Order Date: Not Specified
Order Name: Greater Noida Industrial Development Authority & Anr Vs. Ashish Deep
Case No.: F.A. No. 652/2021
The National Consumer Disputes Redressal Commission, led by Mr. Subhash Chandra and Dr. Sadhna Shanker, has ruled that issuing a possession certificate for a house before completing the construction counts as a deficiency in service.
Background
The case revolves around a complainant who was allocated a house on a 120 sq m plot by the Greater Noida Industrial Development Authority (GNIDA). The developer, after arranging for the Lease Deed, demanded extra charges from the complainant. These charges were based on a previous court ruling that required GNIDA to pay higher compensation to farmers, which they intended to recover from the allottees. Despite the execution of a Lease Deed and the issuance of a Possession Certificate, the complainant did not take possession of the house. Instead, they filed a complaint with the State Commission of Uttar Pradesh, seeking the handover of the house, compensation for mental distress, reimbursement for rent, cancellation of the demand letter, and litigation costs. The State Commission ruled in favor of the complainant, ordering the developer to finish building the house and deliver it in a habitable state within six months. They were also directed to pay Rs. 1,00,000 for mental and financial distress and Rs. 25,000 for litigation expenses. Unhappy with this decision, the developer appealed to the National Commission.
Developer’s Arguments
The developer argued that because the construction was incomplete and the house was unfit for living, the possession certificate was meaningless. They contended that the additional land cost was unjustified and only the compensation for the farmers was pending due to delayed payment resolution. The developer accused the complainant of unfair practices, such as insisting on the Lease Deed’s execution without the completion of construction and penalizing them for delays. Though a possession letter was signed, actual possession was not granted. They also contested the demand for additional compensation after the Lease Deed and No Dues Certificate had been issued, claiming that the issue was ongoing since physical possession had not been provided.
National Commission’s Observations
The National Commission noted that the complaint was filed within the appropriate time limit. However, it pointed out that the State Commission should have handled claims up to Rs. 1 crore only, as per precedents set in cases like Ambreesh Kumar Shukla vs Ferrous Infrastructure Pvt. Ltd. and Renu Singh vs Experion Developers Pvt. Ltd. Since this claim exceeded that limit, the State Commission overstepped its authority, and thus, its order was overturned. On examining the merits, the commission found that issuing a possession certificate for an incomplete house was indeed a deficiency in service. For the delay, they cited Wg Cdr Arifur Rahman Khan vs DLF Southern Homes Pvt. Ltd., awarding a 6% interest on the deposited amount from the date of the Lease Deed until possession was offered, considering it a reasonable compensation.
The National Commission dismissed the developer’s appeal, directing them to complete the construction, provide an account statement, compensate the complainant with 6% interest, and pay Rs. 1,00,000 for litigation costs.
Takeaway
This case highlights the importance of ensuring that a property is fully constructed and habitable before issuing possession certificates. Developers must adhere to their contractual obligations, and any failure to do so can result in legal and financial repercussions.
