NCDRC Directs Developer To Refund Money To Homebuyer Ruling That They Cannot Be Made To Wait Indefinitely For Possession [Read Judgment]

The National Consumer Disputes Redressal Commission (NCDRC) on September 6, 2019, in the case of Alok Kumar v. M/S. Golden Peacock Residency Private Limited & Anr. has directed real estate developer to refund Rs 4.12 cr. with interest to the homebuyer for failing to handover the possession of building unit within due time.

The direction was issued by NCDRC after ruling that homebuyers cannot be made to wait indefinitely for possession of building unit.

NCDRC was hearing a complaint filed by one Alok Kumar under Section 21 (a) (i) of the Consumer Protection Act, 1986, against the developer Golden Peacock Residency Pvt. Ltd. and the construction company Homestead Infrastructure Development Pvt. Ltd.

The complainant Alok Kumar submitted that he was residing in Tokyo, Japan and was looking for an accommodation in India, when he came across the Developer's advertisement of a residential project "Michael Schumacher World Tower" in sector 109, Gurgaon.

It was Alok Kumar's contention that after being 'lured by the advertisement', he booked an apartment in the residential project in 2012, and paid a total amount of Rs. 4,12,98,926/- by 2015. He also pleaded that he obtained a home loan of Rs. 2,61,28,926/- @ 10.10% per annum in order to make the payment.

According to the 'Flat Buyer's Agreement' executed between the Developer and Alok Kumar, the possession of the apartment was to be delivered within 36 months with an additional grace period of six months from the date of execution of the Agreement, which ended on 19 August 2016.

It was averred by Alok Kumar that construction work had stopped since 2015. The Developer informed the complainant that the work had slowed down since the contract with Homestead Infrastructure, the construction company, stood terminated. However, the complainant was assured that a new construction company would complete the balance work and he shall receive the possession in terms of the Agreement.

Despite repeated assurances, the construction work wasn't completed even till 2018, when Alok Kumar visited the site and found it locked. More than 6 months had passed since the extended date of possession and yet an exact date of delivery was not given by the Developer. Thereafter, the complainant issued a legal notice to the Developer as well as the construction company, seeking the exact date of possession of the apartment, but the same was received back with postal remarks "refused" and "left".

Vexed with the attitude of the Developer and the construction company, the Complainant approached the Commission.

The NCDRC placed reliance on the Supreme Court judgment in Kolkata West International City Pvt. Ltd. v. Devasis Rudra, II (2019) CPJ 29 (SC), wherein the apex court had held that “..........It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession.”

The Commission also referred to the judgment in Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, II (2009) CPJ 34 (SC) to conclusively hold that “In the instant case also the Complainants cannot be made to wait indefinitely for possession of the unit, as the construction is yet to be completed even after a period of more than 6 years has lapsed from the date of booking.”

In view of the above, the Commission directed the Developer to refund Rs. 4,12,98,926/- with interest to Alok Kumar, till the date of realisation. The NCDRC said that the interest was awarded for the interest paid by the complainant on the home loan availed, and for also undergoing 'mental agony and monetary loss'. Furthermore, the Commission also imposed costs of 25,000/- on the developer, and disposed of the appeal.

[Read Judgment]