In Dispute Originating From Consumers' Grievance, Role Of Court Has To Be Beyond Just Being Adjudicatory Forum: SC

The Supreme Court has recently observed that in a dispute that has originated from a consumer's grievance, the role of the Court must be beyond just being an adjudicatory forum.

"Moreover, the nature of the dispute having originated from a consumers' grievance, the role of the Court has to be beyond just being an adjudicatory forum in an adversarial cause, and must have an element of proactivity in public interest.", the Bench of Justices Dinesh Maheshwari and Justice Aniruddha Bose observed.

The Court was adjudicating over a case involving a builder and allottee wherein an Apartment Buyers' Agreement, was executed between Utpal Trehan ("allottee") and DLF Home Developers Limited (the "builder") for the purchase of a flat.

The flat was booked by the allottee on depositing a sum of Rs.5 lakhs for which the allotment letter was also issued. The consideration amount was Rs.45,12,000/­, to be paid as per the instalment payment plan forming part of the Agreement.

The time for possession was stipulated to be within 36 months from the date of execution of the Agreement. This date of delivery of possession, along with the effects thereof, underwent certain changes, as there was a delay on the part of the builders in getting certain regulatory clearance.

The allottee approached the Delhi State Consumer Disputes Redressal Commission ("State Commission") after the builder had raised additional demands under different heads. As per the allottee, the total sum, demanded, added up to Rs.9 lakhs approximately. Otherwise, the allottee claims to have cleared the requisite instalments.

The main complaint of the allottee was being deprived of certain payment-related benefits on being offered possession of the flat. He was being denied these benefits since as per the builder, the allottee had made a default in payment within the due date on demand of the developer of the ensuing instalment.

The State Commission found that there was a deficiency in service and the complaint was allowed however on the question of maintenance charges, the State Commission went against the allottee holding that the maintenance charges shall be payable to the Condominium Association.

One of the critical issues which were examined by the State Commission was whether there was any delay in payment of instalment by the allottee upon demand being made.

The builder alleged that the demand, in this case, was made on 29th December 2011 requiring the allottee to make payment by 18th January 2012. To which the allottee took the plea that the letter of 29th December 2011 was never received by him and when he received a reminder letter of 19th January 2012 on 22nd January 2012, he made the payment on 27th January 2012.

The State Commission held that the developer had failed to prove service of demand notice upon the allottee and that the allottee could not be deprived of the benefits.

An appeal was made to the National Commission by the allottee against the finding given by the State Commission on maintenance charges. On the other hand, the builder questioned the legality of the State Commission's decision under which they were directed to issue a fresh offer of possession and payment of delayed compensation.

The National Commission partly allowed the appeals while holding inter alia that the builder shall offer possession of the apartment in dispute to the complainant afresh and pay compensation for delay in possession and directed the allottee to pay the builder maintenance charges.

Senior Advocate Pinaki Mishra appeared for the builder and the allottee appeared in person.

The Court observed that the clause relating to fixation of total maintenance charges only specifies the obligation of an allottee to pay such charges and the substantive Agreement specifies again that the maintenance charges would be payable to the maintenance agency.

The Court noted that no specific case has been made out that the builder themselves are carrying on the maintenance work, which could have brought them within the definition of maintenance agency under the main Agreement.

The Court opined that without any claim from the entity, who are to render maintenance services and charge for the same the two statutory fora ought not to have directed the allottee to make payment of maintenance charges.

"The National and the State Commissions, in our opinion, have committed error in directing the allotee to make payment of maintenance charges, which ought to have been paid to the association when there was no claim from the association in the first place. Secondly, nothing has been brought to our notice from which it could be inferred that the builder had the authority to represent the association for collecting maintenance charges.", the Court observed.

Accordingly, the Court held that the finding of the National Commission as also the State Commission that the allottee would be required to pay maintenance charges was erroneous and that part of the findings of the commissions was set aside.

Further, the Court accepted the argument of the builder that the time for payment of compensation for delayed payment shall stop running from the date of the offer for possession, however, the Court observed that there was no valid offer for possession. The Court sustained the order of the National Commission as also the State Commission that a fresh offer of possession ought to be issued.

On the point of payment of delayed compensation, the Court observed thus "So far as the present appeals are concerned, the quantum of delayed compensation has been enhanced by the builder themselves, along with provision for enhancement with respect to the delay in payment if made by the allottee in taking possession. In such circumstances, we do not think the National Commission ought to have had deviated from the modified contractual terms contained in the communication dated 26th March 2009 and replace the said terms with 6% interest per annum from July 2013 till the date of fresh offer of possession was made. In our opinion, on the point of payment of delayed compensation, the State Commission's view was the right view."

The Court directed that delayed compensation be paid at the rate of Rs.10 per square feet per month for the entire period from March 2011 till the date on which the fresh offer of possession is issued.

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