Rajasthan Adjudicating Officer Directs Compensation To Complainant For Financial Loss And Loss Of Opportunity

Background Facts

Relying on the brochure, the complainant booked a shop in the builder's (Respondents) project named City Trade Center, situated in Sriganganagar. The total sale consideration for the shop was Rs. 42.95 lakhs, out of which the complainant paid Rs. 17 lakhs to the builder.

However, despite paying a substantial amount, the builder did not complete the project within the prescribed time period. The complainant alleged that the building construction was not carried out according to the approved plan and that the builder violated the approved plan by constructing additional floors. Furthermore, the builder failed to provide the amenities that were promised in the brochure.

Being aggrieved, the complainant filed a complaint before the Authority, seeking a refund of the amount paid with interest. The Authority, through its order dated 13.03.2023, directed the builder to refund the complainant's money with 10% per annum interest.

The complainant further contended that he lost the opportunity for property appreciation, which would have valued the property at Rs. 80 lakhs today, and if possession had been given on time, he would have earned Rs. 22,20,000 as rent from 2014 to 2023.

Therefore, the complainant filed an application before the adjudicating authority bench of the Authority, seeking compensation for the lost amount he would have earned if possession had been provided on time, Rs. 15 lakhs for physical and mental harassment, and Rs. 1 lakh for litigation costs.

Observation and Direction by Authority

The Tribunal observed that the argument claiming the complaint is not valid because of res judicata is not valid and held that the Authority and the Tribunal have separate and distinct jurisdictions. Therefore, the Authority does not need to give permission for the Tribunal to hear a complaint for compensation.

The Tribunal referred to the case of M/s. Newtech Promoters and Developers Pvt. Ltd. vs. State of U.P., where it was held that even if the Authority allows a refund, the complainant can still seek compensation for financial loss, physical, and mental suffering, provided they present solid evidence.

The Tribunal noted that the complainant had paid ₹17 lakhs and that the project became illegal due to non-registration and violations of the layout plan, including raising more floors than permitted. Therefore, the Tribunal concluded that the builder had violated Sections 18 and 19 of the RERA, 2016, and is liable to pay compensation to the complainant.

The Tribunal observed that since the complainant chose to withdraw from the project, issues related to possession, rental income loss, and the absence of promised amenities are no longer relevant.

The Tribunal also noted that if the complainant had invested the amount elsewhere, they could have earned a return of at least 12% per annum, and if builder had borrowed from a financial institution, they would have paid over 19% per annum in interest. Therefore, the Authority directed an additional 2% interest on the deposited amount as compensation for the financial loss.

Additionally, the Tribunal observed that the complainant lost the opportunity cost and suffered physical and mental distress due to the builder's deficiency in service. As a result, the tribunal awarded the complainant a lump sum compensation of ₹1 lakh for these sufferings. The Authority also directed the builder to pay ₹20,000 to the complainant as litigation costs.

Case – Kundan Lal Versus Harish Jasuja & others

Citation - Complaint No.RAJ-RERA-C-2020-3902