Buyers Triumph in Delayed Possession: Supreme Court Orders Full Refund.
22 February 2024
Consumer Complaints >> Civil & Consumer Law | Consumer Protection Act >> Consumer Rights
In recent legal proceedings between Venkataraman Krishnamurthy & Another v/s Lodha Crown Buildmart Pvt. Ltd. before the National Consumer Disputes Redressal Commission (NCDRC), a case involving a prominent real estate developer and aggrieved homebuyers underscored the complexities of contractual obligations and consumer rights in India’s evolving real estate landscape. Consumer Complaint No. 35 of 2018, stemming from an agreement to purchase a luxurious apartment in Mumbai’s New Cuffe Parade, Wadala, culminated in a pivotal decision on November 9, 2022, which has sparked significant legal debate.
The case, initiated by the complainants against the respondent-company, revolves around allegations of non-delivery of possession within stipulated timelines and subsequent termination of the purchase agreement. The complainants sought a refund of Rs. 2,25,31,148 along with accrued interest, citing breach of contract and undue delay in possession of the property.
The crux of the dispute lies in the interpretation of clauses within the Agreement to Sell executed between the parties in November 2013. As per the agreement, the respondent-company was obliged to deliver possession of the apartment for fit-outs by June 30, 2016, extendable to June 30, 2017, with a grace period. However, the respondent allegedly failed to meet these deadlines, prompting the complainants to issue a legal notice and subsequently file a consumer complaint before the NCDRC. In its order, the NCDRC directed the respondent to deliver physical possession of the unit within three months and pay delay compensation at 6% per annum on the amount paid by the complainants. Additionally, it allowed the complainants the option to seek a refund, subject to deduction of earnest money as per the agreement's provisions.
Discontent with the NCDRC’s decision, the complainants pursued a statutory appeal, asserting their right to terminate the agreement outright and claim a full refund of the amount paid. The appeal highlighted the precise legal definitions and obligations outlined in the agreement, particularly concerning possession and occupancy certificates. The appellate authority, in its ruling, emphasized the sanctity of contractual terms and the parties’ obligations therein. It underscored that the NCDRC had overstepped its jurisdiction by deviating from the agreed terms and conditions of the contract. The appellate bench stressed that the right of the complainants to terminate the agreement was absolute, given the respondent’s failure to deliver possession within the agreed timelines.
This case sets a significant precedent in consumer protection and contract law, emphasizing the importance of adhering to contractual obligations and protecting consumer rights. It highlights the need for clarity and transparency in real estate transactions, ensuring that developers adhere to promised timelines and deliverables as outlined in purchase agreements. Moreover, it underscores the role of judicial review in upholding contractual sanctity and protecting consumer interests against potential breaches by developers. The decision reaffirms the principle that contractual terms agreed upon by parties should be strictly adhered to and not arbitrarily altered or interpreted, thereby safeguarding the rights of consumers in the real estate sector.
As the legal landscape continues to evolve, cases like Consumer Complaint No. 35 of 2018 serve as crucial benchmarks in defining the boundaries of consumer rights and developer responsibilities. The appellate decision highlights the judiciary’s role in upholding contractual integrity and ensuring fair redressal for consumers in disputes involving significant financial investments. Moving forward, it is imperative for stakeholders in the real estate sector to uphold transparency, accountability, and adherence to contractual obligations to foster trust and confidence among homebuyers. In essence, while the case underscores the complexities and challenges within the real estate sector, it also reaffirms the judiciary's commitment to safeguarding consumer interests and upholding the rule of law in contractual disputes.
Consumer Protection Act, 1986