Summary
In cross-appeals from an NCDRC order directing a development authority to refund a flat buyer's deposit with 9% interest from the date of complaint, the Supreme Court upheld the NCDRC's findings on limitation and pecuniary jurisdiction, held that an offer of possession without a completion certificate and fire clearance was invalid, and, finding lapses on both sides, kept interest running from the complaint date but awarded Rs. 15 lakh additional compensation and return of the stamp papers.
Issues
- Whether the consumer complaint was barred by limitation under Section 24A of the Consumer Protection Act, 1986, given the earlier offer of possession, later demands and reminders and the authority's acceptance of part payment.
- Whether the NCDRC had pecuniary jurisdiction although the amount deposited was below Rs. 1 crore.
- Whether an offer of possession made without a completion certificate and firefighting clearance is a valid offer.
- Whether the buyer was entitled to interest on the refund from the dates of deposit rather than from the date of the complaint.
Provisions considered
- Section 24A, Consumer Protection Act, 1986The authority argued that the two-year limitation for complaints ran from its offer of possession; the Court held the complaint was within time because of the authority's later reminders and its acceptance of part payment without reservation. (¶¶ 16, 17)
- Sections 18 and 19, Limitation Act, 1963The Court agreed that the NCDRC correctly applied these provisions, under which acknowledgment of liability in writing and payment on account give a fresh period of limitation, so the cause of action continued and the complaint was in time. (¶¶ 16, 17)
- Section 21(a)(i), Consumer Protection Act, 1986The Court held that pecuniary jurisdiction depends on the aggregate relief sought, including compensation for mental agony, harassment and loss of income, not merely the amount deposited; as the claim exceeded Rs. 1 crore, the NCDRC had jurisdiction. (¶ 19)
- Section 19(10), Real Estate (Regulation and Development) Act, 2016Read with Section 4(5) of the UP Apartment Act, the Court treated this provision, which ties the allottee's duty to take possession to the occupancy certificate, as requiring the certificates before possession is offered, and held the authority's offer without them was incomplete and legally invalid. (¶¶ 14, 20, 22)
- Section 4(5), Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010Relied on by the Court as requiring the developer to obtain the completion certificate and related clearances before offering possession. (¶¶ 14, 20)
Held
- The complaint was not barred by limitation: the authority's subsequent reminders and its acceptance of the buyer's part payment without reservation extended limitation under Sections 18 and 19 of the Limitation Act, so the cause of action continued. (¶¶ 16, 17)
- In consumer disputes the value of the claim, for pecuniary jurisdiction, is the aggregate relief sought, including compensation and other claims, and not only the amount deposited; the NCDRC rightly assumed jurisdiction. (¶ 19)
- An offer of possession made without the completion certificate and firefighting clearance certificate is invalid; following Debashis Sinha v. R.N.R. Enterprise, Pioneer Urban Land and Treaty Construction, a purchaser cannot be compelled to take possession in such circumstances, and the failure to obtain the certificates, which were not produced even before the NCDRC, is a deficiency in service justifying refusal of possession. (¶¶ 20, 21, 22)
- Since the buyer delayed paying the additional demand for about five years while seeking waiver of interest, it would be inequitable to award interest from the original dates of payment; interest from the date of complaint was maintained. (¶¶ 17, 18, 22)
- Balancing the lapses of both parties, the Court awarded Rs. 15 lakh compensation in addition to the NCDRC's award and declined exemplary costs, noting that the authority is a non-profit civic body that should not be unduly penalised. (¶¶ 22, 23, 24)
Result
Buyer's appeals disposed of: in addition to refund of the deposit with 9% interest from the date of complaint as ordered by the NCDRC, the authority to pay Rs. 15 lakh additional compensation within three months and return the non-judicial stamp papers worth Rs. 3,99,100; authority's appeal dismissed; no exemplary costs.