2024 (8) TMI 1 - SC - Indian Laws

Direction by National Consumer Disputes Redressal Commission (NCDRC) to refund the entire sum deposited by the complainants-appellants with interest at the rate of 9% per annum from the date of respective deposit till the date of refund - delay in completion of the project and in handing over possession of flats - force majeure clause - HELD THAT - Insofar as the contention of the respondent - Developer that since there was a delay in sanctioning the layout plans, it was covered under force majeure clause is concerned, this Court, in the case of DLF HOME DEVELOPERS LTD. AND ORS. VERSUS CAPITAL GREENS FLAT BUYERS ASSOCIATION AND ORS. 2020 (12) TMI 1400 - SUPREME COURT has held to the contrary. Therefore, the contention in that regard is without substance. The learned Commission has rightly directed the respondent-Developer to refund the entire amount deposited by the complainantsappellants. However, it is found that, insofar as award of interest at the rate of 9% per annum is concerned, the learned Commission was not justified in the facts of the case to award a lesser interest than even the one agreed upon in the Agreement. Undisputedly, the facts of the case show that the project was delayed inordinately. The complainantsappellants were made to suffer for long, for no fault of them. In spite of making the entire payment, they were deprived of the possession within the stipulated time. The learned Commission, at least, ought to have awarded interest at the rate of 12% per annum in view of clause 7(b) of the Agreement. The direction made by the learned Commission for refund of the entire amount deposited by the complainants-appellants is upheld. However, the direction with regard to interest is modified to the extent that it shall be paid at the rate of 12% per annum from the date of respective deposit till the date of refund - Appeal allowed in part.

Summary

Issues:
1. Refund of amount deposited by complainants-appellants with interest rate.
2. Delay in completion of project and possession handover.
3. Interest rate discrepancy in the Agreement.
4. Force majeure clause applicability.
5. Appropriate interest rate determination.

Analysis:

Issue 1: Refund of amount deposited with interest rate
The appeal challenged the National Consumer Disputes Redressal Commission's order directing the respondent to refund the entire sum deposited by the complainants with interest at 9% per annum within two months. The complainants booked a flat in a project but faced delays in possession. The Commission partly allowed the complaint, leading to the appeal.

Issue 2: Delay in completion of project and possession handover
The complainants paid a significant amount towards the flat but faced construction delays. Despite timely payments, the possession was not handed over within the stipulated timeframe. The respondent failed to provide concrete updates on the project progress, leading the complainants to seek compensation for the delay.

Issue 3: Interest rate discrepancy in the Agreement
The Agreement between the parties outlined different interest rates for delays in payment by the flat purchaser and delays in project completion by the developer. The complainants argued that the interest rate of 9% per annum awarded by the Commission was not in line with the Agreement terms, which favored the developer disproportionately.

Issue 4: Force majeure clause applicability
The respondent claimed that the project delay was due to the delay in sanctioning plans by the Delhi Development Authority, invoking the force majeure clause. However, the court referenced a previous case to reject this argument, stating that the delay did not qualify as force majeure.

Issue 5: Appropriate interest rate determination
The court found that the Commission's decision to award interest at 9% per annum was unjustified given the prolonged project delay. The court modified the interest rate to 12% per annum, aligning with the Agreement terms and compensating the complainants for the extended wait for possession. The direction for refund of the deposited amount was upheld, with the modified interest rate to be applicable.

This detailed analysis covers the key issues raised in the legal judgment, addressing the arguments presented by both parties and the court's decision on each aspect of the case.