SC modifies NCDRC order, says too much to ask developer to execute sale deed after 16 years

The Supreme Court on Friday said it would be “too much” to ask a developer to execute the deed of a property by accepting the balance amount of Rs 6.49 lakh after 16 years.

The apex court modified the order of the National Consumer Disputes Redressal Commission (NCDRC), which had directed the builder to hand over the possession of the house situated in Nagpur to the complainant and execute the deed after receiving the occupation certificate.

In its judgment in December 2019, the NCDRC had also directed the complainant to pay the sale proceeds of Rs 6.49 lakh within four weeks to the developer.

In its judgment delivered on an appeal by the developer against the NCDRC order, the Supreme Court observed that almost 16 years have passed since the parties entered into a contract and it is not disputed that the complainant has failed to make the full payment towards the purchase of the house.

“We are of the view that it will be too much at this stage i.e. after a period of almost 16 years to request the appellant herein to execute the sale deed by accepting the balance of Rs 6,49,220,” a bench said. by Justices DY Chandrachud and JB Pardiwala.

“We are of the view that the ends of justice would be served if we order the appellant herein to refund the amount of Rs 3,24,780 with interest at 12 per cent per annum to the original complainant and put an end to the entire litigation,” it said.

The Supreme Court observed that the original complainant had filed a complaint under Section 12 of the Consumer Protection Act, 1986, before the District Consumer Disputes Redressal Forum at Nagpur and had said that he and the builder had entered into a contract in connection with the purchase of a house .

The complainant had entered into an agreement dated June 8, 2006 with the developer for a total sale consideration of Rs.9.74 lakh.

The court noted that the understanding between the parties was that the complainant would pay Rs 4,23,520 in cash to the developer and the balance amount of Rs. 5.50 lakh would be paid after the complainant would get the loan disbursed from the bank.

The bank sanctioned the loan of Rs 6.40 lakh in favor of the complainant in November 2006 but the same was never actually disbursed and later a dispute arose between the parties.

The builder was directed by the district forum to complete the construction in accordance with the agreement and hand over his possession to the complainant on execution of the sale deed as per the terms of the contract. The developer later approached the NCDRC.

In its judgement, the Supreme Court observed that the agreement for sale was entered into in June 2006 and the loan came to be sanctioned by the bank in November 2006, but the complainant did not take any further steps to ensure that the sanctioned amount was paid to the developer.

It noted that the respondents, including the original complainant, have chosen not to remain present before it, either in person or through counsel, to oppose the appeal despite being served with the notice by the court.

The bench observed that the NCDRC had stayed the district forum’s order till final disposal of the revision petition on the condition that the developer would deposit Rs 3,24,780 with interest at 12 per cent per annum from the respective deposit dates.

It said the NCDRC had passed the order in December 2019 and till date the complainant has not come forward to pay the sale amount of Rs 6.49 lakh to the developer.

“The impugned order passed by the National Consumer Commission dated December 12, 2019 is hereby modified to the extent that the appellant herein shall pay the sum of Rs.3,24,780 to the original complainant with interest at the rate of 12 per cent per annum from the date of the agreement to sell , i.e. June 8, 2006,” the apex court said.

It said once this amount is paid, there shall be no further liability of the developer in any respect in respect of the property.

While dismissing the complaint, the bench said that it will be open to the developer to seek refund of the amount deposited by it with the NCDRC, to be paid to the complainant.

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