Jaiprakash Associates Asked To Refund Rs41.75 Lakh With 9% Interest to a Homebuyer
Moneylife Digital Team 09 March 2023
National consumer dispute redressal commission(NCDRC) has ordered Noida-based Jaiprakash Associates Ltd to refund the amount of Rs41.75 lakh to a homebuyer along with an interest of 9% for failing to deliver the flat on time. The Commission also asked the developers to pay the buyer a compensation of Rs10,000. 
In the order, the bench of presiding members C Viswanath and Subhash Chandra says, “In the present case, even after payment of more than 90% of the consideration of the apartment, Jaiprakash Associates failed to fulfill its contractual obligation of delivering possession of the unit of Fateh Singh Chauhan within the time stipulated in the agreement, or even within a reasonable time thereafter. The possession of the flat has still not been offered to the buyer. It has already been nine years from the date of the promise of possession. The buyer is, therefore, entitled to a refund along with compensation.”
Mr Chauhan had booked a flat in the Kassia project of the developer located at Jaypee Greens Sports City in Gautam Budh Nagar. The agreement was executed on 29 January 2011 for the flat. The period for delivery of possession provided was 24 months with a further grace period of 90 days. However, the developer failed to complete the construction work even after the grace period.
Mr Chauhan lodged a complaint to the state commission demanding the builder to refund Rs41.75 lakh he had deposited along with an interest of 18% per annum. The buyer also insisted that he should be provided with Rs15 lakh for the physical and mental agony caused by the Jaiprakash Associates. 
During the hearing before the state commission, Jaiprakash Associates contended that the construction delay was due to the National Green Tribunal (NGT) issues, which restrained all builders of Noida and Greater Noida from extracting groundwater and farmers’ agitation. It also stated that Mr Chauhan had invested money in the real estate market to obtain profits and under section 2(1) (d) of the Consumer Protection Act, he is not a consumer.
The state commission partly allowed the complaint, and the interest rate on refund was fixed to be 10% per annum. The cost of litigation was decided as Rs10,000 by the state commission. Aggrieved by the ruling, both Jaiprakash Associates and Mr Chauhan approached NCDRC. 
After perusal of every document, the national Commission found that the argument of the NGT order barring builders from extracting water cannot stand as the ban was on the extraction of water, not on the construction of buildings. The delay of nine years was not excused by the Commission and it evaluated that the builder should refund the money the buyer deposited.
Placing reliance on the SC judgment in Experion Developers Pvt Ltd vs Sushma Ashok Shiroor case, the state commission's decision was slightly modified by NCDRC. The interest of 10% was reduced to 9% per annum. The rate of interest would be raised to 12% if the builder failed to refund the amount within two months of the issue of order, it added.
(First Appeal No813 of 2020   Date: 3 January 2023) 
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