Consumer courts can direct refund with interest for delay in apartment delivery: SC

New Delhi: The Supreme Court on Thursday held that consumer courts can grant relief to flat purchasers, who are aggrieved with delay in handing over of the flat as per the apartment buyers agreement.

A bench, headed by Justice U.U. Lalit and comprising Justice S. Ravindra Bhat and P.S. Narasimha, said: “We have referred to the legal regime under the Consumer Protection Act, only to show that the (National Consumer Disputes Redressal) Commission has the power and jurisdiction to direct return of money under Section 14 of the Consumer Protection Act, if a consumer so chooses. The freedom to choose the necessary relief is of the consumer and it is the duty of the courts to honour it.”

Justice Narasimha, who authored the judgment on behalf of the bench, said that a consumer invoking the jurisdiction of the Commission can seek such reliefs as he/she considers appropriate.

“A consumer can pray for a refund of the money with interest and compensation. The consumer could also ask for possession of the apartment with compensation. The consumer can also make a prayer for both in the alternative,” he said.

The bench noted that the power to direct refund of the amount and to compensate a consumer for the deficiency in not delivering the apartment as per the terms of agreement is within the jurisdiction of the consumer courts.

“If a consumer prays for refund of the amount, without an alternative prayer, the Commission will recognise such a right and grant it, of course subject to the merits of the case. If a consumer seeks alternative reliefs, the Commission will consider the matter in the facts and circumstances of the case and will pass appropriate orders as justice demands,” said the bench.

The top court made these observations while hear an appeal by Experion Developers Private Limited, which was directed by the Commission to refund an amount of Rs 2,06,41,379 with interest at 9 percent per annum to the consumer for its failure to deliver possession of the apartment within the time stipulated as per the apartment buyers agreement.

Dismissing the appeal filed by the developer, the bench noted that the consumer, in the present case, prayed for the solitary relief for return of the amount paid towards purchase of the apartment without a prayer for alternate relief.

“We are of the opinion that the Commission has correctly exercised its power and jurisdiction in passing the above directions for refund of the amount with interest,” said Justice Narasimha.

The appeal filed by the consumer said that the payment of interest must be from the date of payment of each instalment and the rate of interest must be 24 per cent per annum. “We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of last deposit. We find that this does not amount to restitution,” noted the bench.

The bench said the interest on the refund shall be payable from the dates of deposit. “Therefore, the appeal filed by the purchaser deserves to be partly allowed. The interests shall be payable from the dates of such depositsa. At the same time, we are of the opinion that the interest of 9 per cent granted by the Commission is fair and just,” it noted.