NCDRC overstepped its authority and jurisdiction by disregarding the Agreement’s binding covenants: Supreme court
Case title: Venkataraman Krishnamurthy vs Lodha Crown Buildmart Pvt. Ltd.
Case no.: CIVIL APPEAL NO. 971 OF 2023
Decided on: 22.02.2024
Quorum: Hon’ble Justice Aniruddha Bose, Hon’ble Justice Sanjay Kumar
Hon’ble Justices stated that, “it was not open to the NCDRC to apply its own standards and conclude that, though there was delay in handing over possession of the apartment, such delay was not unreasonable enough to warrant cancellation of the Agreement. It was not for the NCDRC to rewrite the terms and conditions of the contract between the parties and apply its own subjective criteria to determine the course of action to be adopted by either of them.”
BRIEF FACTS:
The complainants, who planned to buy an apartment in a Mumbai building that the respondent company was going to build, were the appellants. The complainants received a flat as a result of the parties’ execution of an Agreement to Sell. The sale consideration was to be paid in four instalments of “application money” in accordance with the payment schedule, with the remaining sum due when fit outs started. According to the agreement, the complainants were to receive possession of the flat by June 30, 2016, or within a grace period of one year, so they could fit it out.
The complainants went to the NCDRC, claiming that the company had terminated the agreement and failed to deliver possession of the flat for fit outs by the specified date. In addition to reimbursement for the money they had paid, they prayed for damages for the harassment, mental anguish, and torture they had endured, as well as reimbursement for the costs of the lawsuit. The complainants were before the supreme Court because they were unhappy NCDRC order.
COURT ANALYSIS AND JUDGEMENT:
The court ruled that the contract condition required payment of delay compensation, and that if the delay lasted more than twelve months after the end of the grace period, the allottee could terminate the contract and receive a refund of his payment. The contract condition, however, stated that the refund would be made without any interest.
The Court went on to say that the appellants’ desire to avoid the additional tax liability resulting from the implementation of the Goods and Service Tax regime could not be used against them or attributed to them as an underhanded reason for withdrawing from the agreement.
After analysing the evidence and the parties’ agreement, the court concluded that the NCDRC exceeded its authority and jurisdiction by ignoring the binding covenants in the Agreement and introducing its own logic and rationale to determine what the parties’ future course of action, particularly the appellants, should be.
The court orders the respondent-company to refund the deposited amount of Rs. 2,25,31,148 in twelve equal monthly instalments via post-dated cheques, with simple interest at 12% per annum, from the date of receipt of the amount or parts thereof until actual repayment.
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Written by – Surya Venkata Sujith