In a landmark ruling, the Supreme Court of India has ordered the Agra Development Authority (ADA) to pay ₹15 lakhs in compensation to a flat buyer, Dharmendra Sharma, due to deficiencies in service related to the possession of an apartment. The court found that the ADA had offered possession without the necessary completion and firefighting clearance certificates, rendering the offer invalid.
Case Background
Dharmendra Sharma applied for an apartment in July 2011 and paid an initial booking amount of ₹4,60,000. After being allotted a flat through a lottery system, he opted for full payment of ₹56,54,000. However, possession was delayed beyond the promised timeframe, leading to disputes over additional payments and construction deficiencies.
Supreme Court Findings
- Deficiency in Service: The court emphasized that the absence of essential documents like completion and firefighting clearance certificates significantly undermined the validity of the possession offer made by the ADA. The ruling underscored that these documents are critical for lawful possession.
- Compensation Awarded: The court directed the ADA to compensate Sharma with ₹15 lakhs in addition to refunding his deposited amount along with 9% interest per annum from the date of his complaint rather than from the date of deposit. This decision reflects the court’s recognition of the developer’s breach of statutory obligations.
- Refund Details: The ADA is required to refund not only the deposited amount but also the non-judicial stamp duty paid by Sharma, totaling ₹3,99,100. The entire payment must be made within three months.
Legal Arguments and Court’s Rationale
The ADA contested the NCDRC’s earlier ruling on two grounds: first, that Sharma’s complaint was barred by limitation since he filed it six years after the initial offer of possession; and second, that the NCDRC lacked jurisdiction as the claim was below ₹1 crore.However, the Supreme Court rejected these arguments, stating that repeated reminders from ADA indicated ongoing negotiations and that Sharma’s claims included compensation for mental agony and other losses, bringing his total claim above ₹1 crore.
Conclusion
This ruling highlights significant consumer rights issues within India’s real estate sector. It reinforces that developers must adhere strictly to regulatory requirements before offering possession and underscores consumers’ right to seek redress for deficiencies in service. As both parties navigate their next steps following this judgment, it serves as a crucial precedent for future real estate disputes in India.
Case: Dharmendra Sharma versus Agra Development Authority, Civil Appeal Nos. 2809-2810 of 2024