Case: R V PRASANNAKUMAAR Vs. MANTRI CASTLES PVT. LTD

The National Consumer Disputes Redressal Commission ( NCDRC) by its impugned order dated 8 June 2018 disposed of the consumer complaint filed in a representative capacity under Section 12(1)(c) of the Consumer Protection Act, 1986. The NCDRC has come to the conclusion that though under the terms of the flat purchase agreement, possession was liable to be handed over to the buyers on 31 January 2014, there was a breach on the part of the developer in complying with its contractual obligations. The NCDRC has noticed that the occupation certificate was received only on 10 February 2016 and it was thereafter that from May 2016, certain letters offering possession were issued by the developer. Based on this, the NCDRC awarded compensation upto 31 July 2016 in the form of interest at the rate of 6 per cent per annum2. There is a finding in the impugned order that though the flat purchase agreement contained a stipulation for the payment of compensation at the rate of INR 3 per sq. ft. per month for delayed handing over of possession, the amount as stipulated is too meager to fulfil the requirement of just compensation to the purchasers. Accordingly, the following directions have been issued in the impugned order;i) The OPs are directed to handover the possession to the complainants (if not already handed over) within a period of 60 days from the date of this order and the complainants are also directed to complete all the formalities for taking the possessionii) The complainants are entitled to get compensation for delayed possession from 01.02.2014 till 31.07.2016 as per the agreement i.e. @ Rs. 3/- per sq. ft. per month. Over and above this amount, the opposite parties shall be liable to pay interest @ 6% p.a. from 01.02.2014 till 31.07.2016 on complainants deposited amounts with the CPs before the due date of possession i.e. 31.01.2014iii) OPs are directed to complete the common facilities and amenities as per the agreement within a period of six months from the date of this order, failing which the OPs shall pay compensation @ Rs. 1,000/- per month to each of the complainants under the present complaintiv) The OPs are also directed to pay Rs. 2,000/- (Rupees two thousand only) to each of the complainants towards cost of litigation in the present casev) All these amounts except compensation for common facilities and amenities shall be adjusted against the amount due on the complainants, if any, at the time of handing over of the possession and if no amount is due on the complainants, then the amount shall be paid by the OPs to the complainants on the date of possession3. Two sets of appeals have been filed against the order of the NCDRC. Civil Appeal No. 1232 of 2019 has been instituted by the flat purchasers while Civil Appeal Nos. 1443-1444 of 2019 is filed by the developer4. The flat purchasers are aggrieved by the order of the NCDRC since it grants interest only upto 31 July 2016 and not thereafter.

Reasoning:
9. We are in agreement with the view of the NCDRC that the rate which has been stipulated by the developer, of compensation at the rate of 3 per sq. ft. per month does not provide just or reasonable recompense to a flat buyer who has invested money and has not been handed over possession as on the stipulated date of 31 January 2014. To take a simple illustration, a flat buyer with an agreement of a flat admeasuring a 1000 sq. ft. would receive, under the agreement, not more than Rs 3000 per month. This in a city such as Bangalore does not provide just or adequate compensation. The jurisdiction of the NCDRC to award just compensation under the provisions of the Consumer Protection Act, 1986 cannot in the circumstances be constrained by the terms of the agreement. The agreement in its view is one sided and does not provide sufficient recompense to the flat purchasers10. The outer date for handing over possession was 31 January 2014. The admitted facts indicate that the occupation certificate was received on 10 February 2016. Consequently, there was a delay of at least two years since possession could not have been handed over prior to obtaining the occupation certificate11. In the circumstances, the award of interest at the rate of 6 per cent is reasonable and justified. The NCDRC however, came to the conclusion that interest should be awarded only for the period from 1 February 2014 to 31 July 201612. We find merit in the submission of the flat buyers that the liability to pay interest has been inappropriately confined only upto 31 July 2016. We find from the record that the developer, in the affidavit by way of evidence of its representative before the NCDRC, admitted that as many as 43 complainants, who had asked for possession were not given possession for the simple reason that they had moved the NCDRC in a consumer complaint.13. The fact that the flat purchasers had moved the NCDRC in a representative capacity for the redressal of their grievances is in our view, no justification to deny them possession. The fact that the flat purchasers had moved the NCDRC would not disentitle them to receive possession in accordance with the terms of the agreement15. From the above order it emerges that even according to the developer, out of 55 flat purchasers, possession had been handed over to 16 and it was stated that possession to 9 more buyers would be offered within a period of one week16. Mr. P.S. Narasimha, learned senior counsel has stated that in addition to the above 9 flat buyers, the developer will be handing over possession to 2 more flat buyers immediately.This indicates that as amongst the 55 purchasers, 25 persons have been now offered possession and an additional 2 would be offered possession shortly hereafter. In view of the above position, the NCDRC was not justified in proceeding on the basis that the liability to pay interest would cease to operate as on 31 July 2016. Since possession has not been handed over, the developer cannot avoid the liability to pay interest at the rate awarded by the NCDRC until the date when possession is actually handed over.