2019 (4) TMI 155 - SC - Indian Laws

Doctrine of promissory estoppel - Handing over possession of a Row House to the respondent - whether the buyer was entitled to seek a refund or was estopped from doing so, having claimed compensation as the primary relief in the consumer complaint? Held that - The Buyer s Agreement is dated 2 July 2007. In terms of the 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 - the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified.

Summary

Issues:
1. Consumer complaint for possession of property and refund of amount paid with interest and compensation.
2. Interpretation of Buyer's Agreement terms regarding possession and payment of interest.
3. Entitlement of the buyer to seek refund after delay in possession.
4. Justification of orders for refund and modification of interest rate by the NCDRC.

Analysis:
1. The judgment arises from a consumer complaint filed by the respondent seeking possession of a property or refund of the amount paid with interest and compensation. The Buyer's Agreement between the parties specified the possession deadline as 31 December 2008, with a grace period of six months. The SCDRC initially directed the appellant to refund the amount with interest and compensation, which was later modified by the NCDRC reducing the compensation amount.

2. The Buyer's Agreement contained a clause stating that any delay beyond the grace period would require the developer to pay interest at the prevailing savings bank interest rate. The agreement was criticized for being one-sided, as it imposed higher penalties on the buyer for default compared to the developer. The judgment highlighted the imbalance in the agreement terms and emphasized the buyer's right to claim reasonable interest or compensation despite the specified clause.

3. The court analyzed whether the buyer was entitled to seek a refund after the delay in possession or was estopped from doing so due to initially claiming compensation as the primary relief. Despite the buyer's readiness to accept possession in 2011, the extended delay until 2016 was deemed unreasonable. The court found it unfair to non-suit the buyer solely based on the initial prayer for possession, especially considering the significant delay and the buyer's right to seek a refund.

4. The court justified the orders for refund passed by the SCDRC and NCDRC, considering the prolonged delay in possession and the buyer's entitlement to seek a refund. The NCDRC's decision to award interest at 12% per annum was modified by the Supreme Court to 9% per annum. The judgment affirmed the directions of the NCDRC regarding refund and interest payment, with the outstanding amount to be released from the deposited funds by the appellant.

In conclusion, the appeal was disposed of with the modification of the interest rate, and no costs were awarded. The judgment provided a detailed analysis of the Buyer's Agreement terms, the buyer's entitlement to seek a refund after a delay in possession, and the justification for the orders passed by the consumer dispute redressal commissions.