SC denies relief, developer told to compensate allottees

  • Nikhil Sharma, Hindustan Times, Chandigarh
  • Updated: Oct 20, 2015 09:48 IST

Citing the recent order of the apex court, the Chandigarh bench of the state consumer disputes redressal commission has directed Sector 26-based Parsvnath Developers Limited to pay compensation to aggrieved consumers in four different cases.

Earlier, the developer had knocked at the door of the national commission and the Supreme Court, challenging the order of compensation passed by the state commission.

In one such case, titled Jyoti Sood vs Parsvnath Developers Limited and Chandigarh Housing Board (CHB), the commission, on September 12 last year, had directed the opposite parties to refund the amount paid by the complainant for the purchase of property and also to pay compensation for their failure in delivery of the service as promised, within five weeks.

In its recent order, supporting the contention of the national and state consumer disputes redressal commissions, the apex court has stated that buyers should not be made to suffer and are entitled to get the compensation as per the agreement. Further, if any benefit has to be given to any of the defendants (opposite parties) in the arbitration award passed, it can be recovered later from the other defendants, as per law.

The order has also cleared the air over the “authority” of the state commission in pronouncing the compensation to the complainant in arbitration cases, since in a large number of cases, the defendants had opposed to it.

The case

A development agreement was executed between the Parsvnath Developers Limited and the CHB on October 6, 2006, for development of 123.79 acres of land by the former. By giving a “very rosy picture” of the project “Parsvnath Prideasia”to be developed at Rajiv Gandhi Chandigarh Technology Park, applications were invited for allotment. People applied for a built-up residential unit consisting of 3,700-square-foot super area for an amount of Rs 2.57 crore. At the time of moving the application, an amount of `12.85 lakh was paid as earnest money.

The flat buyer agreement

The flat buyer agreement was executed between the complainants and the opposite parties (developer and CHB) on December 4, 2008. As per clause 9(a) of the agreement, the construction of the residential units was likely to be completed within a period of 36 months from the date of signing of the development agreement. The complainants adopted construction-linked payment plan and paid an amount of Rs 70.28 lakh by the end of 2009. However, as per admitted facts, by that time, even the foundation of the unit to be constructed, was not laid. It is also an admitted fact that on account of some dispute between the opposite parties, the project failed. After waiting for a sufficient long period, the applicants filed a complaint before the state commission on July 15, 2014, seeking refund of the amount paid by them along with interest and penalty amount for delay in handing over the possession of the built-up unit. Before filing of this complaint, the CHB had already paid Rs 21.08 lakh to the applicants on July 7, 2014, towards its 30% share. The amount was paid along with interest amounting to Rs 9.97 lakh.

State commission order

The state commission, on September 12 last year, directed the developer to refund an amount of Rs 49.20 lakh along with interest at the SBI term deposit rate from the respective dates of deposits made till the realisation of the amount. The CHB was directed to pay interest at the same rate on an amount of Rs 21.08 lakh for the period from the respective dates of deposits till July 7, 2014. It was further ordered that the developer should also make payment towards compensation at the rate of Rs 10 per square feet of the super area of the unit, per month, from October 6, 2009, i.e. the last date of completion of the project till actual payment is made to the applicants. Following this, the developer appealed against this and other similar orders before the national commission. After getting a unfavourable order from the national commission, the developer had appealed in the Supreme Court.

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