Supreme Court of India
Dharmendra Sharma vs Agra Development Authority Vice … on 6 September, 2024
Author: Vikram Nath
Bench: Vikram Nath
2024 INSC 667
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.2809-2810 OF 2024
DHARMENDRA SHARMA …APPELLANT(S)
VERSUS
AGRA DEVELOPMENT AUTHORITY…RESPONDENT(S)
WITH
CIVIL APPEAL NO.6344 OF 2024
JUDGMENT
VIKRAM NATH, J.
1. Civil Appeals 2809-2810 of 2024, by the appellant
filed under Section 23 of the Consumer Protection
Act, 19861, read with Order XXIV of the Supreme
Court Rules, assail the correctness of the final
judgment and order dated 15.09.2023 passed by
the National Consumer Disputes Redressal
Commission2 in CC No.600/2020 as also the order
dated 30th October, 2023 passed on the Review
Signature Not Verified
Application No.335/2023. By the aforesaid orders,
Digitally signed by
Neetu Khajuria
Date: 2024.09.07
16:58:01 IST
Reason:
the NCDRC allowed the CC No.600/2020 partly to
1
CPA, 1986
2
NCDRC
C.A. No.2809-2810/2024 Page 1 of 19
the extent that it directed refund of the entire
amount deposited by the Complainant (appellant)
(except non-judicial stamp paper worth
Rs.3,99,100/- deposited on 15.02.2014) along with
interest @9% p.a. from the date of the complaint i.e.
11.07.2020 till the date of refund within a period of
two months from the date of the order.
2. Further, Civil Appeal No. 6344 of 2024 has been
filed by the Agra Development Authority 3
assailing the correctness of the same judgment of
the NCDRC dated 15.09.2023 partly allowing the
complaint.
3. The appellant -Dharmendra Sharma had
applied for allotment and purchase of an
apartment (residential flat) in the category of
Super Deluxe 2 on 28.07.2011 and had deposited
the booking amount of Rs.4,60,000/- along with
the application. This application was submitted
pursuant to an advertisement issued by the ADA
for a group housing project lodged in the name of
ADA Heights, Taj Nagari, Phase II at Fatehabad
Road, near Taj Express Way, Ring Road, Agra. The
allotment was done by lottery system on
29.08.2011 whereby the appellant was allotted Flat
No.DT-1/1204 which was communicated vide letter
3
ADA
C.A. No.2809-2810/2024 Page 2 of 19
dated 19.09.2011, according to which the tentative
price of the apartment was Rs.56,54,000/- which
could be deposited in 24 equal quarterly
instalments or could be paid in full with certain
other relaxations. The appellant, opted for full
payment and accordingly vide letter dated
21.10.2011, attached two cheques, one by the
appellant of Rs.6.94 lakhs and the other of Rs.45
lakhs issued by the LIC Housing Finance Limited.
Possession was to be given within six months under
the scheme.
4. Upon completion of six months, the appellant
requested for possession vide communication dated
03.04.2012. Apparently, the construction was not
completed and, in any case, not ready for delivery
of possession, as such no possession was delivered
even after six months. The appellant thereafter
received a communication dated 04.02.2014
offering possession subject to further payment of
Rs.3,43,178/- along with non-judicial stamp paper
for execution of the deed amounting to
Rs.3,99,100/-. The demand so raised was under
the following three heads:
i) Rs.84,300/- for solar system;
ii) Rs.46,878/- as leased premium; and
iii) Rs.2,12,000/- for covered parking area.
C.A. No.2809-2810/2024 Page 3 of 19
5. On receipt of the said letter, the appellant visited
the site as also the office of ADA on 15.02.2014. He
deposited the non-judicial stamp papers as
required of Rs.3,99,100/-. But after inspection of
the site, he found various deficiencies in the
construction which were reported to the Assistant
Engineer of the ADA with the request that once the
deficiencies are removed, he may be communicated
for taking over possession. ADA sent reminders
dated 22.09.2014 and 20/21.11.2014 for
depositing the balance amount of Rs.3,82,748/-.
The appellant, on the other hand, was demanding
for completion certificate. There is a further
communication by the ADA dated 17.01.2018
demanding an amount of Rs.6,11,575/- and for
taking possession after depositing the same and
getting the deed executed. On the other hand, the
appellant, vide communication dated 02.04.2018,
requested for waiver of interest on the balance
amount and also sought confirmation whether the
flat was ready for physical possession.
6. It was thereafter that the appellant along with letter
dated 04.06.2019, sent a cheque dated 01.06.2019
for Rs.3,43,178/- and again requested for
confirmation of the date of possession. The ADA
encashed the said cheque but did not inform any
date for handing over possession. It looks like the
C.A. No.2809-2810/2024 Page 4 of 19
appellant got the loan transferred to the State Bank
of India 4 whereupon the SBI is writing letters
demanding the title deed of the apartment vide
communications dated 14.03.2017, 25.06.2019
and 19.10.2019. These communications further
mention that in case the title deed is not deposited,
then penal interest @2% p.a. would be levied. The
appellant again reiterated his earlier request for
waiver of interest on balance amount vide reminder
dated 18.09.2019 and again requested for
confirmation whether the flat was ready for
physical possession. The appellant again visited the
office of ADA on 23.11.2019 and requested for
completion certificate and firefighting clearance
certificate, which were not provided. He again
visited the site and found that the apartment was
not in a habitable condition. The appellant thus
proceeded to institute a complaint before the
NCDRC on 10.07.2020 alleging deficiency in service
as also unfair trade practice on the part of ADA.
7. The ADA filed its reply in which the amounts as
deposited by the appellant, as noted above, were
admitted. Further, according to ADA, the
construction was ready and possession was offered
on 04.02.2014 along with demand of Rs.3,43,178/-
which the appellant did not pay and continued to
4
SBI
C.A. No.2809-2810/2024 Page 5 of 19
claim for waiver of interest and had ultimately paid
the said amount on 04.06.2019 vide cheque dated
01.06.2019. According to ADA, after adjustment
there was still an outstanding amount of
Rs.4,71,159/- as on 05.02.2021. It was also stated
in the written statement that in 2011, at the time
of allotment, the tentative price was Rs.56,54,000/-
and under Clause 45 of the Registration and
Allotment Rules, it was clearly mentioned that the
price could vary upto 10%. Further, according to
ADA, the demand raised by the letter dated
04.02.2014 of solar system, lease premium and car
parking were apart from the cost of the flat and not
due to increased cost. The appellant had
unnecessarily delayed payment of the demand
raised on 04.02.2014. It was also stated in the
written statement that out of the 582 apartments
built under the project in question, except for 20
allottees, all other allottees had taken possession.
The ADA further pleaded that the complaint was
barred by time and secondly, that as the total
payment made by the appellant was
Rs.59,97,178/-, as such it would not fall within the
pecuniary limit of the NCDRC, and therefore, the
complaint was liable to be dismissed for the above
two reasons also.
C.A. No.2809-2810/2024 Page 6 of 19
8. The parties led their evidence. The NCDRC rejected
technical objections raised by the ADA regarding
limitation as also the pecuniary jurisdiction. In so
far as the limitation is concerned, the NCDRC held
that as subsequent demand and reminders were
sent by the ADA and the ADA even accepted the
cheque of Rs.3,43,178/- in 2019, it was not open
for the ADA to raise the plea of limitation. In so far
as the pecuniary jurisdiction is concerned, the
NCDRC held that the claim was of more than Rs.2
crores as such the said objection was also not
sustainable. The NCDRC, however, held that the
additional demand made by the ADA vide
communication dated 04.02.2014 although was
other than additional cost of 10% which was
permissible but, in any case, it was within the 10%
admissible clause, as such could not be held to be
illegal. The NCDRC also held that if the possession
was delayed beyond two years, the appellant would
be entitled for a refund but in the present case,
Clause 27 of the Registration and Allotment Rules
would not be applicable. The NCDRC further held
that although the appellant had deposited the non-
judicial stamps worth Rs.3,99,100/- on
15.02.2014 but he continued to delay payment of
additional demand of Rs.3,43,178/- and was
continuously requesting for waiver of interest
C.A. No.2809-2810/2024 Page 7 of 19
resulting into the presumption that he was avoiding
payment of the balance amount. On such finding
the NCDRC denied to grant interest from the date
of deposit but made it applicable from the date of
the filing of the complaint. In so far as the
deficiency in construction was concerned, the
NCDRC found that only bald allegations have been
made by the appellant and he never made any effort
to get a report from the Commissioner and allowed
the apartment in question to remain locked for six
years.
9. After considering the pleadings and evidence on
record and in view of the above findings, the
complaint was partly allowed by the NCDRC on
15.09.2023.
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.
C.A. No.2809-2810/2024 Page 8 of 19
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 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
C.A. No.2809-2810/2024 Page 9 of 19
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
5
(2023) 3 SCC 195
6
(2019) 8 SCC 416
7
(2019) 8 SCC 157
C.A. No.2809-2810/2024 Page 10 of 19
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 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 Singh 8
(b) Rishab Singh Chandel & Anr. vs.
Parsvnath Developers Ltd. & Anr.9
(c) Lucknow Development Authority vs.
M.K.Gupta 10
(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
8
(2004) 5 SCC 65
9
Civil Appeal No.3053 of 2023
10
(1994) 1 SCC 243
11
(2020) 16 SCC 226
12
(2022) 6 SCALE 16
C.A. No.2809-2810/2024 Page 11 of 19
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 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
C.A. No.2809-2810/2024 Page 12 of 19
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
C.A. No.2809-2810/2024 Page 13 of 19
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 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,
C.A. No.2809-2810/2024 Page 14 of 19
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 of13
(2023) 3 SCC 195
C.A. No.2809-2810/2024 Page 15 of 19
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.
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
C.A. No.2809-2810/2024 Page 16 of 19
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 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.
C.A. No.2809-2810/2024 Page 17 of 19
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
C.A. No.2809-2810/2024 Page 18 of 19
arguments regarding both limitation and pecuniary
jurisdiction are found to be without merit.
……………………………………J.
(VIKRAM NATH)
……………………………………J.
(PRASANNA BHALACHANDRA VARALE)
NEW DELHI
SEPTEMBER 06, 2024
C.A. No.2809-2810/2024 Page 19 of 19