In a significant legal development, the Supreme Court of India delivered a landmark judgement regarding the requirement of completion certificates in real estate disputes. This ruling has far-reaching implications for future cases involving similar issues. The judgement, which involved a dispute between the appellant and ADA, sheds light on the importance of compliance with statutory obligations in the real estate sector.
Facts
- The appellant filed a complaint before the NCDRC alleging deficiency in service and unfair trade practice by ADA.
- The NCDRC partially allowed the complaint directing refund of the amount deposited by the Appellant along with interest.
- ADA claimed there was an outstanding amount even after adjustment despite the Appellant’s payments.
- Appellant requested possession multiple times but was not provided due to construction not being completed.
- ADA demanded additional payments for solar system, premium lease, and parking which the Appellant delayed in paying.
- ADA mentioned that out of 582 apartments, except for 20 allottees, all others had taken possession.
- The allotment for the apartment was done by lottery system in 2011 with a tentative price of Rs.56,54,000.
- The Appellant opted for full payment and submitted cheques towards the same.
- Appellant visited the site and ADA office multiple times requesting completion certificate and possession.
- Technical objections raised by ADA were rejected by NCDRC regarding limitation and pecuniary jurisdiction.
- The NCDRC held that subsequent demands and reminders were sent by the ADA, making the plea of limitation invalid.
- The ADA accepted a cheque in 2019, further weakening the limitation argument.
- The appellant made bald allegations without seeking a report from the Commissioner, keeping the apartment locked for six years.
- The NCDRC partially allowed the complaint on 15.09.2023.
- A Review Application by the appellant was dismissed on 30 October 2023, reiterating the limitation aspect.
- The appellant sought interest from the date of deposit, not from the date of the complaint.
- Pecuniary jurisdiction objection over Rs.2 crores was deemed unsustainable by the NCDRC.
- The appellant delayed additional payment requests, leading to interest calculations from the complaint date.
- The ADA’s additional demand was found to be legal and within the 10% admissible clause.
- Clause 27 of Registration and Allotment Rules was deemed inapplicable for refund due to delayed possession.
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Arguments
- Senior Counsel for the appellant argued that the offer for possession would be invalid without the completion certificate and firefighting clearance certificate obtained by the developer ADA.
- The appellant cited judgments like Debashis Sinha & Ors. vs. R.N.R. Enterprise, Pioneer Urban Land and Infrastructure Limited vs Union of India & Ors., Treaty Construction vs. Ruby Tower Cooperative Housing Society Ltd. to support their argument.
- Before the NCDRC, the ADA failed to produce the completion certificate and firefighting clearance certificate, which was not disputed.
- It was argued that the complaint should have been filed before the State Consumer Disputes Redressal Commission due to the value being less than Rs.1 crore.
- Under RERA Act, 2016 and UP (Promotion of Apartment and Ownership and Maintenance) Act, 2010, the offer of possession would only be valid after obtaining the completion certificate, which the ADA had not done.
- The main issue was whether the possession offered without the completion certificate on 04.12.2014 was valid and if the firefighting clearance certificate was available with the ADA.
- The appellant had repeatedly requested the completion certificate and firefighting clearance certificate from the ADA.
- The ADA argued that the petition was time-barred as it was filed after six years from the date of possession offer and the deposited amount was less than Rs.1 crore.
- Appellant appeals for interest to be awarded from date of deposit in C.A. No.2809-2810/2024.
- Appellant argues for modification of impugned judgment and order of NCDRC.
- Appellant requests dismissal of respondent’s appeal.
- Appellant cites various judgments in support of their submissions.
- Appellant claims the demand of Rs.3,43,178/- with alleged offer of possession on 14.02.2014 was unjustified and illegal.
- Appellant argues they should be entitled to interest from date of deposit rather than from date of filing complaint.
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Analysis
- The appellant delayed making the balance payment of Rs. 3,43,178/- for over five years from 2014 to 2019.
- The delay was due to the appellant’s requests for a waiver of interest, contributing significantly to the delay in finalizing the transaction.
- The absence of completion certificates was found to constitute a deficiency in service, supported by relevant precedents.
- Ongoing interactions and reminders extended the limitation period, strengthening the appellant’s claim for compensation.
- The NCDRC correctly applied Sections 18 and 19 of the Limitation Act, extending the limitation period where part payments or acknowledgments are made.
- The complaint in July 2020 was within the limitation period.
- The total claim for compensation, mental agony, harassment, and loss of income exceeded Rs. 1 crore, justifying the filing with NCDRC.
- The offer of possession made in 2014 did not trigger the limitation period due to the absence of required certificates.
- Both parties contributed to delays at various stages, and the NCDRC had the requisite pecuniary jurisdiction to entertain the complaint.
- The appellant’s key contention regarding the absence of completion and firefighting clearance certificates deserves serious consideration.
- In the case of Debashis Sinha v. R.N.R. Enterprise, the Court criticized the perfunctory approach of NCDRC in dealing with the appellant’s contention.
- The appellant argued that it was the duty of the respondents to apply for and obtain the completion certificate from KMC.
- Reference was made to Sub-section (1) of Section 403 of the KMC Act, which requires every person giving notice for building construction to send a completion notice and certificate to the Municipal Commissioner.
- Section 393 mandates individuals intending to erect a building to apply for sanction by giving notice in writing to the Municipal Commissioner with the required documents and plans.
- The ADA did not fulfil its statutory obligations by providing the completion certificate and firefighting clearance certificate, essential for a valid offer of possession.
- The appellant failed to remit the additional amount demanded by the ADA after paying the tentative price, leading to a significant delay in payment without the interest component.
- Both parties exhibited lapses in their respective obligations.
- A compensation of Rs. 15,00,000/- is deemed appropriate in addition to the refund of the entire deposited amount with interest.
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Decision
- Exemplary costs not imposed on either party.
- Full amount to be rendered to the appellant within three months.
- ADA should not be unduly penalized to impede its functioning.
- Civil Appeals 2809-2810 of 2024 disposed of accordingly.
- Civil Appeal No.6344 of 2024 filed by ADA dismissed.
- Order for ADA to return non-judicial stamp worth Rs. 3,99,100/- back to the appellant.
Case Title: DHARMENDRA SHARMA Vs. AGRA DEVELOPMENT AUTHORITY VICE CHAIRMAN (2024 INSC 667)
Case Number: C.A. No.-002809-002810 – 2024
