March 30, 2019:

On Friday, Supreme Court directed Consumer Commission to order builder to refund amount to the buyer after 10 yrs of possession date.

Court said, "A buyer cannot be required to wait indefinitely for possession."

In this case (Kolkata West International City Pvt Ltd vs Devasis Rudra), the buyer paid an amount of ₹39, 29, 280 in 2006 to the builder and the agreement between them envisaged that possession of the Row House would be handed over to the buyer by 31 Dec 2008 with a grace period of a further 6 months.

The buyer, in 2011 approached the Consumer Commission and prayed for possession of the Row House and in the alternative for the refund of the amount paid to the developer together with interest at 12% per annum.

Compensation of ₹20 lakhs was also claimed. The State Commission allowed the complaint by directing the developer to refund the moneys paid together with interest at 12% per annum and compensation of ₹5 lakhs.

The National Commission modified this order by reducing the compensation from ₹5 lakhs to ₹2 lakhs.

The issue before the Apex Court bench comprising of Justice DY Chandrachud and Justice Hemant Gupta in the appeal filed by the developer against order of refund was whether the buyer was entitled to seek a refund or was stopped from doing so, having claimed compensation as the primary relief in the consumer complaint.

While refusing to interfere with the order of refund, the bench said:

""In terms of the agreement, the date for handing over possession was 31 Dec 2008, with a grace period of 6 months. Even in 2011, when the buyer filed a consumer complaint, he was ready and willing to accept possession. It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement."

"Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund."

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