Consumer Courts Have Power To Direct The Builder/Developer To Give Refund To The Homebuyers

Case Details: Experion Developers Pvt. Ltd. vs Sushma Ashok Shiroor (Civil Appeal No. 6044 of 2019 and Civil Appeal No. 7149 of 2019)

Court: Hon'ble Supreme Court of India

Rationes: 1. The Consumer Courts can set aside the agreements between builders and homebuyers if the clauses of the agreements are one sided. A homebuyer is not bound to accept possession of the apartment, and can seek refund of the amount paid with interest;

2. The Consumer Courts have the power and jurisdiction to direct return of the money if a homebuyer so elects. The freedom to choose the necessary relief is of the Consumer/homebuyer and it is the duty of the Courts to honor it; and

3. The Consumer Protection Act, 1986 and Real Estate (Regulation and Development) Act, 2016 neither exclude nor contradict one another, and both must be read harmoniously to subserve their common purpose.

Judgment date: April 7, 2022

Act/Law:   Consumer Protection Act, 1986

Factual Matrix:

• M/s. Experion Developers Pvt. Ltd. (‘Experion') was the promoter and developer of apartment units Windchants in Sector 112, Gurugram, Haryana (‘Project');

• Sushma Ashok Shiroor (‘Sushma') booked an apartment measuring 2,525 sq. ft for a total consideration of Rs. 2,36,25,726/- in the Project and agreed for construction linked payment plan. Accordingly, an Apartment Buyer's Agreement dated December 26, 2012 (‘Agreement') was executed between the parties. As per Clause 10.1 of the Agreement, the possession of the apartment was to be given to Sushma by Experion within 42 months from the date of approval of the building plan or from the date of approval received from the Ministry of Environment and Forest, Government of India for the Project or from the date of execution of the Agreement, whichever was later;

• Experion failed to deliver the possession of the apartment within the period stipulated in the Agreement;

• Sushma approached NCDRC for refund of Rs. 2,06,41,379/- along with interest @ 24% p.a. Experion filed a written statement submitting that the period of 42 months from the date of the Agreement expired on June 26, 2016 and Sushma was only entitled to a compensation of an amount of Rs. 4,54,052/- for delay in possession. Experion further stated that the occupation certificate for the Project was acquired by them on July 23, 2018 and it issued the notice of possession to Sushma on July 24, 2018. Experion prayed before the NCDRC for dismissal of the complaint on account of notice of possession being issued and the apartment being ready for being handed over to the Sushma;

• The NCDRC allowed the complaint on account of Clauses 10.1, 11 and 13 of the Agreement. NCDRC observed that the Agreement was one sided and in the favor of  Experion. Following the decision passed by the Hon'ble Supreme Court in the case of Pioneer Urban Land and Infrastructure Pvt. Ltd., the NCDRC directed Experion to refund the amount and pay interest @ 9% p.a. vide judgement dated June 19, 2019

• Aggrieved by the aforesaid decision of the NCDRC, Experion filed an appeal before the Hon'ble Supreme Court. Sushma also filed an appeal seeking interest at a higher rate.

Upon consideration, the Hon'ble Supreme Court of India pronounced a detailed judgment on April 7, 2022, with the rationes/decision as stated above.

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