SUPREME COURT’S NARRATIVE ON CONSUMER RIGHTS & REAL ESTATE LAWS: DEFENDING HOME BUYERS.

INTRODUCTION

In the present judgement of, “Kaushik Narsinhbhai Patel & Ors. vs M/s. S.J.R. Prime Corporation Private Limited & Ors.” vide order 22/07/2024, adjudicated by the Supreme Court of India, the significant issues pertaining to delay in possession, deficiency in service, are highlighted. The present case delves into the intricate details of the Consumer Rights in real estate transactions.

FACTS OF THE CASE

In this case, the Appellants, a group of 46 homebuyers, along with some proforma Respondents, filed a Consumer Case, in the year 2019, against the builder, M/s. S.J.R. Prime Corporation Private Limited. The primary grievance was the deficiency in service by the builder in the delayed possession of flats in the project named “Fiesta Homes by SJR Prime.” According to the Construction Agreement dated 31st March 2012, the possession of the flats was supposed to be handed over by March 2014, with a grace period of 6 months. However, there was a considerable delay, and the possession was handed over after approximately 4 years.

The 1st Respondent claimed that the notice regarding the pendency of the matter in Consumer Court was unserved to him. The National Consumer Disputes Redressal Commission (NCDRC) then ordered the Appellants to serve a fresh notice along with all the pending Applications to the Opposite party and the opposite party has to file the Written Statement within 30 days. The Appellants then challenged the impugned order in Supreme Court via Civil Appeal, upon findings the Supreme Court concluded that the Respondent-builder was well aware of the pendency of the Consumer Complaint hence his right to file the Written Statement was forfeited, however his participation was allowed. The NCDRC virtually permitted the 1st Respondent to introduce facts to dispute their claims and complaints, and the Respondents then presented Written Statements by way of Annexures.

The Appellants alleged various deficiencies in construction and sought relief from the NCDRC. They sought compensatory interest for the delay, refund of illegally charged car parking and legal fees, refund of excess charges for BESCOM & BWSSB, and the provision of amenities like Green Jogging Track and Convenience Store, as promised in the brochure. The NCDRC partially allowed the complaint, directing the builder to pay delayed compensation in the form of interest at 6% per annum and to construct the promised amenities within 2 months. However, the claim of the Appellants for refund of the Parking fee with interest was declined by the NCDRC. The Appellants then filed an appeal in the Hon’ble Supreme Court against the impugned order by NCDRC.

ISSUES RAISED

1) Whether the delay in handing over possession constituted a deficiency in service and warranted compensatory interest.

2) Whether the builder’s collection of car parking fees, legal fees, and BESCOM & BWSSB charges was illegal and required refund with interest.

3) Whether the builder’s failure to provide promised amenities amounted to unfair trade practice and justified compensation.

4) Whether the builder’s right to file a written statement was forfeited and the implications of introducing new facts through written submissions.

ANALYSIS BY THE SUPREME COURT

The Supreme Court scrutinized the formula adopted by the NCDRC for calculating the compensatory interest, which was set at 6% per annum. The Appellants contended that this rate was inadequate and did not adequately compensate for the prolonged delay they endured.

A pivotal aspect of the case was the forfeiture of the builder’s right to file a written statement. The NCDRC had previously declared that the builder had forfeited this right and should proceed without a written statement. Despite this, the builder introduced new facts and defences through Written Submissions, which the Appellants argued was a violation of the Order. The Supreme Court analysed the extent to which such submissions were permissible and their impact on the proceedings.

JUDGEMENT

The Supreme Court, after a thorough examination of the facts, issues, and legal principles affirmed the findings of the NCDRC regarding the delay in possession and the deficiency in service by the builder. Regarding the refund of charges, the Supreme Court directed the builder to refund the illegally collected car parking fees, legal fees, and other charges with an interest of 6% per annum, aligning with the compensatory interest rate.

On the issue of providing amenities, the Supreme Court reiterated the NCDRC’s directive for the builder to construct the Green Jogging Track and Convenience Store within two months. The Supreme Court disapproved of the builder’s attempt to introduce new facts and defences through written submissions, which contradicted the Supreme Court’s previous Order. The Supreme Court held that such submissions should be limited to participation in proceedings and cross-examination of witnesses without introducing new evidence.

CONCLUSION:

The Supreme Court’s judgment covered important issues like delayed possession, illegal fees, and missing amenities. The Supreme Court agreed with NCDRC that the builder should pay interest at 6% per year for the delay and refund the illegal charges with interest. The builder was also ordered to provide the promised amenities within a set time. A significant part of the judgment was the Supreme Court’s stance on following procedural rules. The builder had forfeited the right to file a written statement but tried to introduce new defences through written submissions, which the Supreme Court disallowed.

 

Ashita

Associate

The Indian Lawyer & Allied Services