Order Date: 29th July 2024
Order Name: Shashi Bansal and Anr. vs K Soni Builders
Case No.: First Appeal No. 1371 of 2018
The National Consumer Disputes Redressal Commission (NCDRC) recently held K. Soni Builders accountable for not handing over a flat to the complainants within the agreed timeframe. The decision, presided over by Mr. Subhash Chandra, emphasized that buyers should not be expected to wait indefinitely for possession and have the right to terminate the agreement if there is a significant delay.
Case Details:
The complainants booked a 3 BHK flat (No. 601) on the 6th floor of Tower T-01, measuring approximately 1630 sq ft, for Rs. 41,00,000/-. They signed an agreement with K. Soni Builders on 25th May 2016, agreeing to pay Rs. 10 lakh as a booking amount, another Rs. 10 lakh after 30 days, and the remaining amount at the time of possession, scheduled for September 2016. The complainants paid Rs. 2 lakh on 17th April 2016, Rs. 8 lakh on 15th May 2016, and Rs. 10 lakh on 25th May 2016. According to the agreement, K. Soni Builders was supposed to deliver possession by the stipulated date or refund the amount with interest in case of a delay.
In September 2016, upon visiting the project site, the complainants found that the construction had stopped. They approached K. Soni Builders for a refund due to the project’s non-completion, but received no satisfactory response. The complainants then filed a consumer complaint with the State Consumer Disputes Redressal Commission, Punjab, accusing K. Soni Builders of fraudulent activities and deficiency in service.
K. Soni Builders argued that the complaints were false and that the State Commission lacked jurisdiction. They also claimed that the complainants were investors and not ‘consumers’ as per the law and that the complainants had not complied with the agreement’s terms after the initial deposit. Moreover, they denied receiving Rs. 20 lakh, asserting that only Rs. 10 lakh was paid.
The State Commission ordered the complainants to pay the remaining balance with 18% interest per annum within three months and for K. Soni Builders to deliver possession within one month of receiving the payment. Dissatisfied, the complainants appealed to the NCDRC.
NCDRC Observations:
The NCDRC noted that K. Soni Builders had agreed to hand over possession by September 2016, and the complainants had paid Rs. 20 lakh by 25th May 2016. The NCDRC referred to the Supreme Court rulings in Kolkata West International City Pvt. Ltd. vs. Devasis Rudra and Pioneer Urban Land and Infrastructure Ltd. vs. Govindan Raghavan, underscoring that buyers are justified in terminating agreements if possession is significantly delayed and are entitled to a refund.
The NCDRC also highlighted the ruling in Experion Developers Pvt. Ltd. vs. Sushma Ashok Shiroor, emphasizing that compensation by way of interest should be both compensatory and restitutionary. The NCDRC found that while K. Soni Builders were at fault for the delay, the complainants also failed to make timely payments. However, K. Soni Builders did not take any action to cancel the allotment or notify the complainants regarding penal interest.
Further, the NCDRC determined that the complainants were ‘consumers’ under section 2(1)(d) of the Consumer Protection Act, 1986, as they were not proven to be engaged in real estate transactions.
Final Verdict:
The NCDRC allowed the appeal, setting aside the State Commission’s order. K. Soni Builders was directed to refund Rs. 20,00,000/- with 9% interest per annum and pay Rs. 25,000/- as litigation costs.
Takeaway:
This judgment reinforces that buyers have the right to seek refunds if possession is delayed significantly. It also underscores the importance of timely payments by buyers to avoid complications.
