Sriganesh Chandrasekaran vs M/S Unishire Homes Llp

CIVIL APPEAL NOS.10527 - 10528 OF 2024

SRIGANESH CHANDRASEKARAN & OTHERS ... APPELLANTS

VERSUS

M/S UNISHIRE HOMES LLP & OTHERS … RESPONDENTS

JUDGMENT

ALOK ARADHE, J.

1. These appeals, filed under Section 67 of the Consumer Protection

Act, 2019 arise out of the impugned judgment and final orders

dated 30.07.2024 and 19.10.2023 passed by National Consumer

Disputes Redressal Commission (Commission) in the Review

Petition and consumer case respectively.

2. Facts giving rise to filing of these appeals, briefly stated, are that

landowners entered into a Joint Development Agreement (JDA)

with the developer on 24.02.2012 and executed General Power of

Attorney (GPA) in favor of the developer. On 21.02.2013, the

developer obtained the sanctioned plan and a construction Signature Not Verified

licence. Thereafter, from 29.07.2013, onwards the developer Digitally signed by KAPIL TANDON Date: 2026.02.20 16:51:08 IST Reason:

executed the Memoranda of Sale Agreements with the flat buyers. 1 Under the Sale Agreements, the developer agreed to handover the

possession of flats within 36 months.

3. The initial 36 months period for handing over the possession of

the flats expired on 24.08.2016. The grace period of six months

also expired on 24.02.2017. However, the project remained

incomplete. On 05.06.2017, the appellants issued a notice

seeking redressal for delay in handing over the possession of the

flats.

4. The appellants filed a Complaint before the Commission on

18.08.2017 alleging deficiency in service and unfair trade

practices. By judgment and final order dated 19.10.2023, the

Commission found deficiency in service due to delay of more than

six years in handing over the possession of the flats. The

developer was directed to complete the construction of the flats

allotted to the appellants, obtain occupancy certificate, if not

already obtained and handover the possession of the flats within

three months from the date of the order. The developer was

further directed to pay interest @ 6% per annum on the amount

deposited by the appellants from the due date of possession as

per their respective agreements till the date of offer of possession,

within six weeks, failing which delay interest would carry interest

2 @ 9% per annum. The landowners were not held liable for delay,

as the obligation to complete the construction rested solely with

the developer.

5. The appellants filed a review petition seeking to hold the

landowners jointly and severally liable and to enhance the

compensation awarded, to Rs.5/- per square feet per month, as

provided in the agreement, along with interest @ 6% per annum.

By an order dated 15.12.2023 passed in Chamber, the

Commission partly allowed the Review Petition and held the

landowners jointly and severally liable for completion of

construction and for payment of delay compensation. However,

the relief to award delay compensation @ Rs.5/- per square feet

along with 6% interest, on the deposits made by the appellants

was declined. The Review Petition was accordingly disposed of.

6. The landowners challenged the aforesaid order dated 15.12.2023

before this Court in SLP (C) No.9470/2024. By an order dated

03.05.2024, this Court held that the order dated 15.12.2023 in

the Review Petition was passed without affording any opportunity

of hearing to the landowners. Accordingly, the order dated

15.12.2023 was set aside and the Commission was directed to

3 dispose of the Review Petition after giving an opportunity of

hearing to the contesting parties, within a period of six weeks.

7. By an order dated 30.07.2024, the Commission inter alia held

that in view of JDA and Sale Agreement, the landowners cannot

be held jointly and severally liable for the deficiency in service.

However, the landowners and the developer were directed to

transfer the title of the property in question and proceed with the

execution of the sale deed in favour of the appellants. The Review

Petition was thus partly allowed.

8. The challenge in these appeals is confined to the extent, the

impugned orders hold the landowners not jointly and severally

not liable along with the developer for payment of compensation

for deficiency in service.

9. Learned counsel for the appellants submitted that the

landowners had executed GPA in favour of the developer thereby

creating a principal and agent relationship, and the principal is

liable for deficient acts of the agent. Our attention was invited to

various clauses of the Sale Agreement and it is contented that the

landowners and the developer are jointly and severally

responsible for deficiency in service. In support of the aforesaid

4 submissions, reliance has been placed on the decisions of this

Court1.

10. Learned counsel for the landowners, on the other hand,

submitted that under the JDA, the liability towards construction

and delivery of the flats vested entirely with the developer and the

landowners are fully indemnified by the developer against any

liability. Our attention has been invited to Clause 7 of the JDA

and Clauses 2 and 3 of GPA. It is contended that no relationship

of principal and agent exists between the landowners and the

developer and that the landowners are not signatories to the Sale

Agreements. It is urged that the delay in delivery of possession of

the flats to the appellants is not caused on account of any acts or

omissions of the landowners. It is contended that the direction in

para 11 of the impugned judgment dated 30.07.2024 to transfer

the title to the appellants and to execute the Sale Deeds is illegal

and unimplementable. It is, therefore, urged that the aforesaid

direction is set aside and the appeals be dismissed.

11. Learned counsel for the developer, has supported the orders

passed by the Commission.

1 Syed Abdul Khader v. Rami Reddy & Ors., (1979) 2 SCC 601; Bangalore Development Authority v. Syndicate Bank, (2007) 6 SCC 711; Santhosh Narasimha Murthy & Ors. v. M/s Mantri Castles Pvt. Ltd. & Anr., (Civil Appeal No. 8418 of 2022); Akshay & Anr. v. Aditya & Ors. (Civil Appeal No.3642 of 2018) and Civil Appeal Diary No.37702 of 2024 and SLP (C) with Diary No. 33331 of 2024 vide its order dated 20.09.2024.

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12. We have considered the rival submissions and have perused the

records. Clause 7 of the JDA executed between the landowners

and the developer provides for mutual indemnities between the

parties. Clauses 7.1 and 7.4 which are relevant for the purposes

of controversy involved are extracted below : -

“7. INDEMNITY

7.1 The FIRST PARTY/OWNERS hereby confirm that their title to the Schedule Property is good marketable and subsisting and that none else have any right, title interest or share in the Schedule Property and that the Schedule Property is not subject to any encumbrances, attachment or taxation or acquisition proceedings or charges of any kind. The FIRST PARTY/OWNERS shall keep the SECOND PARTY/DEVELOPER fully indemnified and harmless, against any loss or liability, cost or claim, action or proceedings that may arise against the SECOND PARTY/DEVELOPER on account of any defect in or want of title on the part of the FIRST PARTY/OWNERS or on account of any delay caused at the instance of the FIRST PARTY/OWNERS.

XXX XXX XXX 7.4 The SECOND PARTY/DEVELOPER shall be entitled to enter into Sub Sale Agreements with the prospective PURCHASERS in respect of the SECOND PARTY/DEVELOPER constructed area in the Schedule Property along with proportionate undivided share in the land and in the event of any breach of the terms between the SECOND PARTY/DEVELOPER and the prospective PURCHASE/NOMINEE of the SECOND PARTY/DEVELOPER, the FIRST PARTY/OWNERS shall not be liable for any consequences thereof suffered by the SECOND PARTY/DEVELOPER shall

6 always indemnify and keep indemnified the FIRST PARTY/OWNERS.”

13. Clauses 2 and 3 of the GPA executed by landowners in favour of

the developer authorize the developer to enter into Sale

Agreements, execute conveyances, receive consideration and

complete registration formalities in respect of developer’s share.

Clauses 2 and 3 are extracted below: -

“2. To enter into Agreement of Sale of 64% of undivided share of land in the Schedule Property to which the DEVELOPER is entitled to convey under the Joint Development Agreement and the constructed super built up area of 64% and proportionate car parking slots and to enter into any Agreement/s on such terms as our Attorney may deem fit with the prospective Purchaser/s and to obtain the registration of the Sale Agreement, Sale Deed/s, Rectification Deed, Supplemental Deeds, Confirmation Deed, Consent Deed, Cancellation Deed, Correction Deed or any other Assurance in relation to the share of the Developer in the Schedule Property and to present the said document/s for registration before the jurisdictional Sub Registrar or Registrar and to obtain the registration of the same, to sign all applications, declarations, affidavit, and forms as contemplated under the Karnataka Stamp Act and Rules and The Indian Registration Act and Generally to do all such lawful in relation to the registration of any Deed/s.

3. To receive the consideration for sale/transfer/conveyance, as also advances, earnest money deposits, pan payment and balance payment in regard to tire sale/conveyance/transfer of 64% of undivided share of the DEVELOPER in the Schedule Property therein and issue receipts and acknowledgements, if required.” 7

14. On a conjoint reading of the JDA and the GPA, it is evident that,

in respect of the flats falling in developer’s share, the developer

has the right to enter into sale agreements, undertake

construction, receive consideration, transfer possession and

convey title. The construction has to be carried out by the

developer. The delay in delivery of possession is in respect of flats

falling to the share of the developer.

15. It is not the case of the appellants that there was a delay in

construction on account of any act or omission on the part of the

landowners. The liability to pay the delay compensation is sought

to be fastened only on the ground that there is a relationship of

principal and agent. The landowners are undoubtedly jointly

responsible with the developer to ensure transfer of title to the

appellants. The Commission, therefore, has rightly directed both

the landowners and the developer to transfer the title and

execute sale deeds in favour of the appellants. The Clauses relied

upon by the appellants mainly, Clauses V, VII, 12(b) and 12(c) do

not indicate that landowners are under any obligation to raise

construction. For the lapse on the part of the developer, the

landowners, who are in no way concerned with the construction,

cannot be held liable for deficiency in service, particularly when 8 the developer has indemnified them against acts of commission

or omission in construction. The Commission has partly allowed

the Review Petition and has rightly fastened the liability for delay

compensation on the developer as it was responsible for the delay

in construction. The appellants’ interest has been fully protected

as landowners as well as the developer have been directed to

transfer title.

16. The reliance placed on orders passed by this Court on behalf of

the appellants is misplaced and does not advance the case of the

appellants. In Akshay & ANR. (supra), the State Commission and

the NCDRC had held that the developer alone liable for payment

of delay compensation and the aforesaid orders were upheld by

this Court. The said decision, in fact, supports the landowners.

In the order dated 20.09.2024 passed in Civil Appeal @ Diary

No.37702/2024 with SLP (C) @ Diary No.33331/2024, the issue

with regard to joint and several liability of landowners and the

developer has not been adjudicated. Similarly, order dated

25.07.2023 passed in Civil Appeal No.8418 of 2022 directs the

developer alone to pay the delay compensation. In any case, the

issue with regard to joint and several liability of the landowners

and the developer has to be decided in the facts of each case.

9 Therefore, the aforesaid decisions are of no assistance to the

appellants.

17. For the aforementioned reasons, we do not find any merit in

these appeals. The same fail and are hereby dismissed.

…..…….……………….………….……….J. [PAMIDIGHANTAM SRI NARASIMHA]

.……………………………….….……..….J. [ALOK ARADHE]

NEW DELHI;

FEBRUARY 20, 2026.

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