In a landmark legal battle, the Delhi High Court has ruled in favor of a homebuyer against NBCC, a government undertaking. The judgement underscores the critical need to uphold the rights of individuals investing in real estate and the responsibility of public authorities to act fairly and in the public interest. The case sheds light on the challenges faced by the petitioner, a retired employee, who invested his life savings in a property and now seeks justice amidst rising property prices and uncertainties. This ruling sets a precedent for ensuring accountability and justice in similar cases involving public authorities and homebuyers.
Facts
- The Petitioner gave consent to vacate the temporary flat provided by NBCC on the condition of rent allowance.
- The Petitioner moved into a rental accommodation in Faridabad and NBCC paid rent allowance for 6 months.
- NBCC offered refund of amount paid by the Petitioner and charges on delayed payments.
- The Petitioner approached RERA in Gurgaon as mentioned by NBCC’s counsel during the proceedings.
Arguments
- The Petitioner has approached forums under the RERA Act and the Consumer Protection Act before filing the instant writ petition.
- The Petitioner impleaded in the NCDRC in a complaint against NBCC & Ors. and later withdrew the complaint from consumer forum and RERA.
- The Petitioner is facing difficulties as his children’s education is suffering and he is unable to afford a new accommodation due to spending his savings in the house.
- The Petitioner, a retired employee, is struggling to find suitable accommodation and facing pressure to vacate premises due to rising property prices.
- The Petitioner argues that he paid the due amount in 2017, but the Respondents have not been prompt in complying with court orders.
- He claims to be desperate for relief and is running from pillar to post for accommodation after investing his life savings in NBCC, believing it to be a government undertaking.
- The Respondent’s counsel alleges forum shopping by the Petitioner and cites Section 79 of the RERA Act to argue against entertaining the writ petition.
- The Respondent relies on Section 79 of the RERA Act, citing a bar on civil courts entertaining suits falling under RERA’s jurisdiction.
- Counsel for the Respondent argues that the Petitioners have also involved themselves in a complaint before Haryana RERA.
- The Respondent asserts that the Petitioner engaging in forum shopping is not a valid defense given the extreme hardships faced by the home buyer who has exhausted his life savings in a property.
- Reference is made to judgments such as Upendra Choudhury v. Bulundshahar Development Authority & Ors. and others to support the contention.
- The Respondent contends that the present writ petition omits to disclose the involvement in the Haryana RERA complaint and the bar under Section 79 of the RERA Act.
Analysis
- Forum shopping condemned but in this case, desperation triggered multiple forum approaches.
- Home purchase a significant lifetime investment; several homebuyers left in uncertainty.
- Offered compensation of principal amount without interest inadequate due to increasing land prices.
- Rent allowance and assistance in hiring flats insufficient compensation to affected homebuyers.
- ‘State’ obligated to act reasonably and fairly towards citizens.
- Emotional toll of uncertainty and instability faced by homebuyers not to be underestimated.
- Petitioner’s behavior driven by frustration, helplessness, and lack of legal understanding.
- No Dues Certificate was provided to the Petitioner.
- Builders’ failure to deliver promises undermines trust and financial security of homebuyers.
- Structural defects in constructions discovered after occupants moved in.
- NBCC, as a state instrumentality, involved in the case.
- Compensation not just about past injustices but also to deter future misconduct.
- Petitioner entered agreement in 2012, invested over Rs. 76 lakhs in five years.
- Home purchase involves savings, planning, and emotional investment.
- Respondent’s treatment of homebuyers deemed exceedingly unfair.
- An action of a State or the instrumentality of the State stands vitiated if it lacks bonafides.
- Power vested by a State in a public authority should be viewed as a trust coupled with duty to be exercised in larger public and social interest.
- Public authorities cannot play fast and loose with the power vested in them.
- A decision taken in an arbitrary manner contradicts the principle of legitimate expectation.
- The authority is expected to exercise powers to effectuate the purpose for which the power stood conferred.
- The State or the instrumentality of the State is accountable to the people and is supposed to act in public good promoting public interest.
- In Noida Entrepreneurs Association v. Noida & Ors., 2011 (6) SCC 508, the Apex Court held that the State or the public authority which holds the property of the public acts as a trustee and therefore has to act fairly and reasonably.
- The Court directs the NBCC to return the entire amount of money paid by the Petitioners within six weeks along with 12% interest from 30.01.2021 till present.
- The NBCC is ordered to pay Rs.5 lakh to the Petitioner for the mental agony and inconvenience caused by the situation.
- Structural defects in the buildings constructed by NBCC have been noted in the material on record.
Decision
- The writ petition is allowed.
- Pending application(s), if any, stand disposed of.
- The contempt petition is dismissed along with pending application(s), if any.
- The Court directed the Respondent to pay a sum of Rs. 30,000/- per month after deducting TDS to the Petitioner.
- On 23.05.2023, the Court had issued a similar direction to the Respondent/NBCC.
- The material on record confirms that the amounts have been paid to the Petitioner.
- The contempt petition was filed by the Petitioner alleging a violation of the Court’s orders.
Case Title: SANJAY RAGHUNATH PIPLANI AND ANR Vs. NATIONAL BUILDINGS CONSTRUCTION CORPORATION DELHI AND ANR (2024:DHC:3738)
Case Number: W.P.(C)-824/2023
