NCDRC holds Sushma Buildtech Liable for deficiency in service

24 Jun 2024 CW Team

The State Commission ruled in favour of the complainant, ordering the builder to compensate at the rate of ?5 per sq. ft. per month of the flat's super area from the stipulated delivery date until possession, along with 6% annual simple interest on the deposited amount of Rs 5.43. Additionally, litigation costs of Rs 65,000 were awarded. Aggrieved by this decision, the builder appealed to the National Commission. The builder contended that the complaint lacked pecuniary jurisdiction, arguing that the complainants, who owned another property and purchased the flat for speculative purposes, did not qualify as 'consumers' under the law. The builder denied any service deficiency, citing project development challenges such as labour shortages, sand scarcity, and demonetization. They maintained that all necessary approvals were in place as stipulated in the Apartment Buyer's Agreement. The NCDRC observed that the complainants had paid Rs 6.42 million towards the flat, as evidenced by receipts. Despite fulfilling their financial obligations, the builder failed to meet the possession deadline agreed upon in the contract. Emphasising the rights of homebuyers, the commission referenced precedents such as Emmar MGF Land Ltd. & Ors. Vs. Amit Puri and Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan, affirming that buyers have the right to seek compensation for possession delays.

Modifying the State Commission's order, the National Commission directed the builder to pay 6% simple interest on the deposited amount of Rs 6.42 million from the date the flat was due for possession until delivery. Additionally, Rs 100,000 was awarded to the complainants for litigation expenses.

(Source: Live Law)

The National Consumer Disputes Redressal Commission (NCDRC), under the presidency of AVM J. Rajendra, ruled that builders cannot compel buyers to accept possession of property after significant delays. The commission affirmed the buyer's right to either accept delayed possession or seek appropriate compensation. The complainant had booked a flat with Sushma Buildtech, and a Flat Buyers Agreement was executed specifying possession within 30 months (24 months plus a 6-month grace period). Despite receiving 97% of the sale price, the builder failed to deliver possession within the agreed timeframe. Dissatisfied with the delay, the complainant filed a consumer complaint with the Punjab State Commission, seeking relief. The State Commission ruled in favour of the complainant, ordering the builder to compensate at the rate of ?5 per sq. ft. per month of the flat's super area from the stipulated delivery date until possession, along with 6% annual simple interest on the deposited amount of Rs 5.43. Additionally, litigation costs of Rs 65,000 were awarded. Aggrieved by this decision, the builder appealed to the National Commission. The builder contended that the complaint lacked pecuniary jurisdiction, arguing that the complainants, who owned another property and purchased the flat for speculative purposes, did not qualify as 'consumers' under the law. The builder denied any service deficiency, citing project development challenges such as labour shortages, sand scarcity, and demonetization. They maintained that all necessary approvals were in place as stipulated in the Apartment Buyer's Agreement. The NCDRC observed that the complainants had paid Rs 6.42 million towards the flat, as evidenced by receipts. Despite fulfilling their financial obligations, the builder failed to meet the possession deadline agreed upon in the contract. Emphasising the rights of homebuyers, the commission referenced precedents such as Emmar MGF Land Ltd. & Ors. Vs. Amit Puri and Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghvan, affirming that buyers have the right to seek compensation for possession delays. Modifying the State Commission's order, the National Commission directed the builder to pay 6% simple interest on the deposited amount of Rs 6.42 million from the date the flat was due for possession until delivery. Additionally, Rs 100,000 was awarded to the complainants for litigation expenses. (Source: Live Law)

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