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Supertech Ltd. v. Rajni Goyal .
Factual and Procedural Background
The appellant–builder launched a residential project named “Capetown” in Sector 74, Noida. On 22 May 2012, it allotted Flat No. 1606 to the respondent–purchaser with a stipulated possession date of 31 October 2013, extendable by six months for unforeseen events. The agreement contemplated escalation charges for construction cost fluctuations and maintenance charges commencing from the “Letter of Offer of Possession.”
The builder failed to hand over possession by the scheduled date and issued a Pre-Possession Letter on 12 October 2015 demanding ₹12,35,656/- (balance price, maintenance, labour welfare, water connection, escalation, etc.) to be paid by 11 November 2015. The respondent did not comply and, on 15 March 2017, filed Consumer Complaint No. 708 of 2017 before the National Consumer Disputes Redressal Commission (“the Commission”) challenging the Pre-Possession Letter, contending that the builder lacked an Occupancy Certificate and disputing the demanded charges.
By order dated 07 February 2018, the Commission partly allowed the complaint: it upheld only specific charges and awarded the purchaser simple interest at 8% p.a. from 01 November 2013 until possession was actually offered, as compensation for delay. The builder’s Review Application No. 94 of 2018 was dismissed on 22 March 2018. Aggrieved, the builder filed the present civil appeals in the Supreme Court under Section 23 of the Consumer Protection Act, 1986.
Legal Issues Presented
- Whether the Commission correctly determined the period for which the builder must pay compensatory interest to the purchaser for delayed possession, or whether the contractual six-month grace period and subsequent events warranted a different computation window.
- Whether the Commission’s partial affirmation of various charges demanded in the Pre-Possession Letter required modification (though ultimately only the interest period was contested before the Court).
Arguments of the Parties
Builder’s Arguments
- Possession was offered in December 2015 after obtaining the Completion Certificate.
- Delays were caused by legal impediments, including orders of the National Green Tribunal; hence, the contractual six-month grace period must be honoured, shifting the start of liability from 01 November 2013 to 01 May 2014.
- The Full Occupancy Certificate was obtained by April 2016 (a fact admitted by the purchaser); therefore, interest liability should cease on 30 April 2016, as any further delay stemmed from the purchaser’s failure to take possession.
The opinion does not contain a detailed account of the purchaser’s legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Supreme Court examined the contractual terms and the factual timeline. It acknowledged that the agreement allowed a six-month grace period beyond 31 October 2013, moving the starting point for delay-based compensation to 01 May 2014. The Court accepted the builder’s contention that a Full Occupancy Certificate had been secured by April 2016, after which the purchaser’s continued refusal to take possession could not be attributed to the builder.
Consequently, the Court concluded that compensatory interest should run only from 01 May 2014 to 30 April 2016, not until the eventual offer or acceptance of possession. Apart from adjusting this period, all other directions of the Commission, including validation of specific charges, were left undisturbed.
Holding and Implications
Order Modified and Appeals Disposed of.
The Court limited the builder’s liability for compensatory interest to the period between 01 May 2014 and 30 April 2016 at the rate fixed by the Commission. All other aspects of the Commission’s decision remain intact. The ruling affects only the parties to the dispute and sets no new precedent beyond affirming the contractual grace period’s applicability to delay-compensation calculations.
Indu Malhotra, J.:— The present Civil Appeals have been filed under Section 23 of the Consumer Protection Act, 1986 to challenge the Judgment and Order dated 22.03.2018 in Review Application No. 94 of 2018 and the Judgment and Order dated 07.02.2018 in Consumer Complaint No. 708 of 2017 passed by the National Consumer Disputes Redressal Commission at New Delhi.
2. The factual matrix of the present case, briefly stated, is as under:
2.1. The Appellant - Builder was developing a project named ‘Capetown’ in Sector 74, Noida. The Respondent - Purchaser booked a residential flat with the Appellant - Builder in the said project.
2.2. On 22.05.2012, the Appellant - Builder vide Allotment Letter allotted Flat No. 1606 to the Respondent - Purchaser. As per the Allotment Letter, possession would be handed over in October 2013. This period could be extended due to unforeseen circumstances by a maximum of 6 months.
The Agreement also provided for escalation charges if there was any fluctuation in the price of construction materials and/or labour costs during the course of construction, payable by the Respondent - Purchaser.
The Agreement provided for payment of maintenance charges by the Respondent - Purchaser for maintenance and upkeep of the complex. These maintenance charges were payable from the date of issuance of a ‘Letter of Offer of Possession’.
2.3. The Appellant - Builder was not able to hand over possession of the flat in October 2013 as per the Allotment Letter dated 22.05.2012.
2.4. The Appellant - Builder issued a Pre-Possession Letter on 12.10.2015 to the Respondent - Purchaser for completion of formalities, before possession could be handed over. The Pre-Possession Letter stated that upon completion of formalities as specified in the Letter, possession of the flat would be offered to the Respondent - Purchaser. The Respondent - Purchaser was called upon to pay Rs. 12,35,656/- towards the balance cost of the flat, maintenance charges, labour welfare charges, water connection charges, escalation costs, etc. The Respondent - Purchaser was called upon to deposit the charges on or before 11.11.2015.
2.5. The Respondent - Purchaser failed to pay the charges demanded as per the Pre-Possession Letter by the Appellant - Builder.
2.6. That after over 15 months, on 15.03.2017, the Respondent - Purchaser filed a Consumer Complaint under Section 21(a)(i) of the Consumer Protection Act, 1986 before the National Consumer Disputes Redressal Commission [hereinafter referred to as “the Commission”]. The Respondent - Purchaser challenged the Pre-Possession Letter on the ground that on the date of issuance of the Pre-Possession Letter, the Appellant - Builder had not obtained the Occupancy Certificate. The Respondent - Purchaser also challenged the various charges demanded by the Appellant - Builder in the Pre-Possession Letter.
2.7. The Commission vide Judgment and Order dated 07.02.2018, partly allowed the Consumer Complaint of the Respondent - Purchaser.
The Commission held that out of the charges mentioned in the Pre-Possession Letter dated 12.10.2015, the Appellant - Builder was entitled to payment of the following amounts -
i) An amount of Rs. 3,166/- towards interest on delayed payment.
ii) Water connection charges if paid to the concerned Authority, on proportionate basis subject to furnishing proof of such payment, in terms of this order.
iii) Labour welfare charges subject to furnishing proof and computation with respect to the said charges in terms of this order.
iv) Escalation charges + service tax amounting to Rs. 3,88,797.19/-
However, the Commission held that since there was a delay in handing over possession of the flat to the Respondent - Purchaser, the Appellant - Builder was liable to pay Interest to the Respondent - Purchaser by way of compensation. The scheduled date for handing over possession was 31.10.2013. The Appellant - Builder had issued the Pre-Possession Letter on 31.10.2015. As per the Respondent - Purchaser, the Appellant - Builder did not have the Occupancy Certificate on that date.
The Commission directed the Appellant - Builder to pay compensation in the form of Simple Interest @8% p.a. from 01.11.2013 till the date on which possession was actually offered to the Respondent - Purchaser.
2.8. Aggrieved by the Order dated 07.02.2018, the Appellant - Builder filed a Review Petition. The said Review Petition was dismissed by the Commission vide Order dated 22.03.2018.
2.9. Aggrieved by the Order passed by the Commission in the Consumer Complaint as also in the Review Petition, the Appellant - Builder has preferred the present Civil Appeals before this Court under Section 23 of the Consumer Protection Act, 1986.
3. We have heard the Counsel for the parties, and perused the pleadings of the case.
4. The Appellant - Builder inter alia submitted that -
Possession of the flat was offered to the Respondent - Purchaser in December 2015 after obtaining the Completion Certificate for the building.
Even though the Agreement provided for delivery of possession by 31.10.2013, the delay occurred because of various legal impediments in timely completion of the project because of various Orders passed by the National Green Tribunal. The delay ought to be computed from 6 months after 31.10.2013, i.e. from 01.05.2014 by taking into consideration, the 6 months grace period provided in the Agreement.
Furthermore, the period of Interest should close on April 2016 when the Full Occupancy Certificate was obtained as per the admission of the Respondent - Purchaser herself in Para 4(j) of the Consumer Complaint, wherein she has admitted that the Appellant - Builder had obtained the Completion Certificate as late as April 2016. The Respondent - Purchaser could not have any further grievance after April 2016 with respect to delay in handing over possession. The Respondent - Purchaser ought not to be allowed to reap the benefits of her own delay in taking possession.
5. In light of the aforesaid discussion, the period of compensation of Interest must be computed from 01.05.2014 till 30.04.2016 at the rate awarded by the Commission.
6. The Order of the Commission is modified only to the extent mentioned hereinabove.
7. The Appeals are disposed of accordingly.
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