Order Name: Eros City Developers Pvt. Ltd. Vs. Smt. Gina Singh Choudhary
Case No.: F.A. No. 432/2024
The National Consumer Disputes Redressal Commission, led by Justice Ram Surat Maurya and Justice Bharatkumar Pandya, has held Eros City Developers accountable for delaying the handover of possession to the complainant. The Commission emphasized that buyers should not have to wait indefinitely for possession, establishing that three years is a reasonable period for such handovers.
### Brief Facts of the Case
In 2004, the complainant booked a shop in a Ghaziabad project by Eros City Developers, intending to open a women’s clothing store. By 2012, a significant amount had been paid as per the agreed payment plan. In 2010, the developer offered possession, but the complainant found the mall in poor condition, contrary to what was promised. Despite protests and meetings, the developer did not complete the project as specified. In 2014, a partial completion certificate was obtained, but the project remained incomplete, with exaggerated charges and non-functional facilities. The delays led to financial losses for the complainant, prompting a complaint to the State Commission of Delhi. The Commission directed the developer to refund the money with 6% annual interest, along with Rs. 10,000 for mental agony and Rs. 50,000 for litigation costs. The developer then appealed to the National Commission.
### Contentions of the Developer
The developer acknowledged the shop booking, agreement, and deposits but argued that the project could not be completed quickly. They claimed the complainants signed the agreement willingly and were informed about the project timeline. They also denied committing to a specific possession date or promising water connections to all shops. According to the developer, the mall was completed and functional by 2008-2009, and necessary certificates were obtained by 2014 and 2016. They refuted claims of substandard conditions and exaggerated charges, asserting that the complainants took possession in 2010 after being satisfied with the construction quality. The developer contended that the complaint was time-barred and not maintainable since the complainants were commercial buyers, not consumers. They also suggested that the complainants were attempting to exit the contract due to unmet speculative value increases.
### Observations by the National Commission
The National Commission noted that while the developer offered possession, it was merely ‘paper possession’ as the building was incomplete and lacked a ‘Completion Certificate.’ The complaint was deemed not time-barred, supported by Supreme Court rulings in cases like Lata Construction vs. Dr. Ramesh Chandra Ramaniklal Shah, Meerut Development Authority vs. Mukesh K. Gupta, and Samruddi Cooperative Housing Society Limited vs. Mumbai Mahalaxmi Construction Pvt. Ltd., which mandate that a builder must hand over a fully completed unit. The demand for a refund was justified due to the prolonged delay in offering possession. The Supreme Court, in several cases, including Pioneer Urban Land & Infrastructure Ltd. vs. Govindan Raghavan, ruled that a reasonable period for possession is three years. The Commission also noted that the State Commission’s order granted 6% annual interest on refunds, which contradicts the Supreme Court’s decision in Experion Developers Private Limited vs. Sushma Ashok Shiroor, where 9% interest was deemed fair compensation.
Consequently, the National Commission upheld the State Commission’s order with modifications and dismissed the appeal.
### Takeaway
This judgment highlights the importance of timely possession for property buyers. Developers must adhere to reasonable timelines and fulfill promises made to buyers, or they may face legal consequences and financial liabilities. Buyers should be aware of their rights and can seek redressal if subjected to undue delays.
