
CITATION | 2024 INSC 300 |
DATE OF JUDGMENT | 10th April 2024 |
COURT | Supreme Court of India |
APPELLANT | Sanjay Chaudhary and Anr. |
RESPONDENT | Pioneer Urban Land and Infrastructure Ltd and Anr. |
BENCH | J. B.R. Gavai , J. Sandeep Mehta |
INTRODUCTION
In Sanjay Chaudhary and Others v. Pioneer Urban Land & Infrastructure Ltd. And Others [Civil Appeal No(s). 1454 of 2023], a consumer complaint concerning the delayed possession of a residential flat is at the centre of the action. By June 23, 2014, 90% of the entire sale consideration for a flat created by the respondent, Pioneer Urban Land & Infrastructure Ltd., had been paid by the appellants, Sanjay Chaudhary and another individual. Consumer Case No. 612 of 2018 was filed by the appellants with the National Consumer Disputes Redressal Commission (NCDRC) after the respondent neglected to handover ownership of the flat by the scheduled date of March 16, 2014, despite the large payment made. The appellants’ complaint was partially granted by the NCDRC in an order dated January 23, 2023. It ordered the respondent to produce an updated account statement that credits the appellants for their delayed compensation and levies annual interest charges of 9% on the remaining amount (exclusive of stamp duty and registration fees) from November 14, 2017, until the balance is paid. This ruling required the respondent to complete the conveyance deed and turn over possession to the complainants once they deposited the remaining cash within a month. The appellants filed a Supreme Court petition contesting this ruling, citing the interest charge on the outstanding debt in particular. The appellants’ argument was deemed to have merit by the Supreme Court, which was presided over by Justices Mehta and B.R. Gavai. The respondent was instructed to surrender the unpaid sum and effectuate the transfer of possession expeditiously upon payment by the Court, which invalidated the NCDRC’s directive permitting the respondent to charge interest on April 10, 2024. These changes were made in the appeal’s disposition to guarantee that the appellants’ complaints were taken care of.
FACTS OF THE CASE
- 1. The main point of contention in Sanjay Chaudhary and Anr. Vs. Pioneer Urban Land & Infrastructure Ltd. And Anr. [Civil Appeal No(s). 1454 of 2023] is the delay in receiving possession of a residential flat. In order to purchase a flat with a super area of 4111 square feet, the respondent, Pioneer Urban Land & Infrastructure Ltd., and the appellants, Sanjay Chaudhary and another individual, entered into an agreement. With all utilities included, the flat was sold for a total of Rs. 2,38,20,932.
- The appellants paid around Rs. 2,21,56,942.42, or roughly 90% of the total transaction consideration, by June 23, 2014. Respondent-developer did not handover possession of the flat by the March 16, 2014, deadline, even after receiving a sizable payment. Following this setback, the appellants filed Consumer Case No. 612 of 2018 with the National Consumer Disputes Redressal Commission (NCDRC).
- The NCDRC rendered an order on January 23, 2023, that was somewhat favourable to the appellants. As of November 13, 2017, the appellants were credited with delayed compensation of Rs. 2,433,120 by the Commission, which required the respondent to prepare a new statement of account. Moreover, from November 14, 2017, until the payment date, the Commission permitted the respondent to impose interest at the rate of 9% annually on the outstanding balance (excluding of stamp duty and registration fees). The respondent was to execute the transfer deed and turn over possession of the flat after the complainants had a month to submit the remaining balance.
- The appellants filed an appeal with the Supreme Court after being offended by the interest charge direction. They argued that, in light of the respondent’s possession delay, the interest charge on the unpaid sum was unfair. The NCDRC’s order allowing the respondent to charge interest at 9% annually starting on November 14, 2017, was invalidated by the Supreme Court following the hearing of arguments. After final payment, the respondent has 30 days to turn over possession of the flat and deliver the remaining cash to the appellants, per the court’s directive.
ISSUES RAISED
- Did possession arrive with an unreasonable delay?Even though the appellants paid 90% of the total transaction consideration by June 23, 2014, did the respondent-developer fail to give the appellants ownership of the flat by the specified date of March 16, 2014?
- Is the interest charged on the balance due appropriate?Given the respondent’s role in the delay in possession, was the National Consumer Disputes Redressal Commission’s (NCDRC) order permitting the respondent-developer to charge interest at the rate of nine percent annually on the remaining amount (exclusive of stamp duty and registration fees) from November 14, 2017, until the payment date justified?
- Did the late payment provide sufficient compensation? Considering the length of the delay and the financial impact on the appellants, was the NCDRC’s directed delayed compensation of Rs. 2,433,120 as of November 13, 2017, reasonable and appropriate?
- Were the conditions for signing the deed of conveyance and transferring ownership reasonable?Given the extended delay that the appellants had already endured, were the terms established by the NCDRC—that the appellants must deposit the outstanding sum within a month, and that the respondent must then execute the conveyance document and turn over possession of the apartment—fair and reasonable?
CONTENTIONS OF APPELLANT
- Despite having collected 90% of the entire transaction consideration by June 23, 2014, the appellants claimed that the respondent-developer had not given ownership of the flat by the scheduled date of March 16, 2014. The appellants’ decision to bring a consumer complaint was prompted by this notable delay in possession.
- The NCDRC’s directive, which permitted the respondent-developer to levy interest on the outstanding balance (exclusive of stamp duty and registration fees) from November 14, 2017, until the date of payment, was contested by the appellants. Since the respondent was the only reason for the possession delay, they contended that it was unfair to punish them with such interest.
- The appellants inferred that even though the NCDRC ordered the respondent to credit delayed compensation of Rs. 2,433,120 as of November 13, 2017, this amount might not adequately alleviate the hardship and inconvenience they had experienced as a result of the protracted delay.
- The requirement that the appellants pay the remaining balance within a month in order to expedite the conveyance deed’s execution and the transfer of possession infuriated them. Taking into account the lengthy delay they had previously experienced, they looked for a more favourable outcome.
CONTENTIONS OF RESPONDENT
- From November 14, 2017, to the date of payment, the respondents defended the National Consumer Disputes Redressal Commission’s (NCDRC) order to levy interest at the rate of 9% annually on the outstanding balance (exclusive of stamp duty and registration fees). They said that this interest charge was appropriate in order to make up for the payment’s delay.
- The respondents argued that the appellants’ credit of Rs. 2,433,120 as of November 13, 2017, covered them adequately for the delay in transferring possession. They argued that this sum adequately compensated the appellants for the inconvenience and financial harm caused by the delay.
- The respondents stated that they were ready to abide by the NCDRC’s directive, which called for them to issue a new statement of account and execute the conveyance deed as soon as the appellants deposited the outstanding balance within the allotted period.
- The respondents stressed that, upon fulfilment of the financial obligations as stipulated by the NCDRC, they would be happy to transfer ownership of the property to the appellants, fully furnished. They maintained that in order for the conveyance deed to be executed and possession to be transferred, the appellants had to comply with the unpaid payment.
- According to the respondents, the interest charge on the outstanding balance is a customary procedure that guarantees fair treatment and financial parity between the developers and the homebuyers. Given the delay in getting the entire payment from the buyers, they contended that this method safeguarded the developer’s financial interests.
JUDGEMENT
The Supreme Court concluded that the appellants’ argument about the interest charge had substance. The National Consumer Disputes Redressal Commission (NCDRC) order allowing the respondent-developer to charge interest at a rate of nine percent (9% APR) on the outstanding balance (exclusive of stamp duty and registration charges) from November 14, 2017, until the date of payment was quashed and set aside by the court. The Court determined that since the respondent was responsible for the appellants’ possession delay, it was unfair to charge them interest. Within two months of the judgement date, the respondents were ordered by the court to pay the appellants the remaining money. This was done to guarantee that the appellants would not be burdened by an unwarranted interest charge and would have clarity on the remaining financial commitments.
Following the final payment being paid, respondents were ordered to give the appellants ownership of the flat as soon as possible, but no later than 30 days. By issuing this direction, the appellants would acquire possession as soon as possible, thus speeding up the process. In addressing the appellants’ complaints and guaranteeing a just settlement of the disagreement, the appeal was handled in the manner described above. In order to settle the outstanding amount and make it easier for possession to be transferred as instructed, the Court stressed that the respondents needed to move quickly. The Court resolved all outstanding applications pertaining to the matter, bringing the legal processes to a close and giving both parties a clear route forward.
On April 10, 2024, Justices B.R. Gavai and Sandeep Mehta delivered a judgement that attempted to address the disparity brought about by the contested interest charge and the delayed possession, making sure that the appellants would not be unduly burdened and could promptly take possession of their flat.
ANALYSIS
- In cases involving delayed possession, the Court highlighted how important it is to protect buyers’ rights. It was mentioned that the buyers had fulfilled the majority of their financial commitments because they had paid 90% of the sale price. They suffered needlessly as a result of the delay, underscoring the need of ensuring equitable treatment in real estate.
- The Supreme Court decided that in order to make up for their own delays, developers may not force homeowners to bear further financial obligations. The NCDRC’s judgement enabling the developer to charge 9% interest on the outstanding sum was overturned by the Court, setting a precedent that such charges need to be justified.
- In an effort to settle the matter peacefully and quickly, the Court directed the developer to transfer ownership within 30 days of the last payment and to pay the remaining balance within two months. This shields consumers against protracted financial and unpredictable circumstances.
- The ruling guarantees both sides’ fair behaviour. The buyers’ obligation to pay the outstanding amount and their protection from unjustified interest charges were mandated by the Court, underscoring the importance of everyone’s cooperation and good faith.
- The way that customer complaints are handled in real estate is significantly changed by this case. Customers are empowered to contest unfair practices and seek judicial intervention, and developers are cautioned about the consequences of charging buyers for delays.
CONCLUSION
In Sanjay Chaudhary and Others v. Pioneer Urban Land & Infrastructure Ltd. And Others [Civil Appeal No(s). 1454 of 2023], the Supreme Court of India rendered a decision that strongly supported the petitioners, strengthening consumer protection in the real estate industry. The ruling by the National Consumer Disputes Redressal Commission (NCDRC) permitting the respondent to impose interest at a rate of nine percent annually on the remaining amount was overturned by the court because it was deemed unfair considering the respondent’s role in causing the delay in possession. The Court’s determination to require the respondents to furnish a precise breakdown of the outstanding amount and to accelerate the transfer of possession within a designated timeframe highlights the judiciary’s dedication to guaranteeing impartiality and responsibility.
In addition to giving the appellants relief, this ruling established a precedent stating that developers must follow possession schedules and cannot unfairly place a financial burden on consumers. To sum up, this case’s decision by the Supreme Court emphasises how critical it is to safeguard consumer rights and guarantee fair treatment in real estate transactions. It promotes a more equitable and balanced market environment for purchasers by serving as a reminder to developers of their responsibilities and the legal ramifications of delays.
REFERENCES
- SCC Online
- https://www.casemine.com/judgement/in/66183a546143ff3cd66b9451?utm_source=amp&target=amp_summary
- https://www.the-laws.com/encyclopedia/browse/case?caseId=004202982000&title=sanjay-chaudhary-vs-pioneer-urban-land-and-infrastructure-ltd
- https://www.indianemployees.com/judgments/details/sanjay-chaudhary-versus-pioneer-urban-land-infrastructure-ltd
- https://www.advocatekhoj.com/library/judgments/announcement.php?WID=17478
This Article is written by VEDIKA TIWARI student of Allahabad University, Prayagraj ; Intern at Legal Vidhiya.
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