Summary
Flat buyers in the Pride Asia project at Chandigarh, developed by Parsvnath under a development agreement with the Chandigarh Housing Board, obtained consumer orders for refund with interest and compensation for delay under clause 9(c) of the tripartite flat buyer agreement. An arbitral award between the developer and the Board, which attained finality, directed that any refund, interest or compensation payable to allottees be borne in the ratio 70:30, and the Supreme Court in an earlier appeal had held that split must be given effect. In execution, the State Commission and National Commission nonetheless fastened the entire liability for clause 9(c) compensation on the developer. The Supreme Court partly allowed the developer's appeals, holding that the compensation must be shared 70:30 between the developer and the Board as determined by the arbitrator and affirmed by this Court.
Issues
- Whether compensation payable to allottees under clause 9(c) of the flat buyer agreement is to be borne solely by the developer or shared with the Chandigarh Housing Board in the ratio 70:30 fixed by the arbitral award between them.
Provisions considered
- Execution of orders of the consumer fora, Consumer Protection Act, 1986In executing the compensation orders the State and National Commissions had to give effect to the inter se apportionment of liability settled by the final arbitral award and this Court's earlier orders, rather than fastening the whole liability on the developer. (¶¶ 2.6, 6, 7)
Held
- The arbitral award of 09.01.2015 between the developer and the Housing Board, which has attained finality, directed that any refund, interest or compensation payable to allottees be borne in the ratio 70:30; this Court's order of 21.04.2015 left the developer free to raise objections based on the award in execution, and its judgment of 17.12.2019 in Chandigarh Housing Board v. Parsvnath held that the 70:30 split must be given effect, a division also reflected in the escrow arrangement for sale proceeds. (¶ 6)
- The State Commission and the National Commission therefore seriously erred in fastening the entire liability for clause 9(c) compensation on the developer alone; the compensation is to be shared 70% by the developer and 30% by the Chandigarh Housing Board. (¶¶ 7, 8)
Result
Developer's appeals partly allowed; National Commission's common order dated 05.02.2020 in the appeal executions modified to hold the developer liable for 70% of the compensation under clause 9(c) of the flat buyer agreement and the Chandigarh Housing Board liable for the remaining 30%; the Board's appeals disposed of in those terms.