Legal Analysis on Equities in Consumer Rights Case

Explore the detailed legal analysis provided by the court in a recent consumer rights case, shedding light on the obligations of builders and the equities involved in such disputes. Discover the implications of subsequent purchasers stepping into the shoes of original allottees and the entitlements they may or may not have under consumer protection laws. Stay informed on the complexities of consumer rights and the legal precedents set by the NCDRC.


  • The purchaser visited the construction site but was denied entry by builder’s employees.
  • The purchaser made inquiries regarding possession but did not receive any result.
  • Builder alleged non-payment of 11th and 12th instalments and reserved the right to cancel the allotment.
  • Construction was delayed due to NGT order regarding Okhla Bird Sanctuary.
  • Builder claimed entitlement for extension of time due to force majeure conditions.
  • NCDRC rejected plea of original allottee being a defaulter and allowed the complaint for refund.

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  • The petitioner argued that the purchaser, who stepped into the shoes of the original allottee, cannot claim the same equities as the original allottee.
  • The petitioner emphasized that the flat purchaser cannot be made to wait indefinitely for possession, as per a judgment of the Hon’ble Supreme Court.
  • In similar cases, the court ruled that a third party allottee cannot claim equities to the same extent as the original allottee, especially in terms of claiming interest.
  • The petitioner highlighted that the project had faced delays due to an interim order by the NGT, known to both the original allottee and subsequent purchaser.
  • It was argued that the relief granted by NCDRC, including interest, was unwarranted as the purchaser, not being the original allottee, could not claim interest.
  • The petitioner contended that the complainant, as a subsequent purchaser, could not claim the same equities as the original allottee.
  • The National Consumer Disputes Redressal Commission did not grant relief to subsequent purchasers despite stepping into the shoes of the original allottees, referring to the case of Raje Ram.
  • The NCDRC directed payment of interest against the builder for the entire period despite the builder citing reasons such as the NGT’s interim orders causing construction delays.
  • The original allottee informed the builder that the subsequent purchaser would continue the obligations and was entitled to possession.
  • The builder acknowledged the rights and entitlements of the subsequent purchaser and signified its obligations as the consumer after slowdown in construction due to NGT orders.
  • There were payments made towards instalments, penalties, and an agreement to sell between the original allottee and subsequent purchaser, totaling a significant amount.

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  • The builder demanded further instalments after receiving notice, leading to arbitrary conclusions due to the large number of flat buyers waiting for their promised residences.
  • The three appellants who transferred their title to third parties would not benefit from the order as they sold their interest in the apartments.
  • Subsequent purchasers stepping into the shoes of original allottees through assignment of rights and liabilities may be entitled to similar treatment as the original allottees.
  • Refunds with interest at 9% per annum may be directed to subsequent purchasers from the date the builder acquired knowledge of the transfer.
  • The nature and extent of relief for subsequent purchasers are fact dependent and may not be the same as original allottees.
  • Prolongation of projects poses economic repercussions on original allottees who are paying instalments and rents while awaiting possession.
  • Re-allottees who were aware of delays upon reallotment cannot be compared to original allottees who faced significant delays and mental agony.
  • Subsequent transferees may not step into the shoes of the original buyer for benefiting from the order.
  • The NGT directed the builder to halt construction in 2016 based on an application from an adjoining area occupant.
  • The Consumer Protection Act aims at providing better protection for consumers and establishing dispute resolution authorities.
  • Wrongdoers cannot avoid facing issues in front of the Consumer Forum.
  • The Act promotes and protects consumer rights, including protection against hazardous goods, fair trade practices, and access to competitive prices.
  • The Act enables consumers to participate in the market economy directly.
  • Subsequent purchasers of properties can expect a reasonable time for performance even if there was a delay in possession.
  • Consumers are beneficiaries of insurance policies and can seek relief under the Act.
  • Delay in possession may not always lead to interest on refunds, but compensation for mental agony may be awarded in specific cases.
  • Proceedings under the Act are saved by provisions of the Real Estate Regulatory Authority Act, 2019.
  • Complaints under the Act can be maintained even if there is no privity of contract between all parties involved.
  • The definition of ‘consumer’ under the Act is broad and includes beneficiaries of services.
  • Technicalities are often disregarded in favor of quick redressal for consumers in complaints.
  • Insurers can maintain a complaint against a carrier/service provider even after indemnifying the insured for an incident.
  • The Act aims to protect the economic interests of consumers, whether as purchasers of goods or users of services.
  • The per se bar on relief of interest on refund may not always be considered applicable.
  • Material on record suggests occupancy certificate was not available at the time of the appeal.
  • Purchaser informed the company about stepping into the shoes of the original allottee in April 2016.
  • Interest should be granted from the date of the purchaser informing the company for the interests of justice.

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  • Order of the NCDRC modified as mentioned
  • Appeal partly allowed
  • Directions of the NCDRC modified accordingly
  • No order on costs


Case Number: C.A. No.-007042 / 2019

Click here to read/download original judgement

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