Supreme Court Orders Compensation for Delayed Possession of Apartment in Gurgaon
The case of Utpal Trehan vs. DLF Home Developers Ltd. is a crucial judgment concerning delayed possession and compensation under an Apartment Buyers’ Agreement. The Supreme Court, in its ruling, addressed the issues of maintenance charges, delayed compensation, and the responsibility of the builder to offer possession as per the terms of the agreement. The petition arose from a grievance regarding the delay in the possession of an apartment in New Town Heights, Gurgaon, Haryana, booked by the petitioner in 2008.
Background of the Case
The appellant, Utpal Trehan, entered into an agreement with DLF Home Developers Ltd. (the respondent) on 3rd December 2008 for the purchase of an apartment in New Town Heights, Sector 91, Gurgaon. According to the agreement, the possession of the flat, which had a super area of 1760 square feet, was to be delivered within 36 months from the date of the agreement, with certain exceptions outlined in the contract. However, due to various delays, including regulatory clearances, the possession was not provided within the stipulated time frame.
As per the agreement, the payment was made in installments, with the final payment expected to be completed by 29th June 2010. However, due to the delay in construction, the builder amended the agreement through a letter dated 26th March 2009, changing the payment schedule and offering certain benefits to the allottee, including an advance payment rebate and a discount on the basic sale price.
The appellant filed a complaint before the National Consumer Disputes Redressal Commission (NCDRC) regarding the delayed possession and additional maintenance charges. The NCDRC ruled in favor of the appellant, directing the builder to issue a fresh offer of possession and pay compensation for the delay. However, the issue of maintenance charges remained contentious, leading to appeals before the Supreme Court.
Legal Issues in the Case
- Was the builder liable for delayed possession and should the builder pay compensation for the delay?
- Is the payment of maintenance charges justified, given the delay in possession?
- What is the proper calculation method for delayed possession compensation?
- Can the builder demand maintenance charges before possession is provided?
Arguments by the Petitioner (Utpal Trehan)
- The petitioner argued that the builder had failed to deliver possession of the apartment within the stipulated 36 months, as outlined in the agreement, causing significant distress and financial losses.
- The petitioner claimed compensation for the delay in possession, citing the clause in the agreement that promised compensation at the rate of Rs. 10 per square foot per month for delayed possession.
- The petitioner also argued that the builder’s demand for maintenance charges was unjustified, as the flat had not been delivered for possession, and the maintenance charges should not be paid until the possession was granted.
- The petitioner sought compensation for the mental trauma and inconvenience caused by the delay, as well as the reimbursement of expenses incurred in the process.
Arguments by the Respondent (DLF Home Developers Ltd.)
- The respondent argued that the delay in possession was due to external factors such as environmental clearance delays, and that the builder had provided the allottee with benefits like rebates, discounts, and increased area to compensate for the delay.
- The builder also contended that the maintenance charges were in accordance with the terms of the agreement and were required for the upkeep of the apartment complex.
- The respondent further stated that the builder had made an offer of possession in June 2013, which was contingent upon payment of outstanding dues, and that the delay in payment by the appellant had further complicated the process.
- The respondent claimed that the petitioner was not entitled to the benefits of delayed compensation because of the delayed payment of the last installment, which was paid late by nine days.
Supreme Court’s Observations
- The Court noted that while the delay in possession was partly due to external regulatory delays, the builder had a responsibility to inform the allottee and make appropriate compensations for the delay as per the agreement.
- The Court emphasized the importance of adhering to contractual obligations and the need to compensate the allottee for the delayed possession, as specified in the agreement.
- Regarding the maintenance charges, the Court agreed with the petitioner’s contention that charging maintenance fees before possession was unreasonable and violated the terms of the agreement.
- The Court also found that the builder’s letter dated 10th June 2013, offering possession, was conditional and did not constitute a valid offer for possession, as it was tied to the clearance of outstanding dues and certain other payments.
The Court ruled:
“The builder is directed to issue a fresh offer of possession of the apartment to the complainant and hand over possession within six weeks from the date of this order. The builder shall pay compensation for the delayed possession at the rate of Rs. 10 per square foot per month from March 2011 until the date of fresh offer of possession.”
Final Judgment
The Supreme Court issued the following directives:
- The builder was directed to issue a fresh offer of possession to the petitioner within six weeks from the date of the judgment.
- The builder was ordered to pay compensation for delayed possession at the rate of Rs. 10 per square foot per month from March 2011 until the date of the fresh offer of possession.
- The maintenance charges demand was found to be unwarranted, and the builder was directed to refrain from claiming any such charges until the possession was granted to the allottee.
- The builder was also directed to pay the petitioner Rs. 50,000 towards litigation costs and expenses.
Implications of the Judgment
- The ruling reinforces the importance of adhering to contractual timelines and compensating buyers for delays in possession, especially when the buyer has fulfilled their payment obligations.
- The judgment highlights the unjustified nature of maintenance charges in situations where possession has not been granted and the property is not in use by the buyer.
- The decision also provides clarity on the calculation of delayed compensation and ensures that buyers are fairly compensated for delays caused by the builder’s inability to deliver possession within the promised timeframe.
- This case may serve as a precedent for other similar cases involving delayed possession and maintenance charges in residential real estate disputes.
This judgment emphasizes the rights of the buyer in ensuring that builders are held accountable for delays and the payment of compensation, which is critical in property law and consumer protection.
Petitioner Name: Utpal Trehan.Respondent Name: DLF Home Developers Ltd..Judgment By: Justice Dinesh Maheshwari, Justice Aniruddha Bose.Place Of Incident: Gurgaon, Haryana.Judgment Date: 10-07-2022.
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