‘Paper possession’ not defence: National consumer body orders Rs 63 lakh refund to Greater Noida homebuyer after 14 years

AVM J Rajendra (Retd) and Justice Anoop Kumar Mendiratta was hearing a complaint filed by a couple.

‘Paper possession’

• Considering the facts and circumstances of the case and shortcomings in the flat remaining unattended, and in the absence of a sale deed being materialised, the possession taken by complainants under protest remains a “paper possession”, the NCDRC noted.
• It is emphasised by the complainants that the order for handing over possession has not been complied with in letter and spirit by the removal of deficiencies.
• There appears to be a lapse by the opposite party in discharging the obligations to attend to deficiencies in flat despite the order of this Commission dated May 7, 2019.
• The burden lies on the opposite party (developers) to prove that the dominant purpose behind purchasing the flat by the complainants was commercial, to reasonably infer that the complainants do not fall within the ambit of ‘consumer’ under the Consumer Protection Act, 1986.
• There is absolutely no evidence to infer that the flat was purchased by the complainants for commercial purposes.
• A bald objection raised by the opposite party in the absence of any evidence on record is devoid of merits.

Crucial issue: Conditional occupancy certificate

• One of the most important aspects of the case was the nature of the occupancy certificate.
• The Commission noted that the occupancy certificate obtained by the developer was conditional.
• It was subject to the final decision of the National Green Tribunal (NGT) in a case relating to the Okhla Bird Sanctuary area.
• This meant that the legal status of the project was still uncertain.
• In view of the conditional occupation certificate, the purchaser could not have been compelled to take possession as the same was never in contemplation at the time of booking and appears to be a subsequent development.
• In the absence of furnishing unconditional occupancy certificate, the offer of possession is vitiated.

Refund with interest ordered

• The NCDRC directed the developers to refund Rs 63,56,398 to the complainants, along with interest at 8 per cent per annum from the respective dates of deposit, within six weeks.
• If the amount is not refunded within six weeks, the interest rate will increase to 12 per cent per annum for the period of delay beyond that period.
• The complaint was disposed of without any order as to costs.

Booking, payments

• The complainants, Prabha Singhal and Ashwani Kumar Singhal, had booked a 1,567 sq ft flat on the 15th floor of Tower 25 in the Paras Tierea project.
• The total sale consideration was Rs 60.60 lakh, and an agreement was executed on April 25, 2012.
• Over the years, the couple paid Rs 57.19 lakh – more than 94 per cent of the total cost – along with service tax and other charges, taking the total payment to Rs 59.06 lakh.
• In May 2016, the developer issued a letter offering possession, followed by a reminder in August 2016 demanding the balance amount along with 18 per cent interest for delayed payment.
• However, the homebuyers alleged that they repeatedly requested copies of the completion certificate (CC) and occupancy certificate (OC), which are essential documents to confirm that a building is legally fit for occupation.
• According to them, these documents were not properly furnished before demanding final payment.

Cancellation of allotment

• When the buyers did not clear the remaining dues, the developer cancelled the allotment on March 4, 2017.
• The couple then approached the NCDRC in 2018, seeking either possession with interest for delay or, alternatively, a full refund with 18 per cent interest and compensation for mental harassment.

Disputed possession in 2019

• During the pendency of the case, the commission had earlier, on May 7, 2019, directed the buyers to pay Rs 4.5 lakh and the developer to hand over possession within a week.
• The buyers transferred the amount.
• The developer claimed that physical possession was handed over on August 12, 2019.
• However, the buyers stated that the flat still had finishing defects.
• The occupancy certificate was conditional.
• The sale deed was never executed.s
• The keys were handed over “under protest.”
• They described it as symbolic possession rather than genuine delivery of a legally complete and habitable home.

Builder’s objections rejected

• The developers raised two main objections – the Commission did not have pecuniary jurisdiction because the flat’s cost was below Rs 1 crore and that the buyers were residents of Qatar and had allegedly purchased the flat for investment, meaning they were not “consumers” under the law.
• The commission rejected both arguments.
• It clarified that jurisdiction under the Consumer Protection Act is determined not only by the flat price but by the total value of relief claimed, including interest and compensation.
• On the “commercial purpose” argument, the bench observed that there was no evidence to show the flat had been bought for business or investment.
• A mere allegation was not enough to deny consumer protection.