NCDRC Holds Omaxe Chandigarh Liable For Deficiency In Service For Delay In Possession

Brief Facts of the Case

The complainant booked a residential plot in the “Omaxe Chandigarh Extn” project by the developer. They initially paid Rs. 14,00,000 by cheque and later made additional payments totaling Rs. 39,41,500. The total plot price was Rs. 41,63,106.24, including various charges. As per the agreement, the developer was to hand over possession within 18 months, extendable by 6 months. The developer later offered possession and demanded the remaining charges. However, the complainant found the plot lacked basic amenities like water, electricity, sewerage, and roads. Alleging deficiency in service and unfair trade practices, the complainant filed a consumer complaint with the State Commission, U.T. Chandigarh. The State Commission allowed the complaint, following which the developer appealed to the National Commission.

Contentions of the Developer

The developers raised objections that the complainant was not a consumer because he did not purchase the plot for personal use but for investment, given that he was a resident of Bathinda and the plot was over 250 km away in Chandigarh. They argued that the State Commission lacked territorial jurisdiction as all transactions and agreements occurred in Chandigarh. Additionally, they claimed the State Commission lacked pecuniary jurisdiction because the relief sought exceeded Rs. 1 crore. The developers also stated that the case involved complex factual questions requiring detailed evidence, which should have been referred to arbitration per the agreement. On the merits, the developers contended that the complainant delayed payments and thus was not entitled to claim a delay in possession under clause 24-A, attributing any delay to him. They argued that the provisions of the PAPRA were followed, and since the agreement was executed, the complainant could not raise grievances after more than six years. The allotment letter specified that no claims for damages or compensation for delay in possession would be accepted. The developers denied any deficiency in service or unfair trade practices.

Observations by the National Commission

The Commission observed that it was an established fact that there had been an unreasonable delay in the development of the project in dispute by the developer. The Commission highlighted the Supreme Court's decision in Samruddhi Co-Operative Housing Society Ltd. Vs. Mumbai Mahalaxmi Construction Pvt. Ltd., wherein it held that the failure of the developer to obtain the occupancy certificate constituted a deficiency in service, making the members well within their rights as 'consumers' to claim compensation. Regarding the interest awarded, the Commission emphasized the Supreme Court's judgment in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, where it modified the interest rate from 12% to 9% per annum, considering all the facts and circumstances. The Commission highlighted the Supreme Court's recent judgment in DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Assn., wherein it held that while the contractual rate might be higher, the compensation should be reduced from 7% to 6%, considering the facts and circumstances, and any amount paid under the contractual rate shall be adjusted. The Commission observed the developer's contention that possession was offered to the complainant in June 2017, but the complainant failed to take possession. In this regard, the Commission cited the Supreme Court's decision in Supertech Ltd. Vs. Rajni Goyal, which held that even if possession was offered, the period of compensation should be computed from the scheduled date until the date of actual possession, considering any legal impediments or delays in obtaining the occupancy certificate. Regarding the contention that the complainant purchased the plot for commercial purposes, the Commission referred to its own decision in Sanjay Rastogi v. BPTP Limited & Anr, upheld by the Supreme Court, which held that the developer should establish through documentary evidence that the complainants were dealing in real estate or purchasing for resale purposes. The Commission observed that in the instant case, while the complainant denied commercial purposes, the developer had no evidence to assert that the unit was purchased for resale.

The National Commission modified the State Commission's order and directed the developer to deliver the completed plot with necessary certificates to the complainant within three months and pay interest on Rs. 39,41,500 at 6% per annum from the date of the possession offer. The State Commission's order for Rs. 66,000 compensation was set aside, but the developer was instructed to pay Rs. 50,000 as litigation costs.

Case Title: M/S Omaxe Chandigarh Extension Developers Pvt. Ltd Vs. Pawan Kapoor

Case Number: F.A. No. 1845/2018