Summary
A subsequent purchaser of a delayed flat is not categorically barred from interest on a refund. The Court rejected the contrary per se rule in Raje Ram, as applied in Arifur Rahman Khan, and held that relief depends on the facts and relative equities. Here, the builder had acknowledged the transfer but still failed to deliver possession. The refund award was modified to carry interest at 9% per annum from April 2016, when the builder learnt of the transfer, rather than 10% from the original deposits.
Issues
- Whether a subsequent purchaser who steps into an original allottee’s position can receive interest on a refund for prolonged non-delivery, and from what date.
Provisions considered
- Section 2(1)(d), Consumer Protection Act, 1986Consumer protection extends beyond the immediate contracting party to approved beneficiaries; stepping into the original allottee’s position did not itself exclude this purchaser from consumer status. (¶¶ 23, 24, 25, 26, 30, 31)
Held
- The builder had not established that the environmental proceedings excused the entire delay. Its continued demands for instalments and penal interest also undermined its position that construction had been wholly prevented. (¶¶ 17, 18, 19, 20)
- The purchaser’s consumer status and entitlement to complain of deficient service were not denied. A transferee may know of an existing delay without accepting that it will continue indefinitely; reasonable expectations and relative equities must be assessed in each case. (¶¶ 23, 25, 30, 31)
- The absolute bar against interest on refunds to subsequent purchasers stated in Raje Ram and applied in Arifur Rahman Khan could not be considered good law. The nature and extent of relief remain fact dependent. (¶ 31)
- The builder was informed of this transfer in April 2016 and an occupancy certificate was still unavailable when the appeal was presented. Interest on the refunded principal was fixed at 9% annually from April 2016; the NCDRC order was modified accordingly. (¶¶ 31, 32, 33)
Result
Appeal partly allowed; refund interest modified to 9% per annum from April 2016. No order as to costs.