Developer must refund entire amount to flat buyers for project delay and failure to deliver possession within stipulated time

SC upheld NCDRC's direction for developer to refund entire amount deposited by flat buyers due to inordinate project delay and failure to deliver possession within stipulated time. Developer's force majeure defense regarding layout plan sanctioning delay was rejected, citing precedent. However, SC modified interest rate from 9% to 12% per annum as per agreement clause, noting buyers suffered without fault while making full payment but being deprived of timely possession. Appeal allowed partially.

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Issues:
1. Refund of amount deposited by complainants-appellants with interest rate.
2. Delay in completion of project and possession handover.
3. Interest rate discrepancy in the Agreement.
4. Force majeure clause applicability.
5. Appropriate interest rate determination.

Analysis:

Issue 1: Refund of amount deposited with interest rate
The appeal challenged the National Consumer Disputes Redressal Commission's order directing the respondent to refund the entire sum deposited by the complainants with interest at 9% per annum within two months. The complainants booked a flat in a project but faced delays in possession. The Commission partly allowed the complaint, leading to the appeal.

Issue 2: Delay in completion of project and possession handover
The complainants paid a significant amount towards the flat but faced construction delays. Despite timely payments, the possession was not handed over within the stipulated timeframe. The respondent failed to provide concrete updates on the project progress, leading the complainants to seek compensation for the delay.

Issue 3: Interest rate discrepancy in the Agreement
The Agreement between the parties outlined different interest rates for delays in payment by the flat purchaser and delays in project completion by the developer. The complainants argued that the interest rate of 9% per annum awarded by the Commission was not in line with the Agreement terms, which favored the developer disproportionately.

Issue 4: Force majeure clause applicability
The respondent claimed that the project delay was due to the delay in sanctioning plans by the Delhi Development Authority, invoking the force majeure clause. However, the court referenced a previous case to reject this argument, stating that the delay did not qualify as force majeure.

Issue 5: Appropriate interest rate determination
The court found that the Commission's decision to award interest at 9% per annum was unjustified given the prolonged project delay. The court modified the interest rate to 12% per annum, aligning with the Agreement terms and compensating the complainants for the extended wait for possession. The direction for refund of the deposited amount was upheld, with the modified interest rate to be applicable.

This detailed analysis covers the key issues raised in the legal judgment, addressing the arguments presented by both parties and the court's decision on each aspect of the case.

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