Order Date: 17th March 2025
Order Name: Sri Radha Skygarden Homebuyers Association vs M/s SJP Infracon Ltd.
Case No.: C.C. No. NC/CC/884/2020
The National Consumer Disputes Redressal Commission (NCDRC) recently made a significant ruling against M/s SJP Infracon Ltd., a builder involved in the ‘Sri Radha Skygarden’ project. This case highlights the builder’s failure to provide flats to homebuyers within the promised deadline and its attempt to hand over possession based on Temporary Occupancy Certificates (TOCs).
### Background
In 2010, SJP Infracon Ltd. launched the ‘Sri Radha Skygarden’ housing project. After collecting 95% of the payment from buyers, the construction stalled, and the buyers received allotment letters with unfair terms. The builder missed the deadline for delivering possession as specified in the allotment letters. Moreover, the compensation for delays was minimal, at just Rs. 5 per square foot per month.
In March 2019, the builder issued possession letters to buyers, charging them interest for supposed late payments, despite no such delays. Additionally, for bookings made before 25th June 2013, a ‘Farmers Compensation’ fee of Rs. 75 per square foot was levied. The possession letters were based on a TOC from the Greater Noida Industrial Development Authority, which mentioned defects in the apartments. This led the buyers to form the Sri Radha Homebuyers Association to defend their rights.
### Builder’s Defense
SJP Infracon Ltd. argued that the complaint was time-barred. They claimed that 16 out of 19 towers were complete, with 535 allottees residing there, and that occupancy certificates for the remaining three towers were pending. The builder cited adverse events like demonetization, GST changes, and COVID-19 as reasons for delays.
### NCDRC’s Observations
The NCDRC noted that SJP Infracon Ltd. had not presented valid occupancy certificates, indicating non-compliance. A TOC, issued to address building discrepancies, was not equivalent to an occupancy certificate. Therefore, possession based on a TOC was invalid.
The NCDRC reiterated that possession must be delivered within the agreed time frame, with a grace period of six months. If no specific period is mentioned, a three-year time frame applies. The builder’s failure to meet this timeline constituted a deficiency in service, warranting compensation.
The commission rejected the builder’s claim of time-barred complaints, citing a continuing cause of action due to buyers waiting for possession after paying 95% of the cost. The reasons for delay were dismissed as they occurred after the project’s scheduled completion. The ‘Farmers Compensation’ fee was also deemed unjustified.
### NCDRC’s Order
The NCDRC directed SJP Infracon Ltd. to:
1. Hand over possession of apartments with valid occupancy certificates within six months, without demanding excess fees, including the ‘Farmers Compensation’.
2. Execute conveyance deeds in favor of buyers within six months.
3. Compensate for delays with 8% annual interest on deposited amounts, adjusted against any remaining payments.
4. Offer buyers the choice of waiting for occupancy certificates or seeking a refund with 9% interest, increased to 12% if delayed beyond two months.
5. Pay Rs. 1 Lakh as litigation costs to the complainants.
### Takeaway
This ruling underscores the importance of builders adhering to timelines and transparent dealings with homebuyers. Buyers should be vigilant about the terms in allotment letters and advocate collectively if discrepancies arise. This case emphasizes the need for valid occupancy certificates before possession is offered.
