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We are the Law Offices of Kr. Vivek Tanwar Advocate and Associates, specializing in providing legal services under the Consumer Protection Act 2019. With a deep commitment to upholding consumer rights and ensuring fair redressal, our firm has been at the forefront of consumer protection cases. In this article, we delve into a consumer case, offering a comprehensive analysis of the issues, implications, and the path to justice that unfolded within the ambit of this pivotal legislation. Join us as we navigate the intricacies of this legal journey and shed light on the significance of consumer protection in today’s marketplace.
Introduction :
In the realm of consumer law, where individuals seek justice for grievances against service providers, a pivotal case emerged before the National Consumer Disputes Redressal Commission (NCDRC). Titled ‘Veena Khanna vs. Ansal Properties & Industries Ltd,’ this case unfolded in 2007 and has far-reaching implications for the rights of consumers in India.
As we navigate through the facts, arguments, and the final verdict, we gain valuable insights into the evolving landscape of consumer protection in India. This case serves as a reminder of the pivotal role that consumer forums play in safeguarding the rights of individuals against unfair business practices.
Facts :
On July 9, 1996, Veena Khanna (the Complainant) extended an offer to purchase a flat, agreeing to a total sum of Rs. 23,33,344/-. Subsequently, both parties reached a consensus on this agreement. Over a span of time, the complainant diligently made payments amounting to Rs. 15,12,000 on various dates, continuing until January 16, 1998. However, due to a lack of progress in the construction project, further payments were withheld.
Claiming that the opposite party No. 1 had committed, in a letter dated January 9, 1998, to deliver possession of the flat by June 1, 1999, the complainant sought redress. Regrettably, the apartment remained unbuilt and undelivered. Frustrated by this deficiency of service on the part of the opposite parties, the complainant insisted on a refund of the deposit amount, along with interest at a rate of 18% per annum.
When the opposite party refused to comply with this request, the complainant filed complaint No. 251/2000 before the Delhi State Commission on September 13, 2000. The Delhi State Commission acknowledged the complaint and issued an order requiring the opposing party to reimburse Rs. 15 lakhs, along with interest accruing at a rate of 13% per year from the date of the last installment deposit until the payment date. The complainant managed to secure the funds at the specified interest rate, which validated the 13% interest rate.
With the aim of securing possession of the apartment from the builders and obtaining just compensation to facilitate the purchase of a flat of the agreed-upon size, the complainant appealed against this decision. In light of the delays in construction and decision-making, the complainant’s quest for compensation is grounded in the recognition that it is nearly impossible for a retired government employee to afford a flat at the current market price.
Therefore, there exist two plausible courses of action:
(a) One option is granting suitable compensation for the construction delay and compelling the opposing parties to provide the complainant with possession of an alternate flat, ideally in proximity to the originally assigned location.
(b) Another alternative is to offer sufficient compensation that would enable the Complainant to acquire a new flat of comparable size, either within the same area or in a neighboring locality.
Arguments advanced by the Appellants:
- The appellant was fully prepared and eager to take possession of the apartment, but the builder’s construction of the apartments was uncharacteristically protracted.
- Furthermore, it is contended that the plaintiff, being a government employee, could not afford to wait for an indefinite period, thus necessitating the lodging of a complaint to seek a refund of the funds, along with accrued interest and just compensation.
Arguments advanced by the Respondents:
- It was categorically denied that the Respondents provided substandard service. The construction of the flat reached its completion stage, with finishing tasks underway and progressing rapidly, which accurately reflects the current status. It is anticipated that the apartment will be fully ready in the near future, at which point the complainant will rightfully obtain possession.
- The Complainant is not entitled to unilaterally or arbitrarily terminate the existing contract with the Respondents or demand the return of any funds previously remitted to them, including interest. An established construction agreement between the parties has already seen substantial investments by the Respondents in the construction of the apartment. Consequently, it is now impractical for the Complainant to unilaterally withdraw from the established construction arrangements.
- The assertion that the complainant has suffered any injury, as alleged or otherwise, is unequivocally denied. Furthermore, there is no basis to support claims of mental distress, torture, or harassment inflicted upon the Complainant by the Respondents, and such allegations are disputed.”
Judgment Analysis:
Due to the escalating real estate prices, it appears that the builder may have taken undue advantage of the State Commission’s previously mentioned order, which presented the opposing parties with a favored option, leading to the refund of the complainant’s deposit along with interest, as per the directive. The opposing parties’ exploitation of the situation stemmed from the absence of a proper compensation resolution and the presence of a choice between refunding the money or delivering possession of the apartment.
In response to the builder’s stance, as articulated by the Opposite Parties, the National Commission noted that the State Commission could have issued a specific directive, obligating the builder to promptly transfer ownership of the unit upon completion, along with a fair compensation order for the construction delay experienced by the aggrieved party. The State Commission, it was observed, should not have introduced multiple options that allowed the builder to potentially withhold property ownership in anticipation of increased market prices.
It is worth noting that the complainant’s plea for a refund was pending before the State Commission for over five years, during which there was a significant surge in the market prices of immovable property. Additionally, the role of Consumer Fora in conducting inquisitorial proceedings, as opposed to an adversarial system, necessitates a comprehensive examination of the matter, including the opposing party’s defense. In this context, a directive for the surrender of possession of the flat should have been issued, accompanied by provisions for fair compensation for any associated delays.
Given the prevailing circumstances, this Appeal has been granted. The opposing parties are mandated to provide the complainant with compensation amounting to Rs. 7,50,000. Nevertheless, the builder retains the option to offer the complainant an alternate flat of the agreed-upon size and price, either within the same vicinity or nearby, if they deem the compensation of Rs. 7,50,000/- (Rupees seven lakhs and fifty thousand) to be excessive or unreasonable.
In the case of Lucknow Development Authority vs. M.K. Gupta (1994), the Supreme Court established the principle that a builder or developer bears the responsibility of ensuring timely project completion and is held liable for any associated delays.
Written by: Adv. Anjali Bablani (D/3376/2016)