Order Date: Not Specified
Order Name: Vice Chairman, Lucknow Development Authority vs. Alok Srivastava
Case No.: F.A. No. 618/2016
The National Consumer Disputes Redressal Commission (NCDRC), led by Mr. Subhash Chandra and Dr. Sadhna Shanker, has held the Lucknow Development Authority responsible for deficient service. The Commission emphasized that a buyer should not be forced to wait indefinitely for possession and that a delayed refund offer from the builder is insufficient.
Case Background
The Lucknow Development Authority, which manages housing projects for the UP Government, allotted an MIG Duplex House to the complainant under a specific scheme. The complainant paid Rs. 40,000 as registration and allotment fees, with the total house cost set at Rs. 2,55,000, payable in installments. Later, the builder informed the complainant that the project was nearing completion and increased the final cost to Rs. 3,76,800. The complainant paid an additional Rs. 81,800, but the house construction was never completed due to contractor negligence. Eventually, the builder offered a refund of Rs. 2,77,564, which the complainant refused. The complainant then filed a case with the State Commission of Uttar Pradesh. The State Commission ruled in favor of the complainant, ordering the builder to pay Rs. 6,82,500 with 10% interest, Rs. 10 lakhs for harassment and mental agony, and Rs. 10,000 for litigation costs. The builder appealed this decision before the National Commission.
Builder’s Arguments
The builder admitted to allotting the flat and receiving Rs. 3,76,800, including the cost escalation. They cited contractor negligence for the project delay and argued that the refund offer of Rs. 2,77,564 was fair. The builder contended that the State Commission’s decision was unfair, as it imposed heavy construction costs and excessive damages. They claimed the compensation and interest were calculated incorrectly and sought to overturn the order.
National Commission’s Observations
The National Commission referred to several Supreme Court cases, such as Fortune Infrastructure & Anr. Vs. Trevor D’ Lima & Ors. and Kolkata West International City Pvt. Ltd. Vs Devasis Rudra, establishing that buyers should not wait indefinitely for possession. Additionally, the Commission cited Experion Developers Pvt. Ltd. Vs Sushma Ashok Shiroor, affirming that compensation should be both compensatory and restitutionary.
The National Commission found the builder liable for not delivering the house on time and not addressing the complainant’s issues promptly. They deemed the builder’s refund offer inadequate, especially given the delay. Although the complainant received the plot in 2023, the construction was still incomplete. The State Commission’s compensation valuation, based on outdated rates, was adjusted, and a higher interest rate of 7.5% was set due to the prolonged case history. Compensation for monetary loss, mental agony, and harassment was revised, and litigation costs were increased.
Final Decision
The National Commission partly upheld the builder’s appeal, directing them to refund Rs. 3,76,800 with 7.5% annual interest and Rs. 1,00,000 for litigation costs. However, it overturned the State Commission’s directive to award Rs. 10 lakhs for monetary loss, mental agony, and harassment.
Takeaway
This judgment underscores that builders cannot indefinitely delay possession and that compensation should adequately address the inconvenience and financial strain experienced by buyers.
