Flat Buyers Awarded Compensation for Delayed Possession and Unfair Agreement Terms

The court held that the flat purchasers are entitled to compensation beyond the agreed rate of Rs. 5 per square foot per month due to significant delays in possession and the one-sided nature of the Apartment Buyers Agreement (ABA). The court directed the developer to pay compensation at a rate of 6% simple interest per annum on total amounts paid for the flats, from thirty-six months after the execution of the ABAs until the offer of possession after obtaining the occupation certificate. The court set aside the NCDRC's dismissal of the complaint and ordered the developer to pay the additional compensation within one month, with interest at 9% per annum for delays in payment.

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Issues Involved:
1. Delay in handing over possession of flats.
2. Reimbursement of taxes and interest charged to flat purchasers.
3. Deficiency in providing amenities.
4. Levy of electricity charges by the developer.
5. Failure to construct the club house.
6. Execution of deeds of conveyance and settlement deeds.
7. Entitlement to compensation beyond the agreed rate.

Detailed Analysis:

1. Delay in Handing Over Possession:
The developer admitted to a significant delay in handing over possession of the flats, ranging from two to four years. Despite the stipulation in Clause 14 of the Apartment Buyers Agreement (ABA) that compensation for delay would be Rs. 5 per square foot per month, the court found this rate inadequate given the extent of the delay. The agreement was deemed one-sided, heavily favoring the developer, and the court held that the consumer forum's jurisdiction to award just and reasonable compensation is not constrained by the terms of the ABA. The court emphasized that flat purchasers suffer financial and emotional distress due to such delays and are entitled to compensation beyond the stipulated rate.

2. Reimbursement of Taxes and Interest:
The ABA explicitly required flat purchasers to bear their proportionate share of taxes, including works contract tax. The developer explained that the delay in tax payments was due to pending litigation, and no penalty was passed on to the purchasers. The court found no deficiency of service in this regard, as the terms of the ABA were clear and the developer's explanation was reasonable.

3. Deficiency in Providing Amenities:
The developer failed to provide several promised amenities, including a shopping center, health care facilities, and an early learning school. The court held that the developer must be held accountable for these representations, as they significantly impact the quality of life and potential appreciation of the flats. The failure to provide these amenities constitutes a deficiency in service, warranting compensation to the flat purchasers.

4. Levy of Electricity Charges:
The developer collected additional charges for setting up a dedicated electric sub-station, as required by BESCOM. The court upheld the NCDRC's finding that these charges were in accordance with Clause 23(b) of the ABA, which allowed for the recovery of costs incurred for creating necessary infrastructure. There was no deficiency of service in this regard.

5. Failure to Construct the Club House:
The developer constructed a club house with various facilities and obtained an occupation certificate on 13 May 2019. The court found no breach of obligation regarding the club house, as the developer had fulfilled this aspect of the agreement.

6. Execution of Deeds of Conveyance and Settlement Deeds:
The court rejected the developer's argument that executing a deed of conveyance precludes a consumer claim for delayed possession. It was unreasonable to expect flat buyers to forsake their right to claim compensation in order to obtain a conveyance. However, the court excluded eleven purchasers who had entered into specific settlement deeds and three who had sold their interest in the apartments from the benefit of this order.

7. Entitlement to Compensation Beyond the Agreed Rate:
The court held that the flat buyers are entitled to compensation beyond the agreed rate of Rs. 5 per square foot per month due to the significant delay and the one-sided nature of the ABA. The court directed the developer to pay compensation at the rate of 6% simple interest per annum on the total amounts paid towards the purchase of the flats, from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate. This amount is in addition to the compensation already credited by the developer.

Final Directions:
The court allowed the appeals in part, setting aside the NCDRC's dismissal of the complaint. The developer was directed to pay the additional compensation within one month, failing which it would carry interest at the rate of 9% per annum until payment.

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