Supreme Court Directs Compensation for Delayed Possession in Fiesta Homes Project. The Supreme Court mandates compensation for homebuyers, correcting NCDRC's oversight of the construction agreement's possession date.


Summary of Judgement

The appellants, along with proforma respondents, filed a complaint against the first respondent-builder for delay in handing over possession of flats and deficiency in construction. The NCDRC's order dated 15.09.2022 partially allowed their complaint, awarding compensation for the delay and ordering the construction of promised amenities. The appellants challenged this order, arguing that the NCDRC ignored a prior Supreme Court order which declared the builder's right to file a written statement forfeited. The Supreme Court examined the validity of the NCDRC's order and found that it did not adequately consider the agreed possession date in the construction agreement. The court directed that the due date for possession should be fixed based on the agreement's terms and awarded compensation accordingly.

Introduction

  • Appellants and proforma respondents filed Consumer Case No. 945 of 2019 against the first respondent-builder.
  • Complaint of deficiency in service and delay in possession of flats in the 'Fiesta Homes by SJR Prime' project.

Background

  • Construction Agreement dated 31.03.2012, Clause 6.1 stated possession by March 2014 with six months grace period.
  • Possession delayed by about four years.
  • Complaint filed in May 2019 seeking various reliefs, including compensatory interest and refunds for illegal charges.

Proceedings Before the NCDRC

  • NCDRC's order dated 27.01.2021, notice to the respondent remained unserved.
  • Supreme Court's order dated 11.08.2021 declared the builder forfeited its right to file a written statement.
  • NCDRC partially allowed the complaint, awarding interest and ordering construction of amenities.

Supreme Court Examination

  • Appellants' contention that NCDRC allowed the builder to introduce new facts through written submissions.
  • Examination of the impact of the Supreme Court's forfeiture order.
  • Builder's right to participate in proceedings without filing a written statement.

Analysis of NCDRC's Order

  • NCDRC's method of calculating compensation based on the date of payment of the 11th instalment.
  • Supreme Court's reference to the decision in R.V. Prasannakumaar's case.
  • Fixation of due date for possession should be as per Clause 6.1 of the Construction Agreement.

Conclusion

  • NCDRC's order did not adequately consider Clause 6.1 of the Construction Agreement.
  • Compensation should be calculated from the due date fixed in the agreement.
  • Appellants entitled to compensation for the delay in handing over possession.

Case Title: Kaushik Narsinhbhai Patel & Ors. Versus M/s. S.J.R. Prime Corporation Private Limited & Ors.

Citation: 2024 LawText (SC) (7) 223

Case Number: Civil Appeal No. 8176 of 2022

Date of Decision: 2024-07-22