Paragraph numbers below are the court’s original numbering, recovered from the source text.
10. The appellant preferred a Review Application which was dismissed by the NCDRC by its order dated 30th October, 2023. In the Review Application also, the NCDRC reiterated that the review was liable to be rejected as while offering possession, the ADA vide letter dated 04.12.2014 had made a further demand which amount was not deposited within the time and it was only deposited in 2019 and that too without interest and the complaint was made after six years and, therefore, the appellant would not be entitled to interest from the date of deposit.
11. In the two appeals filed by the appellant, the relief claimed is to the extent that the payment of interest be awarded from the date of deposit while refunding the same and not from the date of the complaint. Whereas in the appeal filed by the ADA, it is submitted that in view of the fact that the petition had been filed after six years from the date of offering possession, as such it was barred by limitation and also as the amount deposited was only Rs. 59,91,000/- i.e. less 104 than Rs. 1 crore, the complaint ought to have been filed before the State Consumer Disputes Redressal Commission and the NCDRC would have no pecuniary jurisdiction to entertain the complaint with a value of less than Rs. 1 crore.
12. We have heard Shri Vipin Sanghi, learned senior counsel appearing for the appellant and Shri Sudhir Kulshreshtha, learned counsel for the ADA in all the three appeals.
13. The facts as recorded above are not disputed. Even the NCDRC did not find any contradiction in the factual aspect. The only issue is as to whether the possession as offered on 04.12.2014 should be taken as a valid offer of possession even if there was no completion certificate and also whether the firefighting clearance certificate was available with the ADA or not. Despite specific requests and demands by the appellant for providing the completion certificate and firefighting clearance, the ADA failed to produce the same. Senior Counsel for the appellant has relied upon the following judgments in support of his submission that offer for possession would be invalid where the completion certificate and firefighting clearance certificate have not been obtained by the developer i.e. ADA: (a) Debashis Sinha & Ors. vs. R.N.R. Enterprise5 (b) Pioneer Urban Land and Infrastructure Limited vs. Union of India & Ors.6 (c) Treaty Construction vs. Ruby Tower Cooperative Housing Society Ltd.7 It is then submitted that even before the NCDRC the completion certificate and the firefighting clearance certificate could not be produced by the respondent -ADA.
14. It is also submitted on behalf of the appellant that under the provisions of RERA Act, 2016 as also the UP (Promotion of Apartment and Ownership and Maintenance) Act, 2010 offer of possession would be valid only after a developer obtains the completion certificate, which had not been done so far by the developer ADA in the present case. On behalf of the appellant, it is also argued that the demand (2023) 3 SCC 195 [2019] 10 SCR 381 : (2019) 8 SCC 416 [2019] 9 SCR 606 : (2019) 8 SCC 157 [2024] 9 S.C.R. Dharmendra Sharma v. Agra Development Authority of Rs. 3,43,178/- along with alleged offer of possession dated 14.02.2014 was totally unjustified and illegal. It was also submitted that the appellant having deposited the amount of approximately Rs. 60 lakhs and that too after taking loan from financial institutions, cannot be deprived of counting the interest from the date of deposit rather than from the date of filing of the complaint. In support of this submission, reliance has been placed upon the following judgments: (a) Ghaziabad Development Authority vs. Balbir Singh8 (b) Rishab Singh Chandel & Anr. vs. Parsvnath Developers Ltd. & Anr.9 (c) Lucknow Development Authority vs. M.K.Gupta10 (d) Marvel Omega Builders Pvt. Ltd. vs. Shri Hari Gokhale & Ors.11 (e) Experion Developers Pvt. Ltd. vs. Sushma Ashok Shierror12
15. On such submissions it was prayed by the appellant that his appeals be allowed and the interest be awarded from the date of deposit and to that extent the impugned judgment and order of NCDRC be modified. Further that the appeal filed by the respondent be dismissed.
16. Having considered the submissions of both parties, we are of the opinion that both have contributed to delays at various stages. The respondent ADA raised an objection that the complaint was barred by limitation, claiming that the complaint was filed on 10.07.2020, well beyond the statutory limitation period prescribed under Section 24A of the Consumer Protection Act, 1986, which mandates that a complaint must be filed within two years from the date on which the cause of action arises. ADA argued that the offer of possession made on 04.02.2014 should have triggered the limitation period. However, the NCDRC, in its impugned order, rightly rejected this argument by considering that the respondent ADA issued reminders to the appellant on 22.09.2014, 21.11.2014, and 17.01.2018. Additionally, ADA accepted the appellant’s payment of Rs. 3,43,178/- on 20.06.2019 [2004] 3 SCR 68 : (2004) 5 SCC 65 Civil Appeal No.3053 of 2023 [1993] Suppl. 3 SCR 615 : (1994) 1 SCC 243 [2019] 10 SCR 375 : (2020) 16 SCC 226 (2022) 6 SCALE 16 106 without any reservations. Given these facts, the NCDRC correctly applied Sections 18 and 19 of the Limitation Act, 1963, which extend the limitation period where part payments or acknowledgments are made. Consequently, the cause of action continued to exist, and the filing of the complaint in July 2020 is within the limitation period.
17. This Court concurs with the NCDRC’s reasoning and affirms that the complaint was not barred by limitation. The ongoing interactions between the parties, including ADA’s acceptance of part payment in 2019 and the reminders sent, effectively extended the limitation period under established legal principles. However, while the complaint is within limitation, we also recognize that the appellant delayed making the balance payment of Rs. 3,43,178/- for over five years, from 2014 to 2019. This delay was largely due to the appellant’s requests for a waiver of interest, which, while understandable, contributed significantly to the delay in finalizing the transaction.
18. In light of these circumstances, while the appellant is entitled to a refund along with interest, it would be inequitable to award interest from the date of the original payment in 2011 given the appellant’s role in the delay.
19. The respondent ADA has also challenged the pecuniary jurisdiction of the NCDRC, contending that the total payment made by the appellant amounted to Rs. 59,97,178/-, which was less than Rs. 1 crore. As such, ADA argued that the complaint should have been filed before the State Consumer Disputes Redressal Commission and not the NCDRC, which has jurisdiction over matters exceeding Rs. 1 crore as per Section 21(a)(i) of the Consumer Protection Act, 1986. This Court finds no merit in ADA’s argument. The NCDRC, in its impugned order, correctly observed that the claim made by the appellant was not limited to the deposit amount alone but also included compensation for mental agony, harassment, and loss of income, which brought the total claim well above Rs. 1 crore. In consumer disputes, the value of the claim is determined not just by the amount deposited but by the aggregate relief sought, which includes compensation and other claims. Therefore, the NCDRC rightly held that it had the requisite pecuniary jurisdiction to entertain the complaint, and this Court affirms that finding.
20. The appellant’s key contention regarding the absence of the completion certificate and firefighting clearance certificate merits [2024] 9 S.C.R. Dharmendra Sharma v. Agra Development Authority serious consideration. The appellant consistently raised this issue, asserting that a valid offer of possession cannot be made without these documents. Section 4(5) of the UP Apartment (Promotion of Construction, Ownership & Maintenance) Act, 2010 and Section 19(10) of the RERA Act, 2016 mandate that a developer must obtain these certificates before offering possession. Despite the appellant’s repeated requests, ADA failed to produce these certificates, rendering its offer of possession incomplete and legally invalid.
21. The appellant has rightly cited relevant precedents to bolster this argument. In Debashis Sinha v. R.N.R. Enterprise (2023),13 this Court held that possession offered without the requisite completion certificate is illegal, and a purchaser cannot be compelled to take possession in such circumstances. The Court in that case held: “20. Finally, we cannot resist but comment on the perfunctory approach of Ncdrc while dealing with the appellants’ contention that it was the duty of the respondents to apply for and obtain the completion certificate from KMC and that the respondents ought to have been directed to act in accordance with law. The observation made by Ncdrc of the respondents having successfully argued that it was not their fault, that no completion certificate of the project could be obtained, is clearly contrary to the statutory provisions. 21. Sub-section (2) of Section 403 of the KMC Act was referred to by Ncdrc in the impugned order [Debashis Sinha v. R.N.R. Enterprise, 2020 SCC OnLine NCDRC 429] . Sub-section (1) thereof, which finds no reference therein, requires every person giving notice under Section 393 or Section 394 or every owner of a building or a work to which the notice relates to send or cause to be delivered or sent to the Municipal Commissioner a notice in writing of completion of erection of building or execution of work within one month of such completion/erection, accompanied by a certificate in the form specified in the rules made in this behalf as well as to give to the Municipal Commissioner all necessary facilities for inspection of such building or work. (2023) 3 SCC 195 108 22. Section 393 mandates every person, who intends to erect a building, to apply for sanction by giving notice in writing of his intention to the Municipal Commissioner in such form and containing such information as may be prescribed together with such documents and plans. Similarly, Section 394 also mandates every person who intends to execute any of the works specified in clause (b) to clause (m) of sub-section (1) of Section 390 to apply for sanction by giving notice in writing of his intention to the Municipal Commissioner in such form and containing such information as may be prescribed. 23. It is, therefore, evident on a conjoint reading of Sections 403, 390 and 394 of the KMC Act that it is the obligation of the person intending to erect a building or to execute works to apply for completion certificate in terms of the Rules framed thereunder. It is no part of the flat owner’s duty to apply for a completion certificate. When the respondents had applied for permission/sanction to erect, the Calcutta Municipal Corporation Buildings Rules, 1990 (hereafter “the 1990 Rules” for short) were in force. Rule 26 of the 1990 Rules happens to be the relevant Rule. In terms of sub-rules (1) to (3) of Rule 26 thereof, the obligation as cast was required to be discharged by the respondents. Evidently, the respondents observed the statutory provisions in the breach.” This position is supported by other decisions, including Pioneer Urban Land and Infrastructure Ltd. (supra) and Treaty Construction (supra), where the absence of these certificates was found to constitute a deficiency in service. In the present case, the ADA’s failure to provide the required certificates justifies the appellant’s refusal to take possession. This strengthens the appellant’s claim for additional compensation to compensate for the delay caused by ADA’s breach of its statutory obligations. 22. This Court is of the considered view that both parties have exhibited lapses in their respective obligations. On the one hand, the appellant, despite having paid the tentative price of Rs. 56,54,000/- in 2012, failed to remit the additional amount of Rs. 3,43,178/-, as demanded by the ADA, even after being repeatedly reminded. Instead, the appellant persistently sought a waiver of the penal interest on the [2024] 9 S.C.R. Dharmendra Sharma v. Agra Development Authority delayed payment, eventually settling the amount only on 04.06.2019, a significant delay that cannot be overlooked and that too without the interest component which had further accrued over a period of about five years. On the other hand, the ADA, despite making an offer of possession in 2014, did not fulfil its statutory obligations by providing the requisite completion certificate and firefighting clearance certificate, both of which are essential for a valid and lawful offer of possession. The absence of these documents, which were also not furnished before the NCDRC, unquestionably vitiates the offer of possession made by the ADA. 23. In light of the aforementioned observations and taking into account the shortcomings on the part of both the appellant and the ADA, this Court deems it appropriate to provide a compensation of Rs. 15,00,000/- (Fifteen Lakhs only) apart from what was awarded by the NCDRC. Therefore, apart from the refund of the entire amount deposited by the appellant @ 9% interest per annum from 11.07.2020 till the date of refund, the ADA is directed to pay an additional amount of Rs. 15,00,000/- (Fifteen Lakhs only) to the appellant. The entire amount should be rendered to the appellant within three months of this order. We also order the ADA to return the non-judicial stamp worth Rs. 3,99,100/- back to the appellant. 24. Furthermore, we refrain from imposing any exemplary costs on either party, recognizing that both have contributed to the situation at hand. It is also to be noted that the ADA, being a civic body tasked with serving the public and operating on a non-profit basis, should not be unduly penalized in a manner that could impede its functioning. 25. The Civil Appeals 2809-2810 of 2024 are disposed of accordingly. 26. The appeal filed by the ADA i.e. Civil Appeal No. 6344 of 2024 stands dismissed, as its primary arguments regarding both limitation and pecuniary jurisdiction are found to be without merit. Result of the case: Civil Appeal Nos. 2809-2810 disposed of; Civil Appeal No. 6344 of 2024 dismissed. †Headnotes prepared by: Divya Pandey