SUMAN JINDAL & ANR. versus M/S ADARSH DEVELOPERS

Citation: [2019] 7 S.C.R. 154 · Decided: 25-04-2019 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 7 S.C.R.
SUMAN JINDAL & ANR.
v.
M/S ADARSH DEVELOPERS
(Civil Appeal No. 4284 of  2019)
APRIL 25, 2019
[DR. DHANANJAYA Y CHANDRACHUD AND
HEMANT GUPTA, JJ.]
Consumer Disputes:
Cancellation of allotment of housing apartment  – By
developer of the property  –  On the ground that the allottee had
failed to pay 25% of the total cost of the flat  –  Complaint before
State Consumer Commission – Dismissed – Order affirmed by
National Consumer Commission – On appeal, held: It is evident
from the records that the booking amount was reduced to 15% from
25% of the agreed sale consideration – The allottee had paid the
amount which was in excess of 15% of the booking amount – Hence
the termination of allotment was misconceived – Section 4 of
Karnataka Ownership Flats Act also casts an obligation on the
developer, while receiving advance payment, to enter into a written
agreement for sale – Karnataka Ownership Flats (Regulation of
the Promotion of Construction, Sale, Management and Transfer)
Act, 1972  – s. 4.
Allowing the appeal, the Court
HELD : 1. Though initially the booking amount was to be
25% of the agreed sale consideration, the correspondence
between the parties indicates that there was an agreement to
reduce this to 15%. This is reflected in the email addressed by
the appellant following a personal meeting on 21 February 2008
and the categoric acceptance of this position in response, by the
developer on 22 February 2008. That apart, the subsequent email
of the developer dated 26 May 2008 clearly indicates that 15%
represented the booking amount payable for the flat. It is not in
dispute that if the booking amount is computed at the rate of
15% of the agreed sale consideration, what was paid by the
   [2019] 7 S.C.R. 154
154
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appellant (Rs 6,50,000) was in fact in excess of the booking
amount. Hence the entire basis on which the termination of the
allotment took place was misconceived.  [Para 15] [160-B-C]
2. That apart, the appellants had all along been insisting on
the execution of the agreement to sell so as to facilitate the
disbursement of the loan which had been sanctioned by the bank.
Section 4 of the Karnataka Ownership Flats (Regulation of the
Promotion of Construction, Sale, Management and Transfer) Act,
1972 casts an obligation on the developer, while receiving advance
payment, to enter into a written agreement for sale. The
insistence of the appellants on the developer doing so was,
therefore, consistent with the statutory obligation cast on the
respondent. This cannot be regarded as unreasonable or as a
breach of the contractual obligations. In this background, the
SCDRC and the NCDRC were not justified in rejecting the primary
relief which was sought by the appellants in terms of the fulfillment
of the agreement. [Paras 16 and 17] [160-D-E; H; 161-A-B]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4284
of 2019.
From the Judgment and Order  dated  18.01.2013 of the National
Consumer Disputes Redressal Commission in Appeal No. 86 of 2010.
Rajesh Mahale, Adv. for the Appellants.
Balaji Srinivasan, Ms. Garima Jain, Ms. Pallavi Sengupta, Siddhant
Kohli, Mrs. Lakshmi Rao, Advs. for the Respondent.
The Judgment of the Court was delivered by
DR. DHANANJAYA Y. CHANDRACHUD, J.
1. Leave granted.
2. This appeal arises from a decision of the National Consumer
Disputes Redressal Commission1 dated 18 January 2013.
3. The dispute in the present case relates to a residential apartment
which the appellants booked with the respondent who is the developer.
The respondent had launched a construction project called “Adarsh Palm
Retreat” situated at Bhoganhalli Village, Varthur Hobli, Bangalore East
Taluk, Bangalore. The appellants booked an apartment which was split
1 “NCDRC”
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SUPREME COURT REPORTS
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into two, bearing no. X 903 (a)  and (b).  Though the dispute between
the parties relates to the above flat, it is necessary to advert to the fact
that on 2 November 2004 the appellants had also booked  flat F 703 for
which the respondent had issued a letter of allotment.  The price of that
flat was Rs 32.28 lakhs.  An agreement to sell was entered into on 1
February 2005.
4. The dispute in the present case arises out of two letters of
allotment issued by the respondent to the appellants in respect of flat X
903 (a) and (b).  The agreed sale consideration was Rs 40,95,801.  The
letter of al
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