Order Name: Sindhu Mattoo Vs. PAN Realtors Pvt Ltd.
Case No.: F.A. No. 633/2021
The National Consumer Disputes Redressal Commission, led by Mr. Subhash Chandra and Dr. Sadhna Shanker, has ruled in favor of homebuyers, emphasizing that they can claim a refund along with compensation if there is an indefinite delay in receiving possession of their property.
Case Summary
The complainant reserved an apartment for personal use with a builder for a sum of Rs. 43,07,250. After paying the initial booking amount and signing a Flat Buyers’ Agreement (FBA), the complainant was first assigned a park-facing apartment. However, due to an error, the builder later changed it to a south-facing one. The builder then proposed another apartment at an increased cost, which the complainant accepted. Despite making significant payments, the complainant encountered repeated delays and what they perceived as unfair demands from the builder. Seeking possession and compensation for the delay and mental distress, the complainant filed a case with the State Commission of Delhi. The commission ruled in favor of the complainant, ordering the builder to deliver the apartment without extra charges. Unsatisfied with this decision, the complainant took the matter to the National Commission.
Builder’s Argument
The builder defended the delay, attributing it to a halt in construction ordered by the National Green Tribunal (NGT), which they argued was a force majeure event. The stoppage was due to environmental clearance issues affecting areas within a 10 km radius of the Okhla Bird Sanctuary. Work resumed only after the Ministry of Environment & Forest issued a Gazette Notification outlining the Eco-Sensitive Zone. The NOIDA Authority recognized this delay as a “Zero Period,” a term later extended by the Government of Uttar Pradesh. The builder also contended that the complainant waited an additional 1.5 years before filing the complaint instead of accepting possession.
National Commission’s Observations
The National Commission noted the builder’s reliance on force majeure but highlighted an admitted delay of over two years in providing possession. Citing a Supreme Court ruling in Kolkata West International City Pvt. Ltd. vs. Devasis Rudra, it emphasized that buyers should not be expected to wait indefinitely, particularly in cases extending beyond seven years. The Court referenced previous cases where buyers were entitled to a refund with compensation for indefinite delays. The Supreme Court in Experion Developers Private Limited vs. Sushma Ashok Shiroor deemed a 9% interest rate as fair compensation in refund cases, while a 6% interest rate was considered appropriate for delayed possession, as seen in other notable cases.
In this specific instance, the builder offered possession after receiving the Occupation Certificate, taking into account the “Zero Period” declared by the NOIDA Authority. However, the National Commission modified the State Commission’s order, directing the builder to pay 6% interest from the expected possession date until the actual offer of possession, along with litigation costs amounting to Rs. 50,000.
Takeaway
This judgment underscores the rights of homebuyers to seek compensation and refunds when faced with unreasonable delays in property possession. It highlights the judiciary’s stance that buyers should not be left waiting indefinitely and ensures fair compensation for such inconveniences.
