WEST INTERNATIONAL CITY PVT LTD versus DEVASIS RUDRA

Citation: [2019] 2 S.C.R. 1070 · Decided: 25-03-2019 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Disposed off

Judgment (excerpt)

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1070                    SUPREME COURT REPORTS            [2019] 2 S.C.R.
KOLKATA WEST INTERNATIONAL CITY PVT LTD
v.
DEVASIS RUDRA
(Civil Appeal No. 3182 of 2019)
MARCH 25, 2019
[DR. DHANANJAYA Y CHANDRACHUD AND
HEMANT GUPTA, JJ.]
Consumer Protection Act, 1986:
Housing – Failure to deliver possession – Buyer having
claimed compensation from the developer, entitled to seek refund
amount or estopped from doing so – On facts, in terms of the buyer’s
agreement, developer was to handover possession to the buyer by
the stipulated date with a grace period of further six months –
However, failure of developer to deliver the possession of houses –
Complaint by the buyer seeking possession of houses and in
alternate for refund of the amount paid to developer with 12%
interest p.a. and compensation of Rs.20 lakhs – Order by the State
Commission directing the developer to refund the amount with 12%
interest p.a. and compensation of Rs 5 lakhs – However,
compensation amount reduced to Rs. 2 lakhs by the National
Commission – On appeal, held: In the buyer’s agreement, for default
on the part of the buyer, the buyer liable to pay interest at the rate
of 18% p.a., however, for default on the part of the developer, the
developer liable to pay interest only at the savings bank rate
prescribed by the SBI – Agreement being one sided, would not
preclude the right and remedy available to the buyer to claim
reasonable interest or compensation – Buyer can be expected to
wait for possession for a reasonable period – It would be
unreasonable to construe the contract between the parties as
requiring the buyer to wait indefinitely for possession – Completion
certificate was received nearly seven years after the extended date
for the handing over of possession which was not at all reasonable
– Thus, the orders passed by the forum below for refund justified –
Rate of interest payable by the developer to the buyer modified to
9% p.a. instead of 12% p.a. – Interest.
[2019] 2 S.C.R. 1070
1070
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1071
Disposing of the appeal, the Court
HELD: 1.1 Under the Agreement clause, any delay beyond
30 June 2009 would result in the developer being required to
pay interest at the prevailing savings bank interest of the State
Bank of India. Interestingly, where the buyer is in default, the
agreement stipulates that interest at the rate of 18 per cent from
the date of default until the date of payment would be charged for
a period of two months, failing which the allotment would be
cancelled by deducting 5% of the entire value of the property.
The agreement was evidently one sided. The clause will not
preclude the right and remedy available to the buyer to claim
reasonable interest or, as the case may be, compensation.
[Para 10][1074-A-D]
1.2 In terms of the Buyer’s agreement, the date for handing
over possession was 31 December 2008, with a grace period of
six months. Even in 2011, when the buyer filed a consumer
complaint, he was ready and willing to accept possession. It would
be manifestly unreasonable to construe the contract between the
parties as requiring the buyer to wait indefinitely for possession.
By 2016, nearly seven years had elapsed from the date of the
agreement. Even according to the developer, the completion
certificate was received on 29 March 2016. This was nearly seven
years after the extended date for the handing over of possession
prescribed by the agreement. A buyer can be expected to wait
for possession for a reasonable period. A period of seven years
is beyond what is reasonable. Hence, it would have been
manifestly unfair to non-suit the buyer merely on the basis of the
first prayer in the reliefs sought before the SCDRC. There was
in any event a prayer for refund. [Para 11][1074-E-G]
1.3 In the circumstances, the orders passed by the SCDRC
and by the NCDRC for refund of moneys were justified. Having
regard to all the facts and circumstances of the case, the order of
the NCDRC is modified by directing that the appellant would pay
interest at the rate of 9% per annum to the respondent
instead and in place of 12% as directed by the NCDRC.
[Para 12, 13][1075-A]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3182
of 2019.
From the Judgment and Order dated 21.11.2016 of the  National
Consumer Disputes Redressal Commission, New Delhi in  First Appeal
No. 958 of 2016.
KOLKATA WEST INTERNATIONAL CITY PVT LTD v.
DEVASIS RUDRA
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