MANU/SC/0467/2021

Equivalent/Neutral Citation: 2021(225)AIC 195, AIR2021SC 4229, 2021(4)ALD250, 2021 (149) ALR 219, 2021(5)ALT117, 2021(4)BLJ405,
(2021)2C ALLT91(SC ), 2021 (3) C C C 201 , 132(2021)C LT485, III(2022)C PJ48(SC ), 2021 (3) C PR 163 , 2021(4)IC C 563, 2021/INSC /347,
2021(3)J.L.J.R.322, (2021)5MLJ672, 2021(3)PLJR308, 2021(3)RC R(C ivil)552, 2021 (6) SC J 257, [2021]6SC R673, 2021(3)UC 1217

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7042 of 2019
Decided On: 22.07.2021
Appellants: Laureate Buildwell Pvt. Ltd.
Vs.
Respondent: Charanjeet Singh
Hon'ble Judges/Coram:
U.U. Lalit, Hemant Gupta and S. Ravindra Bhat, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Rajesh P., AOR, Prabhakar Tiwari and Manoranjan
Sharma, Advs.
For Respondents/Defendant: M.L. Lahoty, Paban K. Sharma, Anchit Sripat, Advs. and
Himanshu Shekhar, AOR
Overruled / Reversed:
HUDA v. Raje Ram MANU/SC/8534/2008
Case Note:
Consumer - Rights of subsequent purchaser - Non-delivery of possession -
Sale agreement between Purchaser and original allottee - Builder requested
to transfer flat in favour of Purchaser/ Respondent - Builder also
acknowledged undertaking from Respondent and payment - Delivery of
possession delayed - Refund of sale consideration sought - Impugned
judgment directed Appellant/ Builder to refund alongwith interest to
purchaser - Whether subsequent purchaser would not have any rights akin to
original allottee against the seller of property?
Facts:
The present matter related to delay in handing over of possession of the flat
booked. The original allottee made substantial payment towards sale
consideration as and when demanded. Apparently, allottee due to her own
compulsions could not continue to wait indefinitely for delivery of the flat,
having regard to the slow pace of construction. She entered into an sale
agreement with the purchaser/ Respondent. Builder endorsed and even
required the purchaser to execute the letter of undertaking, which he did.
With this development, the builder acknowledged that the rights and
entitlements of the original allottee relation to the flat were assumed by the
purchaser, and signified its obligations, correspondingly to the purchaser, as
the consumer. However, there was a slowdown in construction on account of
orders made by NGT. However, on the date relevant there were no directions
effective. Due to extending delay, purchaser demanded refund of the entire

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amount with interest. The same was allowed and thus the present appeal.
Held, while partly allowing the Appeal:
i. The nature and extent of relief, to which a subsequent purchaser can be
entitled to, would be fact dependent. However, it cannot be said that a
subsequent purchaser who steps into the shoes of an original allottee of a
housing project in which the builder has not honoured its commitment to
deliver the flat within a stipulated time, cannot expect any - even reasonable
time, for the performance of the builder's obligation. Such a conclusion would
be arbitrary, given that there may be a large number-possibly thousands of
flat buyers, waiting for their promised flats or residences; they surely would
be entitled to all reliefs under the Act. Therefore, in the event the purchaser
claims refund, on an assessment that he too can (like the original allottee) no
longer wait, and face intolerable burdens, the equities would have to be
moulded. It would no doubt be fair to assume that the purchaser had
knowledge of the delay. However, to attribute knowledge that such delay
would continue indefinitely, based on an a priori assumption, would not be
justified. The equities, in the opinion of this Court, can properly be moulded
by directing refund of the principal amounts, with interest @ 9% per annum
from the date the builder acquired knowledge of the transfer, or
acknowledged it. [31]
ii. In the present case, there is material on the record suggestive of the
circumstance that even as on the date of presentation of the present appeal,
the occupancy certificate was not forthcoming. In these circumstances, given
that the purchaser/Respondent had stepped into the shoes of the original
allottee, and intimated Laureate about this fact in April 2016, the interests of
justice demand that interest at least from that date should be granted, in
favour of the Respondent. The directions of the NCDRC are accordingly
modified in the above terms. [32]
iii. The impugned order of the NCDRC is modified in the above terms; the
appeal is partly allowed. [33]

ORDER
S. Ravindra Bhat, J.
1. The Appellant (hereafter called "Laureate" or "the builder") is aggrieved by an order
of the National Consumer Dispute Redressal Commission1 (hereafter "NCDRC"). The
Respondent (hereafter "the purchaser") had sought, through his complaint a direction
against the builder, for refund of the consideration amount of ' 1,93,70,883/- received
by the latter, as consideration for sale of a flat along with interest @ 24% p.a. from the
date different instalments were paid, as well as compensation and costs.
2 . The relevant facts are that one Ms. Madhabi Venkatraman (hereafter "the original
allottee") applied on 29.08.2012 for allotment of a residential flat (No. 7013, (hereafter
"the flat") admeasuring 4545 sq. ft., in Nectarine Tower "PARX LAUREATE" at Sector-
108, Expressway, Noida. The flat was to be developed by the builder (Laureate). She
paid the registration amount of ' 7,00,000/-. On 16.10.2012, an allotment letter was
issued to the original allottee, for the flat after deposit of ' 32,33,657/- out of the total

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sale consideration of ' 2,47,29,405/-. According to the allotment letter, the possession
of the flat was to be handed over within 36 months (from the date of allotment letter)
i.e., latest by 15.10.2015. The original allottee made payment to the tune of '
1,55,89,329/-, for the first seven instalments as demanded by Laureate. On 16.02.2015,
after noticing the slow pace of construction, the original allottee decided to sell the flat.
The purchaser who was in search of a residential flat was approached by her through a
broker. He was assured that the possession of the flat would be delivered on time, and
he agreed to purchase the flat and paid an amount of 1,00,000/- as advance towards
the total sale consideration of ' 1,55,89,329/-. The purchaser and the original allottee
agreed that the balance amount of sale consideration would be paid on or before
15.10.2015 and further that the purchaser would pay the outstanding instalments
beyond ' 1,55,89,329/- directly after transfer of the flat to him. Demand letters for two
instalments (Nos. 8 & 9) were issued by Laureate and payment to the tune of '
21,68,694/- was made by the original allottee.
3 . The purchaser alleged that possession was not delivered in October, 2015 as
promised (in the allotment letter). He decided to wait for the possession and not to
make any payment towards the sale; however, the original allottee insisted upon the
execution of an agreement to sell and demanded payment of instalments, which she had
made to the builder, stating that she could not wait any further and she would forfeit
the earnest money and cancel the deal. The purchaser alleged that he made enquiries
from the officials of the builder, who assured that the possession would be delivered by
June 2016. Therefore, the purchaser, on 17.02.2016, entered into an agreement of sale
with the original allottee, and paid an amount of ' 1,85,00,000/-.
4. The original allottee on 02.04.2016, requested the builder to transfer the flat in favor
of the Respondent. The purchaser submitted an undertaking dated 01.04.2016 duly
signed and executed by him, to the builder, Laureate. Later, Laureate issued a letter
dated 09.05.2016 to the purchaser, confirming the payment of ' 1,93,70,883/- towards
the purchase of the flat. Thereafter, the purchaser visited the site to acquaint himself
with the extent of construction but he was denied entry to the construction site by the
builder's employees citing security reasons and was informed that the work was in
progress and possession would be delivered shortly. The purchaser alleges that he
made telephonic inquiries from the office of the builder regarding possession, but
unavailingly, without any result. He claims to have visited the builder's office in last
week of January, 2017 and was informed that possession of the said flat could not be
delivered till the end of year 2017.
5. After this, the purchaser sought for refund of the amount paid, from the builder. On
08.03.2017, a legal notice was issued to the builder asking for refund of the amount of '
1,93,70,883/- with interest @ 24% p.a. from the various dates of deposit, was sought
by the purchaser, but in vain. He claims to have been shocked to receive the demand
letter for the 11th instalment for ' 10,92,628/-. On refusal of the payment of instalment,
the officials of the builder threatened the purchaser of cancellation and forfeiture of the
amounts paid. It is in these circumstances, that the Appellant approached the NCDRC,
for direction to the builder to refund the entire sum of ' 1,93,70,883/- with interest at
the rate of 24% from the respective dates when the instalments were paid to Laureate.
In addition, ' 5,00,000/- as compensation and ' 2,00,000/- as litigation expenses were
sought along with other costs.
6 . The builder, Laureate denied the claim, stating that for the period 28.03.2013 to
January 2016, (i.e. 26 months), there was complete slowdown in the construction of the

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projects in all of NOIDA including the buildings in question, due to the order passed by
National Green Tribunal (NGT) in OA/158/2013, and due to a notification issued by the
Ministry of Environment, Forests and Climate Change. The original allottee was aware of
the orders of the NGT, and the builder had sent several reminders for payment towards
the instalments and finally issued a notice on 17.10.2014 for cancellation of the
Provisional Allotment of Flat No. 7013. It was alleged that in view of Clause 13(7) of
the agreement neither Ms. Madhabi Venkatraman, the original allottee nor the
purchaser-Respondent who is endorsed by the original allottee was entitled to any
amounts for delay in construction. It was also alleged that on 02.04.2016, the original
allottee requested the builder to transfer flat No. 7013 in favour of the purchaser. The
purchaser furnished an undertaking on 01.04.2016 duly signed before the competent
authority, which makes it clear that both the original allottee and the purchaser were
aware of the order of the NGT and the delay in construction were beyond the control of
the purchaser. Therefore, their right to claim compensation is construed to be waived in
terms of Clause 13.
7. The builder further alleged that on commencement of 18th floor and 20th floor roof
slab, the 11th and 12th instalments were demanded from the Complainant and the same
was not paid. Therefore, the builder had a right to cancel the allotment. It is only on
account of the restrictive order dated 28.10.2013 passed by NGT on any construction
within the radius of 10 kilometres from Okhla Bird Sanctuary, that the builder could not
complete the project as the said project comes within the radius of 10 kilometres. In
view of Clause 13(5), the builder was entitled for extension of time for offer of
possession at such premises on account of force majeure conditions. Therefore, it is not
liable to pay any compensation.
8 . The NCDRC, after considering the depositions of the parties, through affidavits,
documentary evidence and the submissions of parties, noticed that the demand letter
for the 11th instalment was dated 24.03.2017, whereas the promised date of delivery
was 15.10.2015. That said letter stated that the construction stage 'on commencement
of 18th floor roof slab' of the tower had been achieved and therefore the 11th
instalment was demanded to be paid. This showed that even as on 24.03.2017, the
construction of the said tower was incomplete. The commission considered that Receipt
No. 306 dated 01.03.2016 shows that the original allottee had paid an amount of '
5,29,000/- towards penal interest charged by the Developer at the rate of 24% per
annum. The NCDRC rejected the plea that the original allottee was a defaulter. It
thereafter allowed the complaint, reasoning as follows:
2 0 . We find it a fit case to place reliance on the judgment of the Hon'ble
Supreme Court in Kolkata West International City Pvt. Ltd. v. Devasis Rudra,
MANU/SC/0429/2019 : II (2019) CPJ 29 (SC), wherein the Hon'ble Apex Court
has clearly laid down that a flat purchaser cannot be made to wait indefinitely
for seeking possession. Even in the instant case, though the promised date of
delivery was way back in the year 2015, even as on date, the tower is far from
completion.
2 1 . The Learned Counsel for the Complainant relied on the decision of this
Commission dated 11.01.2019 in Manmeet Singh and Anr. v. Unitech Hi-Tech
Developers Ltd. and Ors. (Consumer Complaint No. 1285 of 2017), wherein this
Commission has allowed refund of the principal amount with interest @ 10%
p.a.
22. For all the aforenoted reasons and the principal laid down by the Hon'ble

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 Supreme Court in Kolkata West International City Pvt. Ltd. (Supra) we are of
the considered view that the Complaint be allowed in part and we direct the
Developer to refund the amount deposited with the developer in respect of
subject flat No. 7013 with interest @ 10% p.a. from the respective dates of
deposit till the date of realisation together with the cost of ' 25,000/-.
Arguments of the parties
9. It is argued by Mr. Jayanth Mithras, learned Senior Counsel on behalf of the builder
that the relief granted by NCDRC is unwarranted. Highlighting that the entire project had
come to a standstill on account of an interim order by the NGT, the learned Senior
Counsel stressed that these facts were within the knowledge of the original allottee as
well as the purchaser. When they decided to purchase it in 2015, it was decided that the
Respondent would purchase the flat and step into the shoes of the original allottee.
Learned Senior Counsel argued that given these circumstances, the Respondent, as a
prudent purchaser, could not have reasonably expected the construction to be
completed till the interim orders were vacated and some time was allowed for the
construction to be completed. Clearly, the purchaser was only an investor and was not
interested in residing in the flat.
1 0 . Learned Senior Counsel submitted that barely a year after the transaction of
stepping into the shoes of the original allottee-which was endorsed by the builder, the
purchaser made an unreasonable demand for the refund of the entire amount. At that
point in time, the interim order of the NGT had been vacated. Quite naturally, therefore,
the construction had started and the builder made the demand on 23.04.2017 towards
subsequent instalments which were not paid. Although the purchaser sent a legal notice
prior to these demands, the fact remained that so long as he assumed responsibility as
an allottee, he could not shy away from fulfilling the demand towards the instalments.
11. Learned Senior Counsel argued that the purchaser could not claim the equities in
the same manner that an original allottee could. In the present case, the original
allottee had not paid the instalments in time and was constrained to pay penal interest -
a fact noted by the NCDRC. In these circumstances, there were no equities compelling
the NCDRC to grant any relief over and above a refund of compensation much less
interest @ 10% from the period the deposits were made by the original allottee.
12. Learned Senior Counsel submits that since the complainant was not the original
allottee but a subsequent purchaser, he could not claim any interest. He relied upon two
rulings of this Court in HUDA v. Raje Ram MANU/SC/8534/2008 : 2008 (17) SCC 407
and the recent judgment of this Court in Wing Commander Arifur Rahman Khan and Anr.
v. DLF Southern Homes Pvt. Ltd. It is submitted that in both these cases, this Court had
categorically ruled that when the allottee in a housing project transfers his or her rights
in favour of another, such a third party cannot claim equities to the same extent as the
original allottee, especially as regards a claim for interest. It was submitted by the
learned Senior Counsel that there is a sound public policy rationale in support of such a
Rule which is that a subsequent purchaser is deemed to be aware of the nature of
construction and the delay which occurred till the time he or she steps into the shoes of
the allottee. The NCDRC overlooked these binding rulings and directed payment of
interest for the entire period and clearly the Respondent purchaser was not entitled to
any interest at all.
1 3 . Mr. M.L. Lahoty, learned Counsel for the Respondent urged this Court not to
interfere with the findings and directions of the NCDRC. He highlighted that even if they

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were notified about the transfer by the original allottee in respect of the Respondent,
the builder had made demands towards penal interest, for various periods. A total
amount of ' 5.9 lakhs was in fact paid during the period 01.03.2016 to 18.04.2016. The
builder was made aware of the agreement to sell when its endorsement with respect to
the transfer was sought. Further, it was only after receiving the amounts towards the
so-called penal interest that the endorsement letter was ultimately issued on
09.05.2016 by the builder. This clearly confirmed ' 1,93,70,883/- was paid towards the
flat. This endorsement letter also confirmed that the Respondent purchaser would be
entitled to the delivery of the flat.
14. It is submitted that the purchaser had entered into an understanding and paid the
amounts towards the previous instalments as well as settled the later penal interest
component to the original allottee and also paid penal interest upto October 2016. In
these circumstances, it was not unreasonable for him to expect that project would be
complete and the flat would be handed over at least in the first part of 2017. However,
upon visiting the site and noticing that there was practically no progress, the
Respondent/purchaser was constrained to move the NCDRC for the relief of direction of
refunding the entire amount.
1 5 . Mr. Lahoty pointed to the findings and observations of the NCDRC which had
noticed the facts that although the NGT's interim order had subsisted for a while, and
the builder had taken shelter under it to say that construction could not take place, the
record indicated that the builder had sought for instalments from the original allottee,
including demanding penal interest. Given these facts, there were no equities in favour
of the builder; it was not open to it to claim that force majeure conditions operated and
prevented it from going ahead with the construction.
16. It was submitted that upon the endorsement by the builder of all the transactions,
and its acknowledgment, the purchaser had become entitled to seek delivery. There was
no impediment in the purchaser claiming any kind of relief. Mr. Lahoty submitted that if
for instance, there were to be any defect or deficiency in service, the purchaser could
not be discriminated against and an application or a plaint in that regard cannot be
dismissed as not maintainable. Likewise, the mere fact that a subsequent purchaser
steps into the shoes of an original allottee who might have at an earlier point of time
sought allotment but because of the delay in the construction, being unable to
withstand economic pressures withdrew, does not mean that the builder's default could
be glossed over. Learned Counsel urged that there is no Rule or principle to support the
judgment in Raje Ram (supra) or Wing Commander Arifur Rahman Khan and Anr.
(supra) to say that subsequent purchasers should never be given the relief of interest
on refunds. It was submitted that the refusal of the Court to grant relief have to be seen
in the light of the peculiar circumstances of those cases.
Analysis and Conclusions:
1 7 . The allotment letter dated 16.10.2012 assured the original allottee that the
possession of the flat would be handed over within 36 months i.e. on or before
15.10.2015. The original allottee made payment to the tune of ' 1,55,89,329/-, towards
the first seven instalments as and when demanded. Apparently, the allottee due to her
own compulsions could not continue to wait indefinitely for delivery of the flat, having
regard to the slow pace of construction. She therefore felt compelled to sell the flat. It
was then that the purchaser stepped in, and an agreement to sell was executed between
the parties on 17.02.2016. The original allottee thereafter approached the builder,
informing it that the purchaser had stepped into her shoes and would continue with the

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obligations, and was therefore entitled to possession. Significantly, the builder
endorsed and even required the purchaser to execute the letter of undertaking, which he
did. With this development, the builder acknowledged that the rights and entitlements
of the original allottee relation to the flat were assumed by the purchaser, and signified
its obligations, correspondingly to the purchaser, as the consumer.
18. In the meanwhile, there was a slowdown in construction, apparently, on account of
orders made by NGT. The builder alleged that the slowdown in construction was due to
the NGT's interim orders. However, what transpired was that on 28.10.2013, the NGT
imposed certain restrictions within 10 km radius of the Okhla Bird Sanctuary. The
application before the NGT was disposed on 03.04.2014. Consequently, there were no
directions after that date. A review application was filed before the NGT which remained
pending for some time; however, even at that stage there were no interim orders
requiring stoppage of construction. On 19.08.2015 the Ministry of Environment and
Forests issued a notification. The Appellant is unclear as to the effect of this
notification; apparently, it did not impede construction; the notification was challenged.
It is only on 05.07.2016, on account of an application preferred by an occupant of an
adjoining area that the NGT directed the builder not to carry on with the construction.
This, the builder informs in its appeal, was finally disposed of in January 2016.
19. The facts set out in the preceding paragraph demonstrate that on the one hand the
builder/Appellant is not categorical with respect to the existence of interim orders
enjoining it not to construct further. Rather, it appears that there was no construction of
the project for about six months. However, despite this position, it continued to demand
and received instalments. The purchaser entered the scene in 2016, waited for some
time and demanded refund of the entire amount with interest from the dates that
deposits were made. After receiving notice, the builder demanded further instalments. It
was in this background that the purchaser approached the NCDRC successfully with the
claim for refund. The claim for interest was allowed to the extent of 10% on the entire
amounts deposited from the respective dates of deposits.
20. The principal argument of the builder is the rights of a purchaser are not the same
as an original allottee. The builder Appellant cites Raje Ram and Arifur Rahman Khan
(supra).In the first decision Raje Ram, this Court declined to grant interest on a refund
claim made by a subsequent purchaser. The original allottee did not continue with the
allotment; the statutory authority/developer HUDA re-allotted the plot. The re-allottee
then approached the consumer forum which directed refund with interest. This Court
was of the opinion that when the subsequent purchaser, i.e. the re-allottee stepped into
the shoes of the original allottee, he was aware of the delay in handing over the
possession which had occurred and therefore could no longer claim the time of the
delay. In Arifur Rahman Khan (supra) several allottees approached the Court. This Court
did not grant relief to the subsequent purchasers who stepped into the shoes of the
original allottees, citing Raje Ram.
21. The relevant discussion in Raje Ram is as follows:
1 4 . The Appellants challenged the said orders of the State Commission
contending that no interest was payable. The National Consumer Disputes
Redressal Commission by its non-speaking orders dated 27-8-2002, 30-9-2002
and 27-8-2002, disposed of the said revisions filed by the Development
Authority, in terms of its earlier decision in HUDA v. Darsh Kumar [RP No. 1197
of 1998 decided on 31-8-2001 (NC)] by merely observing that it had upheld the
award of interest up to 18% per annum in similar circumstances. The National

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 Commission did not refer to or consider the facts of these cases. The said
orders are challenged in these appeals by special leave. The common issue in
all these cases is whether interest could have been awarded against the
Appellant, and if so whether the rate of interest is excessive.
15. The decision of the National Commission in Darsh Kumar [RP No. 1197 of
1998 decided on 31-8-2001 (NC)], followed in the impugned orders, did not
find favour of this Court in HUDA v. Darsh Kumar [MANU/SC/0634/2004 :
(2005) 9 SCC 449]. This Court observed that (at SCC p. 451, para 7) where
possession is given at the old rate, the party has got the benefit of escalation in
price of land, and therefore, there cannot and should not be award of interest
on the amounts paid by the allottee on the ground of delay in allotment. On the
special facts of that case, this Court however awarded compensation for
harassment/mental agony.
16. The Respondents in the three appeals are not the original allottees. They
are re-allottees to whom reallotment was made by the Appellant in the years
1994, 1997 and 1996 respectively. They were aware, when the plots were
reallotted to them, that there was delay (either in forming the layout itself or
delay in delivering the allotted plot on account of encroachment, etc). In spite
of it, they took reallotment. Their cases cannot be compared to the cases of the
original allottees who were made to wait for a decade or more for delivery and
thus put to mental agony and harassment. They were aware that time for
performance was not stipulated as the essence of the contract and the original
allottees had accepted the delay.
22. In Arifur Rahman Khan, the court observed as follows:
43. Similarly, the three Appellants who have transferred their title, right and
interest in the apartments would not be entitled to the benefit of the present
order since they have sold their interest in the apartments to third parties. The
written submissions which have been filed before this Court indicate that "the
two buyers stepped into the shoes of the first buyers" as a result of the
assignment of rights and liabilities by the first buyer in favour of the second
buyer. In HUDA v. Raje Ram [HUDA v. Raje Ram, MANU/SC/8534/2008 :
(2008) 17 SCC 407: (2009) 5 SCC (Civ) 889], this Court while holding that a
claim of compensation for delayed possession by subsequent transferees is
unsustainable, observed that: (SCC p. 410, para 16)
16. The Respondents in the three appeals are not the original allottees.
They are re-allottees to whom reallotment was made by the Appellant
in the years 1994, 1997 and 1996 respectively. They were aware, when
the plots were reallotted to them, that there was delay (either in
forming the layout itself or delay in delivering the allotted plot on
account of encroachment, etc.). In spite of it, they took reallotment.
Their cases cannot be compared to the cases of the original allottees
who were made to wait for a decade or more for delivery and thus put
to mental agony and harassment. They were aware that time for
performance was not stipulated as the essence of the contract and the
original allottees had accepted the delay.
Even if the three Appellants who had transferred their interest in the apartments
had continued to agitate on the issue of delay of possession, we are not

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 inclined to accept the submission that the subsequent transferees can step into
the shoes of the original buyer for the purpose of benefiting from this order.
The subsequent transferees in spite of being aware of the delay in delivery of
possession the flats, had purchased the interest in the apartments from the
original buyers. Further, it cannot be said that the subsequent transferees
suffered any agony and harassment comparable to that of the first buyers, as a
result of the delay in the delivery of possession in order to be entitled to
compensation.
2 3 . The builder does not deny that upon issuance of the endorsement letter, the
purchaser not only stepped into the shoes of the original allottee but also became
entitled to receive possession of the flat. There is no denial that the purchaser fulfils the
description of the complainant/consumer and is entitled to move any forum under the
Consumer Protection Act for any deficiency in service. The question then is whether a
subsequent purchaser is not entitled to similar treatment as the original allottee, and
can be denied relief which otherwise the original allottee would have been entitled to,
had she or he continued with the arrangement. An individual such as the original
allottee, enters into an agreement to purchase the flat in an on-going project where
delivery is promised. The terms of the agreement as well as the assurance by the
builder are that the flat would be made available within a time-frame. It is
commonplace that in a large number of such transactions, allottees are not able to
finance the flat but seek advances and funds from banks or financial institutions, to
which they mortgage the property. The mortgage pay-outs start initially after an agreed
period, commencing in a span of about 15 to 24 months after the agreement. This
would mean that in most cases, allottees start repaying the bank or financial institutions
with instalments (mostly equated monthly instalments) towards the principal and the
interest spread over a period of time, even before the flats are ready. If these facts are
taken into consideration, prolongation of the project would involve serious economic
repercussions upon such original allottees who are on the one hand compelled to pay
instalments and, in addition, quite often-if she or he is in want of a house-also pay
monthly rents. Such burdens become almost intolerable. It is at this point that an
indefinite wait is impossible and allottees prefer to find purchasers who might step into
their shoes. That such purchasers take over the obligations of the original allottee -
either to pay the balance instalments or to wait for sometime, would not per se exclude
them from the description of a consumer. All that then happens is that the consumer
forum or commission - or even courts have to examine the relative equities having
regard to the time frame in each case.
24. In a larger five judge bench ruling in Economic Transport Organization v. Charan
Spinning Mills (P) Ltd. MANU/SC/0113/2010 : (2010) 4 SCC 114, the question was
whether an insurer, who honours its contract, and pays the insured the agreed money,
in the event of an insurable incident such as an accident, can maintain a consumer
complaint against the carrier, who is responsible for the accident. This Court held that
such complaints are not barred:
29. In all three types of subrogation, the insurer can sue the wrongdoer in the
name of the assured. This means that the insurer requests the assured to file
the suit/complaint and has the option of joining as co-Plaintiff. Alternatively,
the insurer can obtain a special power of attorney from the assured and then to
sue the wrongdoer in the name of the assured as his attorney.
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3 7 . Whether the document executed by the assured in favour of the insurer is a
subrogation simpliciter, or a subrogation-cum-assignment is relevant only in a dispute
between the assured and the insurer. It may not be relevant for deciding the
maintainability of a complaint under the Act. If the complaint is filed by the assured
(who is the consumer), or by the assured represented by the insurer as its attorney
holder, or by the assured and the insurer jointly as complainants, the complaint will be
maintainable, if the presence of insurer is explained as being a subrogee. Whether the
amount claimed is the total loss or only the amount for which the claim was settled
would make no difference for the maintainability of the complaint, so long as the
consumer is the complainant (either personally or represented by its attorney-holder) or
is a co-complainant along with his subrogee.
38. On the other hand, if the assured (who is the consumer) is not the complainant,
and the insurer alone files the complaint in its own name, the complaint will not be
maintainable, as the insurer is not a "consumer", nor a person who answers the
definition of "complainant" under the Act. The fact that it seeks to recover from the
wrongdoer (service provider) only the amount paid to the assured and not any amount
in excess of what was paid to the assured will also not make any difference, if the
assured-consignor is not the complainant or co-complainant. The complaint will not be
maintainable unless the requirements of the Act are fulfilled. The remedy under the Act
being summary in nature, once the consumer is the complainant or is a co-complainant,
it will not be necessary for the Consumer Forum to probe the exact nature of
relationship between the consumer (assured) and the insurer, in a complaint against the
service provider.
****************** **************
40. If in a summary proceedings by a consumer against a service provider, the insurer
is added as a co-complainant or if the insurer represents the consumer as a power-of-
attorney, there is no need to examine the nature of rights inter se between the
consumer and his insurer. When the complaint is by the consignor-consumer, with or
without the insurer as a co-complainant, the service provider cannot require the
Consumer Forum to consider the nature of relationship between the assured and the
insurer or the nature and true purport of the document produced as a letter of
subrogation. A wrongdoer cannot side-track the issue before the Consumer Forum. Once
the "consumer", that is the assured, is the complainant, the complaint will be
maintainable subject to fulfilment of the requirements of the Act.
2 5 . In another decision, Canara Bank v. United India Insurance Co. Ltd.
MANU/SC/0131/2020 : (2020) 3 SCC 455 the issue which this Court had to consider
was whether the insurer could repudiate liability in respect of a fire which destroyed
farm produce kept in a cold storage, when the farmers had no privity with the insurer,
but with the cold storage, and who availed credit on the security of the crop. The court
held as follows:
28. Taking the issue of privity of contract, we are of the considered view that
as far as the Act is concerned, it is not necessary that there should be privity of
contract between the Insurance Company and the claimants. The definition of
"consumer" Under Section 2(d) quoted hereinabove is in two parts. Sub-clause
(i) of Section 2(1)(d) deals with a person who buys any goods and includes
any user of such goods other than the person who buys such goods as long as
the use is made with the approval of such person. Therefore, the definition of
consumer even in the first part not only includes the person who has purchased

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 but includes any user of the goods so long as such user is made with the
approval of the person who has purchased the goods. As far as the definition of
"consumer" in relation to hiring or availing of services is concerned, the
definition, in our view, is much wider. In this part of the section, consumer
includes not only the person who has hired or availed of the services but also
includes any beneficiary of such services. Therefore, an insured could be a
person who hires or avails of the services of the Insurance Company but there
could be many other persons who could be the beneficiaries of the services. It
is not necessary that those beneficiaries should be parties to the contract of
insurance. They are the consumers not because they are parties to the contract
of insurance but because they are the beneficiaries of the policy taken out by
the insured.
29. The definition of "consumer" under the Act is very wide and it includes
beneficiaries who can take benefit of the insurance availed by the insured. As
far as the present case is concerned, under the tripartite agreement entered
between the Bank, the cold store and the farmers, the stock of the farmers was
hypothecated as security with the Bank and the Bank had insisted that the said
stock should be insured with a view to safeguard its interest..
26. If one also considers the broad objective of the Consumer Protection Act, which is
to provide for better protection of the interests of consumers and for that purpose,
provide for the establishment of Consumer Councils and other authorities for the
settlement of consumer disputes and for matters connected therewith, as evident from
the Statement of Objects and Reasons of the Act. The Statement further seeks inter alia
to promote and protect the rights of consumers such as--
(a) The right to be protected against marketing of goods which are hazardous
to life and property;
(b) the right to be informed about the quality, quantity, potency, purity,
standard and price of goods to protect the consumer against unfair trade
practices;
(c) the right to be assured, wherever possible, access to variety of goods at
competitive prices;
(d) the right to be heard and to be assured that consumers' interests will
receive due consideration at appropriate forums;
(e) the right to seek redressal against unfair trade practice or unscrupulous
exploitation of consumers; and
(f) right to consumer education.
27. In Lucknow Development Authority v. M.K. Gupta MANU/SC/0178/1994 : (1994) 1
SCC 243 this Court held:
The importance of the Act lies in promoting welfare of the society by enabling
the consumer to participate directly in the market economy. It attempts to
remove the helplessness of a consumer which he faces against powerful
business, described as, 'a network of rackets' or a society in which, 'producers
have secured power' to 'rob the rest' and the might of public bodies which are
degenerating into storehouses of inaction where papers do not move from one

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 desk to another as a matter of duty and responsibility but for extraneous
consideration leaving the common man helpless, bewildered and shocked.
28. It was further held that
The Act thus aims to protect the economic interest of a consumer as understood
in commercial sense as a purchaser of goods and in the larger sense of user of
services. ... It is a milestone in history of socio-economic legislation and is
directed towards achieving public benefit.
2 9 . This Court has further observed in State of Karnataka v. Vishwabharathi House
Building Coop. Society MANU/SC/0033/2003 : (2003) 2 SCC 412, that (the) "provisions
of the said Act are required to be interpreted as broadly as possible. It has jurisdiction
to entertain a complaint despite the fact that other forums/courts would also have
jurisdiction to adjudicate upon the lis"2
30. It is therefore evident that the Consumer Protection Act, 1986 was conceived as a
legislation to address complaints of consumers (an expression defined and interpreted
widely) and provide a forum for their quick redressal, and, furthermore, wherever third
parties have claimed relief, technicalities have been brushed aside consistently, by this
Court. Thus, even after an original consumer is indemnified for a fire accident, the
insurer can maintain a complaint against the carrier/service provider, and claim
damages (of course along with the insured party). Likewise, absence of privity of
contract is not a bar for maintaining a complaint against a service provider, by a third
party who suffers an incident, which is otherwise covered by an agreement. This Court
has also ruled, recently3 that proceedings initiated by complainants and resultant
actions including of the NCDRC are fully saved by provisions of the Real Estate
Regulatory Authority Act, 2019.
31. In view of these considerations, this Court is of the opinion that the per se bar to
the relief of interest on refund, enunciated by the decision in Raje Ram (supra) which
was applied in Wg. Commander Arifur Rehman (supra) cannot be considered good law.
The nature and extent of relief, to which a subsequent purchaser can be entitled to,
would be fact dependent. However, it cannot be said that a subsequent purchaser who
steps into the shoes of an original allottee of a housing project in which the builder has
not honoured its commitment to deliver the flat within a stipulated time, cannot expect
any - even reasonable time, for the performance of the builder's obligation. Such a
conclusion would be arbitrary, given that there may be a large number-possibly
thousands of flat buyers, waiting for their promised flats or residences; they surely
would be entitled to all reliefs under the Act. In such case, a purchaser who no doubt
enters the picture later surely belongs to the same class. Further, the purchaser agrees
to buy the flat with a reasonable expectation that delivery of possession would be in
accordance within the bounds of the delayed timeline that he has knowledge of, at the
time of purchase of the flat. Therefore, in the event the purchaser claims refund, on an
assessment that he too can (like the original allottee) no longer wait, and face
intolerable burdens, the equities would have to be moulded. It would no doubt be fair
to assume that the purchaser had knowledge of the delay. However, to attribute
knowledge that such delay would continue indefinitely, based on an a priori
assumption, would not be justified. The equities, in the opinion of this Court, can
properly be moulded by directing refund of the principal amounts, with interest @ 9%
per annum from the date the builder acquired knowledge of the transfer, or
acknowledged it.

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32. In the present case, there is material on the record suggestive of the circumstance
that even as on the date of presentation of the present appeal, the occupancy certificate
was not forthcoming. In these circumstances, given that the purchaser/Respondent had
stepped into the shoes of the original allottee, and intimated Laureate about this fact in
April 2016, the interests of justice demand that interest at least from that date should
be granted, in favour of the Respondent. The directions of the NCDRC are accordingly
modified in the above terms.
33. The impugned order of the NCDRC is modified in the above terms; the appeal is
partly allowed. There shall be no order on costs.

1 InConsumer case No. 1183/2017, decided on 29-05-2019

2 ThisCourt also relied on Fair Air Engineers (P) Ltd. v. N.K. Modi [MANU/SC/0141/1997
: (1996) 6 SCC 385] and Satpal Mohindra v. Surindra Timber Stores
[MANU/SC/0961/1999 : (1999) 5 SCC 696
3 Imperia Structures Ltd. v. Anil Patni, MANU/SC/0811/2020 : (2020) 10 SCC 783

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