No Interest Can Accure On Refusal Of Compensation Offered On Time: NCDRC

Brief Facts of the Case

The complainants, both senior citizens, booked an apartment with Elita Garden Vista/builder and paid Rs.1,00,000 as booking charges. They signed an agreement to purchase a flat for Rs.55,77,000, which included exclusive use of a terrace and a covered parking space. After making all payments, the deed of conveyance was executed, and they took possession of the flat. However, they found numerous issues, such as cracked walls, no water supply in the kitchen, rusted railings, and electrical problems. Despite handing over the keys to the builder for repairs, the issues were not adequately fixed. The complainants sent a demand notice to the builder outlining these problems but received no response. Alleging deficiency in service, they approached the State Commission of West Bengal for redress. The State Commission partly allowed the complaint and directed the builder to rectify all the defects and to pay Rs.50,000 in favour of the complainants as compensation for harassment and mental agony, along with Rs. 10,000 as litigation cost. Dissatisfied with the State Commission's order, the complainants appealed to the National Commission.

Contentions of the Builder

The builder contested the complaint, arguing that since the complainants had become absolute owners of the flat, they could no longer be considered consumers. Additionally, the builder highlighted that the deed of conveyance included an arbitration clause, which mandated that any disputes be resolved under the Arbitration and Conciliation Act 1996. The builder claimed that all issues were addressed during a joint inspection following the transfer of possession and that there were no defects when handing over the flat. They further contended that the complainants did not raise any immediate complaints and only reported minor issues two months later, which were promptly rectified, asserting no deficiency on their part.

Observations by the National Commission

The National Commission considered whether there was a deficiency in service by the builder. They noted the builder had a valid occupancy certificate when the complainants took possession of the flat, and subsequent renewals were obtained per regulations. Regarding the super built-up area and built-up area disputes, the State Commission had already disposed of these issues, and the complainants' claim for a refund based on the less saleable area was not adjudicated since it wasn't in the original pleadings. The sit-out area was for use, not ownership, and defects in its tiles were noted to potentially reoccur due to installations by other flat owners. The issue of the non-release of domestic electricity connection had not been addressed by the State Commission in its final order. The Commission directed the builder to ensure the connection is provided, recognizing the lack of electricity as a deficiency in service. The commission observed that the builder had sent compensation and litigation costs to the complainants, which were refused. The builder also requested the return of the flat's keys to address defects, but the complainants did not comply. Since compensation was offered in a timely manner but refused, no interest would accrue on it.

The National Commission upheld the State Commission's order but modified it, directing the builder to grant compensation and litigation costs without an interest component.

Case Title: Abhoy Kumar Bandyopadhyay Vs. M/S Elita Garden Vista Project Ltd.

Case Number: F.A. No. 1793/2018