R V PRASANNAKUMAAR & ORS. versus MANTRI CASTLES PVT. LTD & ANR.

Citation: [2019] 5 S.C.R. 821 · Decided: 11-02-2019 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Disposed off

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
821
R V PRASANNAKUMAAR & ORS.
v.
MANTRI CASTLES PVT. LTD & ANR.
(Civil Appeal No. 1232 of 2019)
FEBRUARY 11, 2019
[DR. DHANANJAYA Y CHANDRACHUD AND
HEMANT GUPTA, JJ.]
Consumer Protection Act, 1986: Interest – Award of –
Justification – On facts, breach of flat purchase agreement – Outer
date for handing over possession was 31.01.2014, however the
buyers received occupation certificate on 10.02.2016 – Consumer
complaint – Award of compensation by the National Consumer
Disputes Redressal Commission for delayed handing over of
possession from 01.02.2014 till 31.07.2016 as per the agreement,
at the rate of INR 3 per sq. ft. per month – National Commission
also awarded interest at the rate of 6 per cent per annum –
Justification of – Held: Compensation at the rate of 3 per sq. ft. per
month does not provide just or reasonable recompense to the flat
purchaser who has invested money and that too in a city like
Bangalore – Jurisdiction of the NCDRC to award just compensation
cannot be constrained by the terms of the agreement – There was a
delay of at least two years in handing over the possession – Thus,
the award of interest at the rate of 6 per cent is reasonable and
justified – Liability of the developer to pay interest would continue
to operate until the date the respective flat purchasers is offered
possession – Furthermore, the flat purchasers who had moved
NCDRC in a representative capacity for redressal of their grievances
not disentitled to receive possession of the flat.
Allowing C.A. No. 1232 of 2019 and dismissing C.A.Nos.
1443-1444 of 2019, the Court
HELD: 1.1 The view of the National Consumer Disputes
Redressal Commission-NCDRC that the rate which has been
stipulated by the developer, of compensation at the rate of 3 per
sq. ft. per month does not provide just or reasonable recompense
to a flat buyer who has invested money and has not been handed
   [2019] 5 S.C.R. 821
821
A
B
C
D
E
F
G
H
822
SUPREME COURT REPORTS
[2019] 5 S.C.R.
over possession as on the stipulated date of 31 January 2014, is
accepted. This in a city such as Bangalore does not provide just
or adequate compensation. The jurisdiction of the NCDRC to
award just compensation under the provisions of the Consumer
Protection Act, 1986 cannot in the circumstances be constrained
by the terms of the agreement. The agreement in its view is one
sided and does not provide sufficient recompense to the flat
purchasers. [Para 9][825-D-F]
1.2 The outer date for handing over possession was 31
January 2014. The admitted facts indicate that the occupation
certificate was received on 10 February 2016. Consequently,
there was a delay of at least two years since possession could not
have been handed over prior to obtaining the occupation
certificate. In the circumstances, the award of interest at the rate
of 6 per cent is reasonable and justified. The NCDRC however,
came to the conclusion that interest should be awarded only for
the period from 1 February 2014 to 31 July 2016. There is merit
in the submission of the flat buyers that the liability to pay interest
has been inappropriately confined only upto 31 July 2016. The
developer, in the affidavit by way of evidence of its representative
before the NCDRC, admitted that as many as 43 complainants,
who had asked for possession were not given possession for the
simple reason that they had moved the NCDRC in a consumer
complaint. The fact that the flat purchasers had moved the NCDRC
in a representative capacity for the redressal of their grievances
is no justification to deny them possession in accordance with
the terms of the agreement. [Para 10-13][825-G-H; 826-A-C; F]
1.3 It emerges that even according to the developer, out of
55 flat purchasers, possession had been handed over to 16 and it
was stated that possession to 9 more buyers would be offered
within a period of one week. As amongst the 55 purchasers, 25
persons have been now offered possession and an additional 2
would be offered possession shortly hereafter. [Paras 15, 16]
[827-D-F]
1.4 The NCDRC was not justified in proceeding on the basis
that the liability to pay interest would cease to operate as on 31
July 2016. Since possession has not been handed over, the
developer cannot avoid the liability to pay interest at the rate
A
B
C
D
E
F
G
H
823
awarded by the NCDRC until the date when possession is actually
handed over. The liability of the developer to pay interest at the
rate of 6 per cent per annum would continue to operate until the

Excerpt shown. Read the full judgment & AI analysis in Lexace.