Inordinate Delay In Delivery Of Flat By Emaar India; NCDRC Enhances Compensation Awarded By State Commission

Brief facts:

The Complainants booked a flat with Emaar India Ltd. ('builder') in their residential apartment project 'The Palm Terraces Select' in Gurugram, Haryana. An Apartment Buyer Agreement ('Agreement') was executed between the parties on 21.12.2010. As per the agreement, the builder was to hand over the possession of the apartment / unit within 30 months from the date of commencement of construction with a grace period of 3 months. However, the possession of the apartment was offered to the complainants only on 11.03.2019 and the apartment was handed over to the complainants on 26.04.2019 i.e. after a delay of over five years. The complainants were aggrieved by the non-payment of compensation by the builder for delayed possession despite liability for the same being stated in the agreement. Hence, a complaint was filed before the Delhi State Consumer Disputes Redressal Commission ('State Commission').

The State Commission partly allowed the complaint by directing the builder to pay compensation @8% per annum on total amount deposited by the complainant from the date when possession was to be delivered (01.04.2015) until date of offer of possession (11.03.2019) after deducting an amount of Rs.7,81,794 which has already been paid by the builder. A sum of Rs. 2,00,000 was also awarded as compensation for mental agony and harassment along with Rs. 50,000 as costs. The order of the State Commission was challenged by the complainants before the NCDRC.

Submissions of the complainants:

The counsel for the complainants argued that the compensation awarded by the State Commission is inadequate in view of various Supreme Court decisions and the terms of the agreement which provided for compensation at higher rates. He termed the compensation @8% as grossly insufficient and also sought enhancement of compensation for mental agony to 10 lakhs and award of 2 lakhs as costs.

Submissions of the builder:

The builder argued that the challenges faced by it in progressing with the construction were clearly beyond their anticipation and control. The unforeseen and adverse circumstances were not observed by the State Commission while awarding the compensation. It was their specific contention that the compensation @8% was highly unreasonable and it ought to have been @6% only. It was further argued that the costs for mental agony are not tenable since as per established Supreme Court decisions, multiple compensations for single deficiency are not allowed.

Observations by the Commission:

The bench placed reliance on the decision of the Hon'ble Supreme Court in Experion developers pvt ltd vs Sushma Ashok Shiroor [Civil Appeal No. 6044 of 2019] wherein compensation @9% was considered to be fair and just by the Hon'ble court. Accordingly, the interest was enhanced by the bench from 8% to 9% per annum.

Reliance was also placed on another decision of the Hon'ble Supreme in DLF Homes Panchkula Pvt. Ltd. Vs. D.S. Dhanda [CA Nos. 4910-4941] wherein multiple compensations for a single deficiency were disallowed. It was held that when compensation in the form of interest on the amount paid as consideration to the builder is granted, further compensation towards mental agony cannot be granted.

Hence, the order of the State Commission was modified as under:

1. Builder was directed to pay compensation for delayed possession in the form of simple interest @9% per annum.
2. Compensation for Rs. 2,00,000 awarded towards mental agony and harassment was set aside.
3. The builder was directed to pay Rs. 50,000 as litigation costs to the complainants.

Case Title: Atul Kulshreshtha vs EMAAR India Ltd.

Case Number: First Appeal No.1126 OF 2023

Advocate for Appellants: Ishita Singh

Advocates for EMAAR India: Arjun Jain, Anushree Narain and Vipin Chaudhary

Date of Judgment: 29.04.2025

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