Consumer Forums Can Direct Return Of Money And Pay Compensation Upon Builder's Failure To Deliver Possession – SC

Appeals were preferred before the Supreme Court under Section 23 of the Consumer Protection Act assailing the judgment of the National Consumer Disputes Redressal Commission (NCDRC). The Commission had directed the Appellant–Developer to refund an amount of Rs. 2,06,41,379 with interest @ 9% p.a. to the Respondent-Consumer for its failure to deliver possession of the apartment within the time stipulated as per the Apartment Buyers Agreement.

The Apex Court had upheld the Commission's order insofar as it directed the Developer to refund the amounts paid by the Consumer with interest for the unjustifiable delay in delivering the apartment.

Counsel Mr. Gagan Gupta appeared for the Appellant – Developer, while Counsel Mr. Jitendra Chaudhary appeared for the Consumer before the Supreme Court.

The three issues which were dealt with by the Court were –

i) Whether the terms of the Apartment Buyers Agreement amounted to unfair trade practice and whether the Commission was justified in not giving effect to the terms of the Agreement;

ii) Whether the Commission has the power under the CPA to direct refund of amount deposited by the Consumer with interest; and

iii) Whether the reliefs granted by the Commissioner require any modification to serve ends of justice.

Issue 1

The Bench after referring to several precedents held that the Commission was correct in its approach in holding that the clauses of the agreement were one-sided and the Consumer is not bound to accept the possession of the apartment and can seek a refund of the amount deposited by her.

Issue 2

The Court while examining this issue, held that the Consumer Protection Act and the RERA Act neither exclude nor contradict each other. Infact, they are concurrent remedies operating independently and without primacy.

Further, the Bench held that the power to direct refund of the amount and to compensate a consumer for the deficiency in not delivering the apartment as per the terms of the Agreement is within the jurisdiction of the Consumer Courts.

"A consumer invoking the jurisdiction of the Commission can seek such reliefs as he/she considers appropriate. A consumer can pray for refund of the money with interest and compensation. The consumer could also ask for possession of the apartment with compensation. The consumer can also make a prayer for both in the alternative. If a consumer prays for refund of the amount, without an alternative prayer, the Commission will recognize such a right and grant it, of course subject to the merits of the case. If a consumer seeks alternative reliefs, the Commission will consider the matter in the facts and circumstances of the case and will pass appropriate orders as justice demands. This position is similar to the mandate under Section 18 of the RERA Act," the Court noted.

The Court further opined that the Commission rightly exercised its powers and jurisdiction in passing the directions of refund of the amount with interest.

Issue 3

The Court noted that in the appeal filed by the Consumer, her Counsel has prayed that the payment of interest must be from the date of payment of each installment, and rate of interest must be 24% p.a.

While the Appellant – Developer has argued that the period for interest should be linked to the estimated date of possession and not the date of payments and the rate of interest must be at the rate provided under the Interest Act.

The Bench in this context held that the interest payable on the amount deposited be restitutionary and also compensatory, interest has to be paid from the date of deposits of the amounts.

The Court also held that the interest of 9% p.a. granted by the Commission is fair and just and does not warrant interference by the Court for enhancement of interest.

In the light of these observations, the Court dismissed the appeal filed by the Appellant–Developer and partly allowed the appeal filed by the Consumer.

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