Case Title: Emaar India Ltd. & Anr. Vs. Gaurav Singh Khurana
Case Number: F.A. No. 923/2021
The National Consumer Disputes Redressal Commission, led by Mr. Subhash Chandra and Dr. Sadhna Shanker, has ruled that an arbitration clause in a builder-buyer agreement does not limit a Consumer Commission’s jurisdiction.
Let’s dive into the details of the case:
Gaurav Singh Khurana and other complainants booked a flat in the “The Views” project by Emaar India. They paid Rs.37,75,900 towards the total cost of Rs.41,36,550. The builder promised to hand over the flat within 36 months of the agreement. However, the builder failed to deliver on this promise, and the complainants’ requests for a refund and interest were ignored. This led them to take the issue to the State Commission, which ruled in their favour.
Emaar India, the builder, argued that the complainants were not consumers as they already owned a house in New Delhi and were buying the flat purely for profit. They also claimed that the complaint was outside the limitation period. The builder pointed to the Real Estate (Regulation and Development) Act (RERA) and an arbitration clause in the agreement to argue that the State Commission lacked jurisdiction. They also claimed that the sale of immovable property does not hinge on time and that there was no specific commitment to hand over possession within three years. If a refund was sought, they argued, the earnest money would be forfeited as per the agreement’s terms and conditions.
The Commission disagreed with the builder’s arguments. They recognized a clear deficiency on the builder’s part as they failed to hand over the flat within the agreed time. The Commission also relied on previous rulings that an arbitration clause in a buyer-builder agreement does not limit a consumer forum’s jurisdiction.
The RERA Act, they noted, did not apply to this case as the transaction took place before the act came into effect in 2017. The builder’s claim that the complainants were not “consumers” was also dismissed as they failed to provide any evidence to support it.
The Commission observed an unreasonable delay in the project’s construction. Despite the flat being allotted in 2008 and part payment of Rs. 37.75 lakhs made, the builder failed to deliver possession within the agreed period, which was seen as a deficiency in service.
As a result, the Commission directed the builder to refund Rs. 37.75 lakhs to the complainants along with 9% simple interest from the deposit dates till realization, without any TDS deduction. They dismissed the Rs. 50,000 compensation for mental agony/harassment and litigation costs awarded by the State Commission, stating that multiple compensations for a single deficiency were unjustified.
This judgment reaffirms the rights of consumers and underscores the accountability of builders. It shows that despite any arbitration clauses or other arguments they might present, builders cannot evade their responsibilities. This case is a reminder that consumers have legal recourse when their rights are violated.
