, there was an admitted delay of over two years in offering possession. The Hon'ble Supreme Court, in Kolkata West International City Pvt. Ltd. vs. Devasis Rudra (2020) 18 SCC 613, held that it is unreasonable to expect a buyer to wait indefinitely for possession, stating that a period of seven years exceeds what is reasonable. In Fortune Infrastructure vs. Trevor D'Lima (2018) 5 SCC 442, the Court ruled that buyers are entitled to seek a refund with compensation if possession is delayed indefinitely. Regarding compensation, the Hon'ble Supreme Court in Experion Developers Private Limited vs. Sushma Ashok Shiroor (2022 SCC OnLine SC 416) held that 9% interest is just compensation in cases of refund. For delayed possession, the Court in Wg. Cdr. Arifur Rahman Khan vs. DLF Southern Homes Pvt. Ltd. (2020) 16 SCC 512 and DLF Home Developers Pvt. Ltd. vs. Capital Greens Flat Buyers Association (2021) 5 SCC 537 found 6% interest on the deposited amount appropriate compensation if possession is provided. In this case, the builder offered possession after obtaining the Occupation Certificate, considering the “Zero Period” declared by the NOIDA Authority.

The National Commission partly allowed the appeal, modifying the State Commission's order, and directing the builder to pay 6% interest from the due possession date until the offer of possession, along with litigation costs of Rs. 50,000.

Case Title: Sindhu Mattoo Vs. PAN Realtors Pvt Ltd.

Case Number: F.A. No. 633/2021