Too Much To Ask Developer To Accept Balance Consideration And Execute Sale Deed After 16 Years- SC Modifies NCDRC's Order

The Supreme Court has held that it would be "too much" to ask a developer to execute the sale deed for a property by accepting the balance consideration of Rs 6.49 lakh after 16 years.

The Apex Court modified the order of the National Consumer Disputes Redressal Commission (NCDRC), which had directed the developer to hand over possession of the house situated in Nagpur to the complainant and execute the sale deed after obtaining the occupation certificate.

In its December 2019 verdict, the NCDRC had also directed the complainant to pay the balance sale consideration of Rs 6.49 lakh within four weeks to the developer.

In its judgement delivered on an appeal by the developer against the NCDRC order, the top court noted that almost 16 years have elapsed since the parties had entered into a contract and it is not in dispute that the complainant has failed to make the entire payment towards the purchase of the house.

"We are of the view that it will be too much at this point of time i.e. after a period of almost 16 years to ask the appellant herein to execute the sale deed by accepting the balance consideration of Rs 6,49,220," said a bench of Justice D Y Chandrachud and Justice J B Pardiwala.

"We are of the view that the ends of justice would be met if we direct the appellant herein to refund the amount of Rs 3,24,780 with interest at the rate of 12 per cent per annum to the original complainant and put an end to the entire litigation," it said.

The Apex Court noted that the original complainant had lodged a complaint under section 12 of the Consumer Protection Act, 1986, before the District Consumer Disputes Redressal Forum at Nagpur and had said that he and the developer had entered into a contract in connection with the purchase of a house.

The complainant had entered into an agreement dated June 8, 2006, with the developer for a total sale consideration of Rs 9.74 lakh.

The bench noted that the understanding between the parties was that the complainant would pay Rs 4,23,520 in cash to the developer and the balance amount of Rs. 5.50 lakh would be paid after the complainant would get the loan disbursed from the bank.

The bank sanctioned the loan of Rs 6.40 lakh in favour of the complainant in November 2006 but the same never came to be actually disbursed and later, a dispute cropped up between the parties.

The developer was directed by the district forum to complete the construction in accordance with the agreement and hand over its possession to the complainant upon execution of the sale deed as per the terms of the contract. The developer later approached the NCDRC.

In its verdict, the Apex Court noted that the agreement for sale was entered into in June 2006 and the loan came to be sanctioned by the bank in November 2006 but no further steps were taken by the complainant to ensure that the amount sanctioned was paid to the developer.

It observed that the respondents, including the original complainant, have chosen not to remain present before it either in person or through an advocate to oppose the appeal despite being served with the notice issued by the Court.

The Bench noted that the NCDRC had stayed the district forum's order pending the final disposal of the revision application on the condition that the developer would deposit Rs 3,24,780 with interest at the rate of 12 per cent per annum from the respective dates of deposit.

It said the NCDRC had passed the order in December 2019 and till date, the complainant has not come forward to pay the balance sale consideration of Rs 6.49 lakh to the developer.

"The impugned order passed by the National Consumer Commission dated December 12, 2019, is hereby modified to the extent that the appellant herein shall pay the amount of Rs 3,24,780 to the original complainant with interest at the rate of 12 per cent per annum from the date of the agreement for sale i.e. June 8, 2006," the Apex Court said.

It said once this amount is paid, there shall be no further liability of the developer in any respect so far as the property is concerned. While disposing of the appeal, the bench said it shall be open to the developer to seek a refund of the amount, which was deposited by it with the NCDRC, to pay to the complainant.

Cause Title: M/s. Siddhyvinayak Infrastructure v. Kamalakar Jayant Srivastava & Anr.

Click here to read/download Judgment

With PTI inputs