If a house is offered after the "possession letter" is delivered, the buyer is legally required to take possession: NCDRC

If a house is offered after the "possession letter" is delivered, the buyer is legally required to take possession: NCDRC

At the National Consumer Disputes Redressal Commission, which is chaired by Justice Ram Surat Maurya and has Bharatkumar Pandya as a member, it was decided that the house buyer has the right to take possession if it is offered after the acquisition of a "possession certificate" as stipulated in the contract. Is required to do so; if not, he will need to assume ownership. resulting from a contract violation.

Arguments made by the complainant

The complainant paid the booking fee and obtained an assignment letter from the builder after making a reservation for an apartment with Chintels India/Builder. The flat's constructor completed the Apartment Buyer Agreement, which stated that the initial selling price, exclusive of taxes, was Rs. 21,701,050. The Agreement's Annexure-IV refers to a "Construction Link Payment Scheme" as the method of payment. The builder had 36 months from the actual start of construction, plus a grace period of six months, to turn over possession in accordance with Clause-11 of the agreement. In the event of a delay in possession, the allottee may request a return under clause 12 with 90 days' notice. Clause 12 also addresses delay compensation.

 Following the 42-month term, the builder made ownership available to the complaint, conditioned on a final demand of Rs. ₹4,595,188 (exclusive of stamp tax and registration fees). Upon inspecting the project, the complaint found that the assigned apartment was unfinished and unfit for habitation. In addition to interest at the rate of 24% annually from the date of the relevant deposit until the date of the reimbursement, the complaint requests a refund of Rs. 20,013,951. The plaintiff also requests payment for the shortfall in service.

Arguments made by the opposition

The builder said that he had sought for the issuance of a "possession certificate" prior to granting the complaint possession. The complainant filed a complaint seeking a refund rather than making the remaining payment and assuming possession. The builder said that he was able to expand in accordance with the agreement since there was a little delay in finishing the work. In the date of the offer of possession, he refuted any imperfect or livable state of the apartment. According to the builder, the complaint would not be eligible for any interest on the deposit if they used clause 12 of the agreement. The agreement's article 30 regarding arbitration mandates the dismissal of the complaint. The complaint had a mortgage on the apartment and had received a loan from India Infoline Housing Finance Limited based on a tripartite arrangement. Nevertheless, India Infoline Housing Finance Limited was left out of the case as a party. The builder said that the complaint ought to be rejected since it was without validity.

The Commission's remarks

There was no excessive delay in transferring ownership to the complaint, according to the Commission's observations. The complaint did not utilize the right to a refund as specified in clause 12 of the agreement until the date of the offer of possession. The complaint claimed that the construction was not finished on the date of the offer of possession, but no application was submitted to the Local Commission for a judgment on the subject. The Commission cited the ruling in Irio Grace Realtech Pvt. Ltd. v. Abhishek Khanna, whereby the court decreed that the issue of a "possession certificate" constitutes prima facie proof of construction completion. The Commission stressed that the house buyer is legally required to accept possession if possession is provided after obtaining the "possession certificate." 

The complaint would be responsible for breach of contract and lose the earnest money, which is referred to as the "booking amount" in clause 5 of the agreement, as they declined to take possession after the offer. The Commission highlighted that earnest money forfeiture should be appropriate in cases of contract violation, citing the Supreme Court cases of Fateh Chand vs. Balkishan Das, Maula Bux vs. Union of India, as well as Kailash Nath Associate vs. Delhi Development Authority. 

The terms of section 74 of the Contract Act of 1872 apply if it amounts to a penalty, and the party seizing must establish real damages. The apartment would stay with the builder after the termination of the allocation, and the Commission found no evidence of a substantial loss in this case.

The developer lost 10% of the initial selling price, but the Commission ordered the builder to return all of the money the complaint had put, plus interest at the rate of 9% annually from the date of the deposit until the date of the refund.