A Buyer’s Right Cannot Be Denied: NCDRC Orders Big Banyan Roots to Refund with Interest for Delayed Possession

In a significant ruling, the National Consumer Disputes Redressal Commission (NCDRC) has held Big Banyan Roots accountable for failing to deliver a property on time, ordering the builder to refund Rs. 75,58,000 to the buyer, along with 9% interest per annum. The Commission, presided over by Subhash Chandra and AVM J. Rajendra, emphasized that consumers have the right to seek refunds in instances of delays or cancellations of property allotments. This decision reiterates the importance of transparency and accountability in the real estate sector.

Brief Facts of the Case

• The complainant purchased an apartment along with an undivided share in the property from Big Banyan Rootsand entered into a sale and construction agreement. The property’s price was set at Rs. 80 lakhs, with possession promised by a specific date, including a six-month grace period.
• The complainant made payments totaling Rs. 75,58,000 via cheque, which were duly acknowledged by the builder. However, the builder failed to deliver the flat as promised, citing various reasons and continuously deferring the possession date.
• Despite several requests for a refund, the builder provided false assurances and did not return the money. Feeling aggrieved, the complainant filed a consumer case before the State Commission of Karnataka.
• The State Commission partially allowed the complaint, ordering the builder to refund the sum with 18% interest. The builder then appealed this decision to the National Commission.

Builder’s Contentions

• The builder argued that the State Commission’s decision was a violation of principles of natural justice, claiming that the complainant had intentionally used an outdated address even though the builder had updated their address two years prior.
• On the merits of the case, the builder claimed that the contract was terminated at the complainant’s request via email and that the complainant had failed to settle the accounts as suggested.
• The builder further contended that it was willing to refund Rs. 40,79,000 but pointed out that the complainant had already withdrawn Rs. 61,57,876, exceeding the entitled amount.

Observations by the National Commission

• The National Commission observed that the builder had undisputedly delayed handing over possession of the flat as per the agreement and that the allotment had been canceled. As a result, the builder was obligated to refund the payment made by the complainant.
• Citing the decision in Emmar MGF Land Ltd. & Ors. Vs. Amit Puri, the Commission highlighted that after the promised delivery date, a buyer has the right to either accept possession or seek a refund along with reasonable compensation.
• Regarding the interest rate, the Supreme Court in Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroorheld that interest on refunds should be compensatory and calculated from the date of deposit. The Commission found the 9% interest rate fair and appropriate, considering that the interest should be from the dates of depositsrather than just the date of the last deposit.

Final Directions of the Commission

• Modifying the State Commission’s order, the National Commission directed Big Banyan Roots to refund Rs. 75,58,000 to the complainant, along with 9% interest per annum.
• Additionally, the Commission awarded Rs. 30,000 as litigation costs to the complainant, emphasizing the importance of consumer protection in real estate transactions.

M/S Big Banyan Roots Vs. Manu Sharma, F.A. No. 710/2018