Kolkata West International City Pvt Ltd vs Devasis Rudra on 25 March, 2019
Kolkata West International City Pvt Ltd vs Devasis Rudra on 25
March, 2019
Equivalent citations: AIRONLINE 2019 SC 2616
Bench: D.Y. Chandrachud, Hemant Gupta
RE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3182 OF 2019
(@SLP(C) No(s). 1795 OF 2017)
KOLKATA WEST INTERNATIONAL CITY PVT LTD Appellan
VERSUS
DEVASIS RUDRA Responde
JUDGMENT
Dr. Dhananjaya Y. Chandrachud, J.
Leave granted.
This appeal arises from the judgment dated 21 November 2016 of the National Consumer Disputes
Redressal Commission1.
A Buyer’s Agreement dated 2 July 2007 was entered into between the appellant and the respondent.
The respondent paid an amount of Rs 39,29,280 in 2006 in terms of a letter of allotment dated 20
September 2006. The agreement between the parties envisaged that the appellant would hand over
possession of a Row House to the respondent by 31 December 2008 with a grace period of a further
six months ending on 30 June 2009.
The respondent filed a consumer complaint before the West Reason: Bengal State Consumer
Disputes Redressal Commission2 in 2011 1 “NCDRC” 2 “SCDRC” praying for possession of the Row
House and in the alternative for the refund of the amount paid to the developer together with
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Kolkata West International City Pvt Ltd vs Devasis Rudra on 25 March, 2019
interest at 12% per annum. Compensation of Rs 20 lakhs was also claimed.
The SCDRC allowed the complaint by directing the appellant to refund the moneys paid by the
respondent together with interest at 12% per annum and compensation of Rs 5 lakhs. The NCDRC
has modified this order by reducing the compensation from Rs 5 lakhs to Rs 2 lakhs.
Mr. Ravinder Narain, learned counsel appearing on behalf of the appellant submits that the primary
relief which was sought in the consumer complaint was for delivery of possession. According to the
appellant, the completion certificate was received on 29 March 2016, which was intimated to the
respondent on 11 April 2016. Moreover, before the SCDRC, in its written submissions, the appellant
had offered possession of the Row House to the respondent. It has also been stated that in a
complaint which was filed by an association representing the allottees of 161 Row houses, a
settlement was arrived on 11 September 2018 before the NCDRC specifying the date on which
possession would be handed over together with interest at 6% per annum instead of 4% as
mentioned in the Buyers’ Agreement. It was urged that the developer having made a substantial
investment in terms of the agreement, a direction for refund is not warranted. It has also been urged
that the SCDRC in the course of its decision erroneously observed that the developer was unable to
fulfill its obligation to complete the construction within the agreed period and it was not certain
when the Row house would be handed over. It was urged that this observation by the SCDRC is
contrary to the record since before it, a specific offer of possession was made.
It has been urged on behalf of the respondent by Mr. Supriya Bose, learned senior counsel that a
consumer complaint was filed in the year 2011. At that stage, the appellant was bonafide ready and
willing to accept possession. However, nearly seven years have elapsed after the extended date for
the delivery of possession which expired on 30 June 2009. In spite of this, no offer of possession
was forthcoming. Learned senior counsel submitted that the letter dated 22 March 2016 of the
developer was conditional and despite the subsequent letter dated 11 April 2016, no formal offer of
possession was ever made by the appellant. Moreover, it was urged that the interest awarded by the
NCDRC at the rate of 12% is just having regard to the economic loss and hardship suffered by the
respondent.
While considering the rival submissions, we must at the outset advert to the following clause which
was contained in the Buyer’s Agreement:
“Unless prevented by circumstances beyond the control of the company and subject
to Force Ma- jeure, KWIC shall ensure to complete the said unit in all respect within
31st December 2008 only for the Cluster D. Further there will be a grace period of 6
months (up to 30th June, 2009) from the date of completion. In case the possession
is not transferred after expiry of the said grace period, KWIC will be liable to pay
prevailing saving Bank interest of the State Bank of India for each month of delay on
the money given by the allottee as compensation but no compensation will be paid on
account of force majeure reasons.” It is the above clause which is pressed in aid by
the developer. Under the aforesaid clause, any delay beyond 30 June 2009 would
result in the developer being required to pay interest at the prevailing savings bank
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Kolkata West International City Pvt Ltd vs Devasis Rudra on 25 March, 2019
interest of the State Bank of India. Interestingly, where the buyer is in default, the
agreement stipulates that interest at the rate of 18 per cent from the date of default
until the date of payment would be charged for a period of two months, failing which
the allotment would be cancelled by deducting 5% of the entire value of the property.
The agreement was evidently one sided. For a default on the part of the buyer,
interest at the rate of 18% was liable to be charged. However, a default on the part of
the developer in handing over possession would make him liable to pay interest only
at the savings bank rate prescribed by the SBI. There is merit in the submission
which has been urged by the buyer that the agreement was one sided. The clause
which has been extracted in the earlier part of this order will not preclude the right
and remedy available to the buyer to claim reasonable interest or, as the case may be,
compensation.
The essential aspect of the case which is required to be analysed is whether the buyer
was entitled to seek a refund or was estopped from doing so, having claimed
compensation as the primary relief in the consumer complaint. The Buyer’s
Agreement is dated 2 July 2007. In terms of the agreement, the date for handing over
possession was 31 December 2008, with a grace period of six months. Even in 2011,
when the buyer filed a consumer complaint, he was ready and willing to accept
possession. It would be manifestly unreasonable to construe the contract between the
parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly
seven years had elapsed from the date of the agreement. Even according to the
developer, the completion certificate was received on 29 March 2016. This was nearly
seven years after the extended date for the handing over of possession prescribed by
the agreement. A buyer can be expected to wait for possession for a reasonable
period. A period of seven years is beyond what is reasonable. Hence, it would have
been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in
the reliefs sought before the SCDRC. There was in any event a prayer for refund.
In the circumstances, we are of the view that the orders passed by the SCDRC and by
the NCDRC for refund of moneys were justified.
Having regard to all the facts and circumstances of the case, we modify the order of
the NCDRC by directing that the appellant shall pay interest at the rate of 9% per
annum to the respondent instead and in place of 12% as directed by the NCDRC. Save
and except for the above modification, we affirm the directions of the NCDRC.
The amount outstanding in terms of the directions of this Court shall be released out
of the moneys which have been deposited by the appellant. The balance, if any, that
remains shall be refunded to the appellant.
The appeal is, accordingly, disposed of. There shall be no order as to costs.
Pending application(s), if any, shall stand disposed of.
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Kolkata West International City Pvt Ltd vs Devasis Rudra on 25 March, 2019
.............................J. (DR. DHANANJAYA Y. CHANDRACHUD) .............................J.
(HEMANT GUPTA) NEW DELHI MARCH 25, 2019 ITEM NO.39 COURT NO.8
SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 1795/2017 (Arising out of impugned
final judgment and order dated 21-11-2016 in FA No. 958/2016 passed by the
National Consumers Disputes Re-
dressal Commission, New Delhi)
KOLKATA WEST INTERNATIONAL CITY PVT LTD Petitioner(s)
VERSUS
DEVASIS RUDRA Respondent(s)
Date : 25-03-2019 This petition was called on for hearing today. CORAM :
HON'BLE DR. JUSTICE D.Y. CHANDRACHUD HON'BLE MR. JUSTICE HEMANT
GUPTA For Petitioner(s) Mr. Ravinder Narain, Adv. Mr. Siddharth Banthia, Adv. Mr.
Rajat Gava, Adv.
Mr. Rajan Narain, AOR For Respondent(s) Mr. Supriya Bose, Sr. Adv. Mr. Debajyoti
Deb, Adv.
Mr. Subhasish Bhowmick, AOR Ms. Goldy Goyel, Adv.
UPON hearing the counsel the Court made the following O R D E R Leave granted.
The appeal is disposed of in terms of the signed order.
Pending application(s), if any, shall stand disposed of.
(MANISH SETHI) (SAROJ KUMARI GAUR)
COURT MASTER (SH) BRANCH OFFICER
(Signed reportable judgment is placed on the file)
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