2024 (7) TMI 1167 - SC - Indian Laws

Builder loses right to file defense but can argue legal issues in delayed flat delivery case

Kaushik Narsinhbhai Patel & Ors. Versus M/s. S.J.R. Prime Corporation Private Limited & Ors.

The SC partially allowed the appeal in a construction deficiency case involving delayed flat delivery. The builder had forfeited its right to file a ... Deficiency in construction - delay in handing over the flats to the appellants - forfeiture of opportunity to file written statement - forfeiture of opportunity to file a written statement - HELD THAT:- Under Annexure P-18 order, this Court declared that the first respondent had forfeited its right to file a written statement and then permitted, rather, directed to proceed further without the written statement of the first respondent-builder. True that even then its right to participate in the proceedings was protected, presumably, taking into account the position of law in that regard. What is the impact of forfeiture of opportunity to file written statement? - HELD THAT:- All the provisions in the Code of Civil Procedure, 1908, (CPC) are not proprio vigore applicable to proceedings before Consumer Forums created under the Consumer Protection Act, 2019, except to the extent it is provided under Section 38 (9) of the Consumer Protection Act. Be that as it may, in the absence of specific provisions dealing with the consequence of forfeiture of the right to file a written statement, it is only appropriate to refer to the provisions and positions dealing with such situations in the CPC to know the general law on this question - The rigour of the rule of pleadings is evident from Rule 7 of Order VI, CPC, which mandates that ‘no pleading shall, except by way of amendment, raise any new ground of claim or contain any allegation of fact inconsistent with the previous pleadings of the party pleading the same’. There is no case for the first respondent that it sought permission to cross - examine Kaushik Narsinhbhai Patel who filed affidavit of evidence and produced documentary evidence. At any rate, no such case was put forth by the first respondent and no grievance of denial of such opportunity was also raised - the first respondent could be permitted only to argue the legal questions arising based on authorities and provisions of law as also regarding lapses or laches and the consequential non-admissibility or otherwise of evidence, let in by the appellants. Whether NCDRC had given weight to any such pleadings and contentions taken by the first respondent in its written submissions and/or whether the decision of NCDRC is based on any fact, factors or data furnished by the first respondent beyond the extent permissible on account of the legal trammel of forfeiture of its opportunity to file a written statement? - HELD THAT:- Though the action on the part of the first respondent who suffered Annexure P- 18 order, in bringing on record its case and contentions to resist the case and contentions of the complainants, cannot be appreciated, the contention of the appellants based on the same became inconsequential. As stated earlier, in view of Annexure P-18 order, we are also not going to advert to any case, claims or contentions of the first respondent raised in its reply and objection filed in this proceeding, except to the legally permissible limit, in case any such material is available on record - Though the first respondent participated in the proceeding before the NCDRC, it could not bring-forth anything admissible in view of the impact of forfeiture under Annexure P-18 order. This appeal is allowed in part by modifying the formula formulated under paragraph 8 of the impugned judgment by NCDRC in the matter of payment of compensation for delay in handing over possession of flats and it is ordered that the liability of the developer to pay interest at the rate of 6% per annum shall be from the due date for possession fixed as above viz., from September, 2014 till the date on which the respective complainant-buyers are offered possession. Application disposed off. Issues Involved:1. Deficiency in service by the builder.2. Delay in handing over possession of flats.3. Compensation for delayed possession.4. Refund of car parking fee.5. Refund of excess legal fee.6. Refund of BESCOM & BWSSB charges.7. Provision of promised amenities (Green Jogging Track and Convenience Store).Issue-wise Detailed Analysis:1. Deficiency in Service by the Builder:The appellants, along with proforma respondents, filed a complaint against the builder alleging deficiency in service due to significant delays in construction and possession of flats. The NCDRC recognized the delay and partially allowed the complaint, directing the builder to pay delayed compensation in the form of interest at 6% per annum on the deposits from the due date of possession until the offer of possession.2. Delay in Handing Over Possession of Flats:The Construction Agreement stipulated that possession was to be handed over by March 2014, with a six-month grace period. However, possession was delayed by approximately four years. The NCDRC acknowledged this delay and directed the builder to compensate the buyers with interest at 6% per annum from the due date of possession until the actual possession was offered.3. Compensation for Delayed Possession:The appellants sought compensatory interest at 18% per annum for the delay. The NCDRC, however, awarded interest at 6% per annum. The Supreme Court modified the NCDRC's formula for calculating the due date for possession, stating it should be six months from the promised date of March 2014, thereby fixing the due date for possession as September 2014. The interest at 6% per annum was to be calculated from this revised due date until the actual possession date.4. Refund of Car Parking Fee:The appellants claimed a refund of the car parking fee with interest. The NCDRC rejected this claim, referencing a previous decision in a similar case (CC/913/2016), which was upheld by the Supreme Court in R.V. Prasannakumaar's case. The Supreme Court affirmed the NCDRC's decision on this matter.5. Refund of Excess Legal Fee:The appellants sought a refund of the excess legal fee charged by the builder. The NCDRC denied this claim due to a lack of evidence from the complainants to determine the legal fee. The Supreme Court upheld this finding, agreeing with the NCDRC's reasoning.6. Refund of BESCOM & BWSSB Charges:The appellants requested a refund of the charges for BESCOM & BWSSB. The NCDRC's decision on this matter was not explicitly detailed in the judgment, implying no significant deviation from the builder's charges was found.7. Provision of Promised Amenities:The appellants demanded the provision of a Green Jogging Track and Convenience Store as promised in the brochure. The NCDRC directed the builder to construct these amenities within two months from the date of the judgment. The Supreme Court upheld this directive.Conclusion:The Supreme Court partially allowed the appeal, modifying the NCDRC's formula for calculating the due date for possession and affirming the interest rate of 6% per annum for delayed possession. The claims for refunds of car parking fees and excess legal fees were rejected, while the directive to construct promised amenities was upheld. The NCDRC was instructed to verify the dates of possession offers for each flat purchaser to determine the builder's liability accurately.