Vidya vs M/S Parsvnath Developers Ltd

2024 INSC 557 NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8985 OF 2022

VIDYA AND OTHERS …APPELLANT(S)

VERSUS

M/S PARSVNATH DEVELOPERS LTD. …RESPONDENT(S)

JUDGMENT

B.R. GAVAI, J.

1. This appeal challenges the order dated 29th September,

2022 passed by the National Consumer Disputes Redressal

Commission, New Delhi (hereinafter referred to as the

‘Commission’) in Consumer Case No. 1557 of 2016 wherein

the Commission partly allowed the complaint preferred by

the complainants-appellants herein and directed the sole

respondent herein, to refund the entire sum deposited by the

complainants-appellants with interest at the rate of 9% per

Signature Not Verified annum from the date of respective deposit till the date of Digitally signed by Deepak Singh

refund, within a period of two months from the date of the Date: 2024.07.29 15:54:30 IST Reason:

said order.

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2. The facts, in brief, giving rise to the present appeal are

as under:

2.1. M/s Parsvnath Developers Limited (hereinafter referred

to as the ‘Developer’), a company registered under the

Companies Act, 1956, and engaged in the business of

development and construction of inter alia residential

projects as well as projects for the Delhi Metro Rail

Corporation, launched a group housing project (hereinafter

referred to as ‘the project’) titled ‘Parsvnath Paramount’ at

Subhash Nagar (near Subhash Nagar Metro Station), New

Delhi in the year 2008 and widely publicized the same.

2.2. Upon gaining knowledge of the project, the

complainants-appellants booked a 3BHK flat in the said

project and to that end, deposited a sum of Rs.16,03,066/-

on 15th July, 2008. Subsequently, the complainants-

appellants paid second instalment of an identical sum on

14th August, 2008.

2.3. Subsequently, the complainants-appellants and the

respondent-Developer entered into a Flat Buyer Agreement

(hereinafter referred to as ‘the Agreement’) on 10th October,

2008 and in furtherance of the same, the complainants-

2 appellants were allotted Flat No. 301 situated in Tower 3 of

the project, which had an approximate area of 1805 sq. ft.

The total payable price of the flat was determined to be Rs.

1,28,24,525/- calculated at the rate of Rs. 7105/- per sq. ft.

of the saleable/super built-up area. An additional sum of Rs.

3,00,000/- was to be paid for the mandatory covered car

parking space in the concerned tower. Clause 11(a) of the

Agreement clarified that the construction of the flat would be

completed within a period of 30 months of commencement of

construction of the particular Tower in which the flat was

located, with a further grace period of 6 months.

2.4. The complainants-appellants opted for a ‘Construction

Linked Payment Plan’ under which 25% of the sale price was

payable within 30 days of booking, 60% of the sale price and

the additional sum for the covered car parking space was

payable in 6 installments and 15% of the sale price was

payable in another 3 installments. In pursuance of the same,

the complainants-appellants paid a total sum of

Rs.1,30,62,971/- in the intervening period between 15th July,

2008 and 21st December, 2013, as per the demand of the

respondent-Developer. The aforesaid amount deposited by

3 the complainants-appellants amounted to about 95% of the

total sale price of the flat.

2.5. In the meanwhile, the respondent-Developer unilaterally

transferred the said Flat No. 301 situated in Tower 3, which

had been initially allotted to the complainants-appellants, to

Flat No. 702 situated in Tower 2, admeasuring 1942 sq. ft.,

in April, 2011.

2.6. Subsequently, the respondent-Developer raised a

demand for the payment of VAT amounting to Rs. 60,141/-

which was duly paid by the complainants-appellants on 29th

January, 2014. A second payment of an identical sum was

made on 13th March, 2014.

2.7. In the interregnum, the period of 36 months set out in

the Agreement, including the grace period of 6 months, had

expired.

2.8. On failure of the respondent-Developer to handover the

possession of the flat within the expected deadline, despite

timely payments, the complainants-appellants made several

attempts to contact the respondent-Developer to enquire

about the progress of the project but received no substantial

update. Thereafter, the complainants-appellants visited the

4 site in June, 2015 and discovered that no construction work

was ongoing.

2.9. Aggrieved by the halt in construction, the complainants-

appellants in a letter dated 15th June, 2015, addressed to the

respondent-Developer, enquired about the time-frame within

which the construction would be completed and possession

would be handed over to them. Further, the complainants-

appellants enquired about the manner in which they would

be compensated on account of the delay in delivery of

possession.

2.10. The respondent-Developer in subsequent letters

dated 29th June, 2015 and 5th July, 2015 informed the

complainants-appellants that the delay in construction was

on account of technical issues and recession in the real-

estate sector owing to which construction for the project had

suffered. However, the respondent-Developer, assured the

complainants-appellants that they had persisted with the

construction and the same would be completed at the

earliest and the complainants-appellants would be informed

about the tentative date for making an offer of possession,

thereafter. So far as the compensation claimed for was

5 concerned, the same was to be governed by the terms and

conditions laid down in the Agreement. However, the

respondent-Developer failed to directly address the specific

queries that had been raised by the complainants-appellants.

2.11. Subsequently, the complainants-appellants

addressed two further letters to the respondent-Developer on

28th October, 2015 and 6th January, 2016, respectively, once

again raising queries as to when the construction would be

completed and the possession would be handed over to them,

whether the construction would be completed at all and the

manner in which the complainants-appellants would be

compensated for the delay in conclusion of the project.

However, the respondent-Developer did not respond to the

said letters.

2.12. Aggrieved thereby, the complainants-appellants

filed a complaint before the Commission being Consumer

Case No. 1557 of 2016 praying for a refund of the entire

amount paid by them as per the current market value along

with interest at the rate of 24% per annum, thereon, from the

date of booking the flat till the date of payment as well as

compensation amounting to Rs. 1,37,36,350/- along with

6 interest at the rate of 24% per annum thereon, among other

reliefs.

2.13. The learned Commission, by the impugned order,

partly allowed the said Consumer Case No. 1557 of 2016 in

the afore-stated terms, with costs of Rs. 1 lakh.

3. Being aggrieved thereby, the present appeal.

4. We have heard Shri Sanjay Jain, learned counsel

appearing on behalf of the complainants-appellants and Shri

Jayant Muth Raj, learned Senior Counsel appearing on

behalf of the respondent-Developer.

5. Shri Jain, learned counsel appearing for the

complainants-appellants submitted that the learned

Commission erred in awarding the interest only at the rate of

9% per annum. He submitted that the Agreement provided

that, in case there is delay in payment by the flat purchaser,

the respondent-Developer was entitled to condone the same

by charging interest at the rate of 24% per annum of the

amount in default. He further submitted that the proforma

agreement was fully tilted in favour of the respondent-

Developer. The Agreement provided that, in case of delay in

completion of the project by the respondent-Developer, it was

7 liable to pay interest only at the rate of 12% per annum. It is

submitted that there is no logic in making the flat purchaser

liable for payment of interest at the rate of 24% per annum

whereas the respondent-Developer was liable to pay interest

only at the rate of 12% per annum.

6. Shri Jain therefore submitted that, applying the

principle of parity, the learned Commission ought to have

awarded the interest at the rate of 24% per annum. It is

submitted that, in any case the interest at the rate of only 9%

per annum is not sustainable in law.

7. Per contra, Shri Jayant Muth Raj, learned Senior

Counsel appearing on behalf of the respondent-Developer

submitted that the delay in completion of the project was not

deliberate. He submitted that, since there was a delay in

sanctioning of the plans by the Delhi Development Authority,

the project could not be completed. It is therefore submitted

that the case was duly covered under the force majeure

clause and as such, interest even at the rate of 9% was not

liable to be imposed upon the respondent-Developer.

8. We have perused the order passed by the learned

Commission. Insofar as the contention of the respondent-

8 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

Limited (earlier known as DLF Universal Limited) and

Another v. Capital Greens Flat Buyers Association and

Others1 has held to the contrary. Therefore, the contention

in that regard is without substance. We find that the learned

Commission has rightly directed the respondent-Developer to

refund the entire amount deposited by the complainants-

appellants. However, we find 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 complainants-

appellants 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.

1 (2021) 5 SCC 537 9

9. In our view, 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.

10. In the result, the appeal is partly allowed. 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.

The unpaid amount in terms of the aforesaid shall be paid

within a period of three months from the date of this

judgment.

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

..............................J. (B.R. GAVAI)

..............................J. (SANDEEP MEHTA) NEW DELHI;

JULY 29, 2024

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