29 July 2024 Civil Appeals >> Civil & Consumer Law   |   Consumer Protection Act >> Consumer Rights  

In a recent legal development, an appeal was filed challenging the order dated 29th September 2022, issued by the National Consumer Disputes Redressal Commission (NCDRC) in New Delhi. This order, concerning Consumer Case No. 1557 of 2016, had directed the respondent, M/s Parsvnath Developers Limited, to refund the entire amount deposited by the complainants-appellants along with interest at the rate of 9% per annum. The respondent was required to complete the refund within two months from the date of the order.

Background of the Case:

The case revolves around a residential project, Parsvnath Paramount, launched by Parsvnath Developers in 2008. The complainants booked a 3BHK flat in this project and made substantial payments amounting to Rs. 1,30,62,971 between July 2008 and December 2013. Despite these payments, which covered nearly 95% of the total sale price, there were significant delays in the project’s completion.

Key issues arose when the developer transferred the complainants' initially allotted flat to a different unit and failed to meet the construction deadlines stipulated in the agreement. By June 2015, the complainants discovered that construction had stalled entirely.

Legal Proceedings:

The complainants, having received no satisfactory responses to their multiple inquiries about the project's status and compensation for delays, approached the NCDRC. They sought a full refund of the amount paid along with compensation for the inconvenience caused, claiming a total amount of Rs. 1,37,36,350 plus interest at 24% per annum.

The NCDRC's decision partly favored the complainants, ordering a refund with 9% interest per annum. This decision was contested by the complainants, who argued that the interest awarded was insufficient given the terms of their agreement, which stipulated higher rates for delays caused by them.

Appeal and Court's Findings:

The appeal contested the Commission’s decision on the interest rate. The complainants' counsel argued that the interest awarded should match the higher rate specified in the agreement, which was 24% per annum, due to the inordinate delay caused by the developer.

On the other hand, the developer's counsel contended that the delay was due to external factors, including issues with the Delhi Development Authority's approval process, which should be covered under a force majeure clause. However, this argument was countered by referencing a precedent case, DLF Home Developers Limited vs. Capital Greens Flat Buyers Association, which ruled that such delays do not necessarily invoke force majeure protections.

Court's Decision:

The court upheld the NCDRC's direction to refund the amount paid by the complainants. However, it modified the interest rate awarded, arguing that the rate of 9% was inadequate given the agreement's terms. The court determined that an interest rate of 12% per annum, as stipulated in the agreement for delays caused by the developer, was more appropriate.

Thus, the court directed that the refund be made with interest at the revised rate of 12% per annum, effective from the date of each deposit until the refund date. The developer was given three months to complete this payment.

Conclusion:

This appeal underscores the importance of adhering to contractual terms and the need for fair compensation for undue delays in project completion. The revised interest rate aims to provide a more equitable remedy to the complainants, aligning with the contractual provisions and acknowledging the substantial inconvenience faced due to the developer's delays.

  COMPANIES ACT, 2013