Facts of the Case:
The dispute arose when the Nagpur Housing and Area Development Board (a unit of MHADA) delayed the possession of a 3 BHK flat booked by the petitioner in 2009. Despite making full payment, the petitioner faced inordinate delays, leading to frustration and legal action.
The petitioner initially approached the Consumer Commission alleging unfair trade practices and deficiency in service. The State Consumer Disputes Redressal Commission (SCDRC) awarded a refund with 15% interest. The National Consumer Disputes Redressal Commission (NCDRC) reduced this interest rate to 9%, leading to further appeals.
Issues Before the Court:
- Whether a homebuyer can be compelled to accept possession after a significant delay.
- Whether the reduction of interest from 15% to 9% was justified.
- Whether the delay constituted a deficiency in service under the Consumer Protection Act.
Arguments Advanced:
Petitioner’s Contentions:
- The prolonged delay amounted to a breach of contract.
- The buyer’s right to seek a refund should not be curtailed by forcing possession.
- The NCDRC’s reduction of interest from 15% to 9% was unjustified.
Respondent’s Contentions:
- The delay was due to unforeseen circumstances.
- Since possession was eventually offered, no deficiency in service existed.
- The interest rate was appropriately reduced based on market conditions.
Court’s Reasoning and Judgment:
The Supreme Court, while analyzing the matter, reaffirmed the principle that a homebuyer cannot be compelled to accept possession after an unreasonable delay. The Court emphasized:
- Deficiency in Service: The delay in handing over possession was substantial and amounted to unfair trade practice.
- Precedents Considered: The Court relied on Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan (2019) and Bangalore Development Authority v. Syndicate Bank (2007), reaffirming that prolonged delays violate consumer rights.
- Interest Rate Justification: The Supreme Court upheld the NCDRC’s decision to grant a refund with 9% interest, deeming it reasonable based on market conditions.
Conclusion:
The judgment reinforces the protection of homebuyers under the Consumer Protection Act. By ruling that a buyer cannot be forced to accept possession after unreasonable delays, the Court set a strong precedent favoring consumer rights. This decision will have a significant impact on real estate litigation, ensuring that developers remain accountable for timely delivery.
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