Kolkata West International City Pvt Ltd vs Devasis Rudra

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3182 OF 2019 (@SLP(C) No(s). 1795 OF 2017)

KOLKATA WEST INTERNATIONAL CITY PVT LTD Appellant(s)

VERSUS

DEVASIS RUDRA Respondent(s)

JUDGMENT

Dr. Dhananjaya Y. Chandrachud, J.

Leave granted.

This appeal arises from the judgment dated 21 November

2016 of the National Consumer Disputes Redressal Commission1.

A Buyer’s Agreement dated 2 July 2007 was entered into

between the appellant and the respondent.

The respondent paid an amount of Rs 39,29,280 in 2006 in

terms of a letter of allotment dated 20 September 2006. The

agreement between the parties envisaged that the appellant

would hand over possession of a Row House to the respondent by

31 December 2008 with a grace period of a further six months

ending on 30 June 2009.

Signature Not Verified

The respondent filed a consumer complaint before the West Digitally signed by MANISH SETHI Date: 2019.03.28 15:46:42 IST Reason: Bengal State Consumer Disputes Redressal Commission2 in 2011

1 “NCDRC” 2 “SCDRC” 2

praying for possession of the Row House and in the alternative

for the refund of the amount paid to the developer together

with interest at 12% per annum. Compensation of Rs 20 lakhs was

also claimed.

The SCDRC allowed the complaint by directing the

appellant to refund the moneys paid by the respondent together

with interest at 12% per annum and compensation of Rs 5 lakhs.

The NCDRC has modified this order by reducing the compensation

from Rs 5 lakhs to Rs 2 lakhs.

Mr. Ravinder Narain, learned counsel appearing on behalf

of the appellant submits that the primary relief which was

sought in the consumer complaint was for delivery of

possession. According to the appellant, the completion

certificate was received on 29 March 2016, which was intimated

to the respondent on 11 April 2016. Moreover, before the

SCDRC, in its written submissions, the appellant had offered

possession of the Row House to the respondent. It has also

been stated that in a complaint which was filed by an

association representing the allottees of 161 Row houses, a

settlement was arrived on 11 September 2018 before the NCDRC

specifying the date on which possession would be handed

over together with interest at 6% per annum instead of 4% as

mentioned in the Buyers’ Agreement. It was urged that the

developer having made a substantial investment in terms of the

agreement, a direction for refund is not warranted. It has

also been urged that the SCDRC in the course of its decision

erroneously observed that the developer was unable to fulfill 3

its obligation to complete the construction within the agreed

period and it was not certain when the Row house would be

handed over. It was urged that this observation by the SCDRC is

contrary to the record since before it, a specific offer of

possession was made.

It has been urged on behalf of the respondent by

Mr. Supriya Bose, learned senior counsel that a consumer

complaint was filed in the year 2011. At that stage, the

appellant was bonafide ready and willing to accept possession.

However, nearly seven years have elapsed after the extended

date for the delivery of possession which expired on 30 June

2009. In spite of this, no offer of possession was

forthcoming. Learned senior counsel submitted that the letter

dated 22 March 2016 of the developer was conditional and

despite the subsequent letter dated 11 April 2016, no formal

offer of possession was ever made by the appellant. Moreover,

it was urged that the interest awarded by the NCDRC at the rate

of 12% is just having regard to the economic loss and hardship

suffered by the respondent.

While considering the rival submissions, we must at the

outset advert to the following clause which was contained in

the Buyer’s Agreement:

“Unless prevented by circumstances beyond the control of the company and subject to Force Ma- jeure, KWIC shall ensure to complete the said unit in all respect within 31st December 2008 only for the Cluster D. Further there will be a grace period of 6 months (up to 30th June, 2009) from the date of completion. In case the possession is not transferred after expiry of the said grace period, KWIC will be liable to pay prevailing 4

saving Bank interest of the State Bank of India for each month of delay on the money given by the allottee as compensation but no compensation will be paid on account of force majeure reasons.”

It is the above clause which is pressed in aid by the

developer. Under the aforesaid clause, any delay beyond 30

June 2009 would result in the developer being required to pay

interest at the prevailing savings bank interest of the State

Bank of India. Interestingly, where the buyer is in default,

the agreement stipulates that interest at the rate of 18 per

cent from the date of default until the date of payment would

be charged for a period of two months, failing which the

allotment would be cancelled by deducting 5% of the entire

value of the property. The agreement was evidently one sided.

For a default on the part of the buyer, interest at the rate of

18% was liable to be charged. However, a default on the part

of the developer in handing over possession would make him

liable to pay interest only at the savings bank rate prescribed

by the SBI. There is merit in the submission which has been

urged by the buyer that the agreement was one sided. The clause

which has been extracted in the earlier part of this order will

not preclude the right and remedy available to the buyer to

claim reasonable interest or, as the case may be,

compensation.

The essential aspect of the case which is required to be

analysed is 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. The Buyer’s 5

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.

In the circumstances, we are of the view that the orders

passed by the SCDRC and by the NCDRC for refund of moneys were

justified.

Having regard to all the facts and circumstances of the

case, we modify the order of the NCDRC by directing that the

appellant shall pay interest at the rate of 9% per annum to the

respondent instead and in place of 12% as directed by the

NCDRC. Save and except for the above modification, we affirm

the directions of the NCDRC.

6

The amount outstanding in terms of the directions of

this Court shall be released out of the moneys which have been

deposited by the appellant. The balance, if any, that remains

shall be refunded to the appellant.

The appeal is, accordingly, disposed of. There shall be no

order as to costs.

Pending application(s), if any, shall stand disposed of.

.............................J. (DR. DHANANJAYA Y. CHANDRACHUD)

.............................J. (HEMANT GUPTA)

NEW DELHI MARCH 25, 2019 7

ITEM NO.39 COURT NO.8 SECTION XVII

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 1795/2017

(Arising out of impugned final judgment and order dated 21-11-2016 in FA No. 958/2016 passed by the National Consumers Disputes Re-

dressal Commission, New Delhi)

KOLKATA WEST INTERNATIONAL CITY PVT LTD Petitioner(s)

VERSUS

DEVASIS RUDRA Respondent(s)

Date : 25-03-2019 This petition was called on for hearing today.

CORAM :

HON'BLE DR. JUSTICE D.Y. CHANDRACHUD HON'BLE MR. JUSTICE HEMANT GUPTA

For Petitioner(s) Mr. Ravinder Narain, Adv. Mr. Siddharth Banthia, Adv. Mr. Rajat Gava, Adv.

Mr. Rajan Narain, AOR For Respondent(s) Mr. Supriya Bose, Sr. Adv. Mr. Debajyoti Deb, Adv.

Mr. Subhasish Bhowmick, AOR Ms. Goldy Goyel, Adv.

UPON hearing the counsel the Court made the following O R D E R Leave granted.

The appeal is disposed of in terms of the signed order.

Pending application(s), if any, shall stand disposed of.

(MANISH SETHI) (SAROJ KUMARI GAUR) COURT MASTER (SH) BRANCH OFFICER

(Signed reportable judgment is placed on the file)