SC: Flat Buyers Are Fully Entitled to Compensation for Delayed Handing Over of Possession

Must Read

[WhatsApp Privacy Policy Row] It’s a Private App, Don’t Use It; Says Delhi High Court

On Monday, while hearing a petition regarding the privacy policy of WhatsApp, the Delhi High Court said, “It is a private app. Don't join it. It is a voluntary thing, don't accept it. Use some other app.”

Madras High Court Asks the State To Reconsider Number of Seats Allotted for Bcm Category

Mr. Shakkiya filed a Writ Petition under Article 226 of the Indian Constitution to issue a Writ of Mandamus....

Gujarat High Court Directs To Register Name of Petitioners in the Society Records as Owners of Property, as per Will

A single-judge bench of Gujarat High Court consisting of Honourable Justice Biren Vaishnav, because probate wasn’t necessary and that...

If No Complaint Is Filed, No Further Orders Are Required To Be Passed: Telangana High Court

Excerpt In Matlakunta Sundaramma vs The State Of Telangana, on January 8, 2021, the Telangana High Court decided that there...

Gujarat High Court Allows Report Filed by Official Liquidator for Dissolution of the Company

The present report had been filed by the Official Liquidator for the dissolution of M/s AtRo Limited under the...

Parents of Road Accident Victim Entitled To Compensation: Delhi High Court

Justice JR Midha said, “Even if parents are not dependent on their children at the time of an accident, they will certainly be dependent, both financially and emotionally, upon them at the later stage of their life, as the children were dependent upon their parents in their initial years.”

Follow us

On August 24th, a 2-Judge Bench held that flat buyers are fully entitled to compensation for delayed handing over of possession and for the failure of the developer to fulfil the representations made to flat buyers regarding the provision of amenities. The dismissal of the complaint by the NCDRC was erroneous and was set aside, the SC held.

Background 

On 02.07.2019, the National Consumer Disputes Redressal Commission (NCDRC) dismissed a consumer complaint filed by 339 flat buyers. It accepted the defence of DLF Southern Homes Pvt. Ltd. and Annabel Builders and Developers Pvt. Ltd. that despite a delay in handing over the possession of the residential flats, the purchasers were not entitled to compensation over the stipulated amount in the Apartment Buyers Agreement (ABA). Hence, the present appeal filed before the SC.

Appellant’s Averments

  1. There is a gross delay ranging between two and four years in handing over possession and the flat buyers ought not to be duly constrained by the terms of the agreement which are one-sided and unreasonable; 
  2. The execution of conveyances or settlement deeds would not operate to preclude the flat buyers from claiming compensation;
  3. The developers have not provided the amenities under the contract; 
  4. The flat buyers are not liable to indemnify the developer for the demand of interest and penalty raised by the tax authorities as a result of the failure to deposit the tax on time. 

Issue 

  1. Whether the stipulation contained in the ABA providing compensation for delay constrains the flat buyers? 
  2. Can a flat buyer who seeks a claim against the developer for delayed possession thereby compelled to defer the right to obtain a conveyance to perfect their title?

Court’s Observations

The Bench comprising Justices DY Chandrachud and KM Joseph observed: 

  1. The ABA is one-sided. The agreement does not reflect an even bargain. To uphold the contention of the developer that the flat buyer stands constrained by the terms of the agreed rate irrespective of the nature or extent of delay would result in a miscarriage of justice.
  2. Failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a ‘deficiency’. 
  3.  In cases where there is a gross delay in the handing over of possession beyond the contractually stipulated period, the jurisdiction of the consumer forum to award just and reasonable compensation is not constrained by the terms of a rate in builders agreement. The jurisdiction of the consumer forum extends to directing the opposite party inter alia to remove the deficiency in the service in question.
  4. The execution of the Deed of Conveyance by a flat purchaser does not preclude a consumer claim for delayed possession. 
  5. There is no absence of jurisdiction to award compensation beyond the rate stipulated in the flat buyer’s agreement where delay in handing over of the possession of a flat under the Consumer Protection Act 1986 happened. 
  6.  It is unreasonable to expect that the execution of the Deed of Conveyance by a flat purchaser precludes a consumer claim for delayed possession.
  7. A developer who has breached a clear representation made to the buyers of the amenities should be accountable to the process of law. To allow the developer to escape their obligation would put a premium on false assurances and representations made to the flat purchasers. 

Court’s Decision

The impugned NCDRC’s Judgment and Order dated 02.07.2019 was erroneous and thereby set aside. The Court directed the Respondents to pay an amount calculated at the rate of 6 percent simple interest per annum to each of the Appellants as compensation. This was in addition to the amounts which were over or credited by the developer at the time of the drawing of final accounts. The amount is payable within a period of one month from the date of the Judgment failing which would carry interest at the rate of 9 per cent per annum until paid.


Libertatem.in is now on Telegram. Follow us for regular legal updates and judgements from the court. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can also subscribe for our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

[WhatsApp Privacy Policy Row] It’s a Private App, Don’t Use It; Says Delhi High Court

On Monday, while hearing a petition regarding the privacy policy of WhatsApp, the Delhi High Court said, “It is a private app. Don't join it. It is a voluntary thing, don't accept it. Use some other app.”

Madras High Court Asks the State To Reconsider Number of Seats Allotted for Bcm Category

Mr. Shakkiya filed a Writ Petition under Article 226 of the Indian Constitution to issue a Writ of Mandamus. The petition sought to direct...

Gujarat High Court Directs To Register Name of Petitioners in the Society Records as Owners of Property, as per Will

A single-judge bench of Gujarat High Court consisting of Honourable Justice Biren Vaishnav, because probate wasn’t necessary and that the petitioners were entitled to...

If No Complaint Is Filed, No Further Orders Are Required To Be Passed: Telangana High Court

Excerpt In Matlakunta Sundaramma vs The State Of Telangana, on January 8, 2021, the Telangana High Court decided that there is no requirement of passing...

Gujarat High Court Allows Report Filed by Official Liquidator for Dissolution of the Company

The present report had been filed by the Official Liquidator for the dissolution of M/s AtRo Limited under the provisions of Section 497 (6)...

Parents of Road Accident Victim Entitled To Compensation: Delhi High Court

Justice JR Midha said, “Even if parents are not dependent on their children at the time of an accident, they will certainly be dependent, both financially and emotionally, upon them at the later stage of their life, as the children were dependent upon their parents in their initial years.”

Plea Challenging the AIBE Rules Framed by BCI Filed in the Supreme Court

A Writ Petition was presently filed in the Supreme Court by a newly enrolled lawyer challenging the All India Bar Examination Rules 2010 which have been framed by the Bar Council of India which mandates that an advocate has to qualify for the All India Bar Examination (AIBE) to practice law after enrollment.

Bombay High Court: Mere Presence at the Crime Scene Not Enough for Punishment

The Bombay High Court ruled that it cannot be considered a crime if a person is merely present at the crime scene which falls under the Maharashtra Prohibition of Obscene Dance in Hotels and Restaurants and Bar Rooms and Protection of Dignity of Women Act 2016. It also quashed two First Information Reports (FIR) against two individuals who were arrested in a raid at a dance bar by the Santacruz Police, in 2017.

CAIT Files a Plea Against WhatsApp’s New Privacy Policy in the Supreme Court

Confederation of All India Traders (CAIT) has filed a petition against WhatsApp’s new privacy rules in the Supreme Court. The petition says that WhatsApp which is known to render public services by providing a platform to communicate has recently imposed a privacy policy that is unconstitutional, which not only goes against the fundamental rights of citizens but also jeopardizes the national security of our country.

RTI Activist Files a Plea in Bombay High Court Against Bharat Biotech’s Covaxin

On Saturday, a plea has been filed before the Bombay High Court by an activist stating that Bharat Biotech Covaxin had not been granted full approval but a restricted use in clinical trials according to the Drugs Comptroller General of India. The Company's phase 3 trials are ongoing and the DGCI has not made any data available in the public domain for peer- review by independent scientists.

More Articles Like This

- Advertisement -