Apartment buyers win refund of Rs. 2.25 crore after terminating contract due to delivery delays

SC allowed appeal regarding apartment purchase termination due to delivery delay. Appellants purchased 4BHK apartment for Rs. 7.5 crore but faced possession delays beyond grace period. Contract Clause 11.3 provided absolute right to terminate within 90 days of grace period expiry. NCDRC erred by applying subjective standards instead of enforcing contractual terms, improperly questioning appellants' motives regarding tax avoidance. Court held NCDRC exceeded jurisdiction by rewriting contract terms. Ordered respondent-company to refund Rs. 2,25,31,148 in twelve monthly installments with 12% annual interest, starting April 2024.

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Issues Involved:
1. Delay in delivery of possession.
2. Right to terminate the Agreement and claim refund.
3. Interpretation of contract terms.
4. Rate of interest on refund.

Summary:

1. Delay in delivery of possession:
The appellants intended to purchase an apartment from the respondent-company and executed an Agreement to Sell on 29.11.2013. The possession for fit outs was to be delivered by 30.06.2016, extendable by a grace period of one year to 30.06.2017. The appellants alleged non-delivery of possession by this date and approached the NCDRC for a refund with interest and compensation.

2. Right to terminate the Agreement and claim refund:
The NCDRC directed the respondent-company to deliver possession within three months, rectify deficiencies, and pay delay compensation at 6% p.a. The appellants were given an option to seek a refund, subject to deduction of earnest money. Aggrieved, the appellants asserted their right to an unconditional refund with interest.

3. Interpretation of contract terms:
The Agreement stipulated separate dates for "offer of possession for fit outs" and "offer of possession" linked to the Occupation Certificate. The respondent-company claimed to have received a Part Occupancy Certificate on 08.06.2017, but the court found it insufficient as it required completion of unfinished works. The appellants were within their rights to terminate the Agreement upon non-receipt of possession by 30.06.2017.

4. Rate of interest on refund:
The court noted that the Agreement provided for a refund with interest at 12% p.a. The NCDRC's decision to impose its own standards and reduce the rate of interest was beyond its jurisdiction. The court upheld the agreed rate of 12% p.a. for the refund amount.

Conclusion:
The court set aside the NCDRC's order and directed the respondent-company to refund Rs. 2,25,31,148/- in twelve equal monthly installments with simple interest at 12% p.a. from the date of receipt till repayment. The appeal was allowed, and parties were to bear their own costs.

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