WG. CDR. ARIFUR RAHMAN KHAN AND ALEYA SULTANA AND ORS. versus DLF SOUTHERN HOMES PVT LTD. (NOW KNOWN AS BEGUR OMR HOMES PVT. LTD.) AND ORS.

Citation: [2020] 9 S.C.R. 136 · Decided: 24-08-2020 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Case Partly allowed

Cited by 6 judgment(s) · cites 10 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2020] 9 S.C.R.
WG. CDR. ARIFUR RAHMAN KHAN AND
ALEYA SULTANA AND ORS.
v.
DLF SOUTHERN HOMES PVT LTD. (NOW KNOWN AS
BEGUR OMR HOMES PVT. LTD.) AND ORS.
(Civil Appeal No. 6239 of 2019)
AUGUST 24, 2020
[DR. DHANANJAYA Y CHANDRACHUD AND
K. M. JOSEPH, JJ.]
Consumer Protection Act, 1986 – s.2(1)(g) – Deficiency of
service – Complaint by flat buyers seeking compensation inter alia
alleged delay in handing over possession of the flats – Dismissed
by NCDRC – On appeal, held: Failure of the developer to hand
over possession within the contractually stipulated period amounts
to a deficiency of service u/s.2(1)(g) – In the present case, under
the Apartment Buyers Agreement (ABA), the developer was obligated
to hand over possession of the flats within thirty-six months of the
date of the agreement which condition was breached – Existence
and extent of the delay constitute an admitted factual position –
There has been a gross delay on the part of the developer in
completing construction ranging between two and four years –
Further, the agreement is manifestly one-sided – Nature and quantum
of delay are such that the compensation provided in Clause 14,
ABA would not provide sufficient recompense to the purchasers –
Jurisdiction of consumer forum to award just compensation as an
incident of its power to direct removal of a deficiency in service is
not constrained by the terms of a rate prescribed in an unfair bargain
– Impugned judgment set aside – Flat buyers entitled to
compensation.
Consumer Protection Act, 1986 – s.14(1)(e) – Jurisdiction of
consumer forum – Nature and extent of – Discussed.
Consumer Protection – Flat buyers’ agreements – Delayed
possession – Award of compensation in addition to agreement –
Duty of Courts – Held: Ordinarily, courts would hold parties down
to a contractual bargain – However, cannot be oblivious to the
one-sided nature of agreements drafted by and to protect interest
of the developer.
[2020] 9 S.C.R. 136
136
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Consumer Protection Act, 1986 – s.2(1)(o) – “service” –
Meaning of – Held: ‘service’ in s.2(1)(o) means a service of any
description made available to potential users including the provision
of facilities in connection with (among other things) housing
construction.
Consumer Protection – Claim against delayed possession of
flats – Right of flat buyer to obtain deed of conveyance – Held:
Unreasonable to expect that in order to pursue a compensation
claim for delayed handing over of possession, the purchaser must
indefinitely defer obtaining a conveyance of the premises or, if they
seek to obtain a Deed of Conveyance to forsake the right to claim
compensation.
Consumer Protection – Delay in handing over possession of
residential flats – Interest in flats transferred – Compensation for
delayed possession – Entitlement of subsequent transferees –
Discussed.
Consumer Protection Act, 1986 – s.2(1)(g) – Held: Deficiency
u/s.2(1)(g) means a fault, imperfection, shortcoming or inadequacy
in the quality, nature and manner of performance.
Partly allowing the appeals, the Court
HELD: 1.1 Compensation for delayed possession
1. The fulcrum of the case of the developer rests on clause
14 of the ABA. Clause 11(a) of the ABA indicates that subject to
“all just exceptions” the developer endeavoured to complete
construction within a period of thirty-six months from the date of
the execution of the agreement unless hindered byforce majeure
conditions. Undoubtedly, the expression ‘endeavour’ indicates
that the developer did not bind itself to an inflexible timeline of
thirty-six months. But then again, the timeline of thirty-six moths
was subject to just exceptions and could be excused in the event
of force majeure conditions coming into operation. By the
provisions of clause 14, the developer agreed to compensate the
flat buyers at the rate of Rs. 5 per square feet of the super area of
the apartment per month for the period of delay. The existence
and extent of the delay constitute an admitted factual position.
The failure of the developer was neither relatable to a “just
exception” or the prevalence of force majeure conditions
referable to clause 11. [Paras 18-21][157-C, E-G; 158-E; 159-A]
ARIFUR RAHMAN KHAN AND ALEYA SULTANA  v. DLF SOUTHERN
HOMES PVT. LTD.
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SUPREME COURT REPORTS
[2020] 9 S.C.R.
1.2 The ABA is clearly one-sided. Where a flat purchaser
pays the instalments that are due in terms of the agreement with
a delay, clause

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