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NCDRC directs builder to pay Rs 47.65 lakh compensation to Mumbai homebuyer 25 years after he booked flat for Rs 8.2 lakh

Singhal and the builder sealed the deal for the flat in Sahyadri in 1995. When the builder failed to hand over the flat as promised, Singhal approached the Maharashtra State consumer Disputes Redressal Commission, and, later, the NCDRC. The national commission finally ordered a compensation almost six times the cost of the flat.

The National Consumer Disputes Redressal Commission (NCDRC) directed Sudradh Constructions Pvt Ltd on Friday to pay homebuyer R K Singhal Rs 8.20 lakh, in addition to the Rs 39.45 lakh awarded by the Maharashtra State Consumer Disputes Redressal Commission in 2015, for a flat he had booked in 1993.

Both Sudradh Constructions and Singhal are Mumbai-based.

Singhal had booked a flat in a building called ‘Sahyadri’ in Mumbai on June 30, 1993, for Rs 6.75 lakh. Thereafter, the builder issued a fresh letter of intent on December 20, 1994, allotting flat no 301, measuring about 1,000 sq ft in the same building, for Rs.8.3 lakh and took back all previous documents.

For the same deal, the sale agreement was dated December 20, 1995, and was executed. The Deed of Confirmation was executed on February 11, 1997. Singhal paid Rs.8.2 lakh as the total sale consideration.

As per clause 18 of the December 20 agreement, the builder promised to hand over the flat on June 8, 1998, but failed to do so. Singhal sent a legal notice to the builder, demanding a compensation of Rs 18.27 lakh, on December 18, 1999.


The builder replied on March 7, 2000, raising a ‘false defence’ and promised that flat would be handed over in a couple of months. Aggrieved by the act of the developer, Singhal complained to the Maharashtra State Consumer Disputes Redressal Commission.

The state commission, in its order dated August 5, 2015, directed the builder to refund Rs 39.45 lakh to Singhal within 45 days. But it did not accept Singhal’s plea to take possession of the flat, which was finally constructed in 2014.

Case reaches NCDRC

Singhal moved the NCDRC against Sudradh Constructions after he was aggrieved with the state commission’s order, in 2015 itself. The NCDRC agreed with the state commission that he was not entitled to the flat as he had made that demand only several years after he filed the first complaint.

“…it is seen that an amount of Rs 39,45,000/- has been ordered to be refunded to the complainant in lieu of Rs 8,20,000/- paid by the complainant to the opposite party,” the national commission said.

It observed that the Supreme Court, in the DLF Homes Panchkula Pvt. Ltd. Vs. D S Dhanda, ETC; Sudesh Goyal, ETC, 2019 Law Suit (SC) 1207, had observed that for refund cases, with an interest of 9 percent per annum is reasonable and sufficient.

“In the present case, the interest rate comes to more than 11 percent per annum. It is further seen from the break-up of the amount of Rs 39,45,000/- that it is only the amounts under different heads. However, the principal amount of Rs 8,20,000/- is not included. The complainant is entitled to the refund of this amount. Thus, we deem it appropriate to allow an additional amount of Rs 8,20,000/- to be paid to the appellant complainant by the opposite party. Consequently, the appellant would be entitled to get Rs 47,65,000,” the commission said in its order.

It directed the builder to pay the amount to the buyer within 45 days, failing which this amount will attract an interest at the rate 6 percent per annum from the date of this order till actual payment.

The NCDRC agreed with the state commission’s ruling that he was not entitled to the flat as he had made that demand several years after he first filed the complaint in 2001.

“Courts are not only about punishing the builder’s wrongdoings but also about giving consumers their due,” said advocate Aditya Parolia of PSP Legal.
Vandana Ramnani
first published: Aug 31, 2020 12:58 pm
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