Buyers Cannot Be Made To Wait Indefinitely For Possession: NCDRC Holds VGN Projects Liable For Deficiency In Service

Brief Facts of the Case

The complainant and his wife entered into agreements with VGN Projects Estates//builder to purchase and construct an apartment in the “CGN Temple Town” project for Rs. 2,560,184. After paying the earnest money, the complainant requested time to review the agreements but was allegedly threatened with forfeiture if he did not sign, so he signed under duress. The construction was to be completed within 24 months plus a 6-month grace period, but the work was less than half finished four and a half years later. Despite receiving 95% of the sale amount, the builder demanded the remaining balance and maintenance charges without completing the project or handing over possession. The complainant was not allowed to visit the site and was humiliated by security when he tried to meet officials. Frustrated by the delays and illegal demands, he filed a complaint with the State Commission, which allowed the complaint. Aggrieved by this, the builder appealed to the National Commission.

Contentions of the Builder

The builder contested the complaint, stating that the flat was ready for occupation, and the complainant was asked to pay the remaining Rs. 130,053 to obtain possession, which he failed to do. The delay in handing over possession was due to market conditions, unexpected demand, and the non-availability of construction materials, which were beyond their control. The possession was to be handed over within 24 months plus a 6-month grace period, subject to force majeure conditions as per the development agreement. Therefore, the builder argued that they could not compensate for the delay. They also claimed they did not prevent any customer from visiting the site and that the complainant's allegations were false, warranting dismissal of the complaint.

Observations by the Commission

The Commission observed that the builder offered possession via email, which the complainant refused, citing non-payment of the balance amount. However, the builder admitted in its written statement that the partial completion certificate was obtained later, proving that the offer of possession was not valid when it was made. The builder failed to provide evidence of obtaining any completion certificate before the offer of possession. The commission emphasized that as possession was to be handed over by March 2016, and the partial certificate was only obtained in October 2018, the State Commission was justified in directing the builder to refund the amount with interest. This decision aligned with Supreme Court judgments in Bangalore Development Authority Vs. Syndicate Bank (2007) which stated that buyers cannot be made to wait indefinitely for possession. However, the commission found the 18% per annum interest awarded by the State Commission excessive. It noted that the Supreme Court, in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda, ruled against compensation under multiple heads in similar cases.

The Commission partly allowed the petition and directed the builder to refund the entire amount deposited by the complainant with interest @ 9% per annum. The builder was also directed to pay the complainant a consolidated cost of Rs. 20,000 as compensation.

Case Title: VGN Projects Estates Pvt. Ltd. Vs. M.P. Nagendran

Case Number: No. 286/2018