Supreme Court of India
UTPAL TREHANversusDLF HOME DEVELOPERS LTD.
- Citation
- 2022 INSC 688
- Decided
- 11 July 2022
- Disposal
- Disposed off
- Bench
- DINESH MAHESHWARI
Holding
The builder cannot claim maintenance charges from the allottee, and the State Commission’s direction that delayed possession compensation be paid at Rs 10 per sq ft from March 2011 is affirmed.
Summary
Utpal Trehan bought a flat from DLF Home Developers Ltd. under an Apartment Buyers’ Agreement that stipulated possession within 36 months and required payment of maintenance charges to a "maintenance agency". Possession was delayed due to lack of regulatory clearance, and the builder later demanded an additional Rs 9 lakhs, which the buyer rejected, claiming the demand was illegal and that he had not received a notice of default. The State Consumer Disputes Redressal Commission allowed the buyer’s claim except for maintenance charges, while the National Commission modified the compensation for delayed possession and upheld the maintenance charge direction. On appeal, the Supreme Court held that the builder could not claim maintenance charges because the maintenance agency was not the builder and the association was not a party, and it restored the State Commission’s order that delayed possession compensation be paid at Rs 10 per sq ft from March 2011. The Court also declared the builder’s June 10 2013 possession offer invalid and ordered a fresh offer of possession within eight weeks.
Issues considered
- Whether the allottee is liable to pay maintenance charges to the builder under the Apartment Buyers’ Agreement.
- Whether the builder’s demand of Rs 9 lakhs was a valid condition for possession.
- From which date and at what rate delayed possession compensation should be calculated.
- Whether the builder’s letter dated 10 June 2013 constituted a valid offer of possession.
Legislation cited
Subjects
Apartment Buyers Agreementmaintenance chargesdelayed possession compensationConsumer Protection Actpossession offercontract modificationbuilder liabilityconsumer disputemaintenance agency
Judgment
458 [2022]REPORTS
SUPREME COURT 15 S.C.R. 458 [2022] 15 S.C.R.
A UTPAL TREHAN
v.
DLF HOME DEVELOPERS LTD.
(Civil Appeal No. 4690 of 2022)
B
JULY 11, 2022
[DINESH MAHESHWARI AND ANIRUDDHA BOSE, JJ.]
Consumer Protection Act, 1860: Apartment Buyers’ Agreement
– Delayed Possession Compensation – Builder under obligation to
C deliver the possession of the certain flats to the allottee – Handing
over possession delayed since builder could not get certain
regulatory clearance – Later, builder raised additional demands
under different heads, which as per the allottee added upto Rs 9
lakhs (approx) – As per the allottee, they had cleared the requisite
installments – The allottee did not take the possession in protest of
D additional demand – The allottee was further aggrieved by the fact
that he had been denied certain payment related benefits on beings
offered possession of the flat – Per contra the builder supported
such denial on the ground that there was default in payment by the
allottee within due date of the installments – The allottee supported
E the fact of delayed payment on the premise that they did not receive
notice of such demand on 29 December 2011, as alleged by builder
– Further, dispute also revolved around payment of maintenance
charges, as such charges, as per builder, were due to be paid by
allottee – Thereafter, allottee took up the entire matter before the
State Consumer Disputes Redressal Commission, which held in favour
F of the allottee except on the question of maintenance charges –
Aggrieved on the question of the maintenance charges, the allottee
preferred appeal before National Commission – National Commission
partly allowed the appeal while making modification in the direction
of the State Commission as to the delayed compensation – Aggrieved
G by such modification, the allottee filed instanat appeals – Held:
The allottee were justified in not taking of possession since the
demand of the sum of 9 lakhs was illegal, as per facts, and such
possession was conditional on payment of the aforesaid amount –
Upon considering the entire material on record the builder failed to
establish the fact that it was on 29 December 2011 that the notice
H
458
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 459
for the payment of the installment was issued by them – The builder A
did not bring any material on record to show that it was the builder
who was carrying out maintenance work which could have brought
them within the definition of “maintenance agency” under Apartment
Buyers’ Agreement - The entity entitled to such payment was not
impleaded as party to the proceeding – The builder, since unable to
B
get requisite regulatory clearance modified the terms of agreement
thereby amending the starting date of computing delayed payment
of compensation hence National Commission erred in making
modification in such date and State Commission was right in its
direction as to date of commencement of the payment of delayed
compensation. C
Disposing of the appeals, the Court
HELD: 1. The definition of Maintenance Agency means
“DHDL (the builder) or association of allottees or such other
agency but the conjunction “or” as has been applied in the
definition clause ought to mean in the alternative and this D
definition cannot be construed to infer that even after handing
over the maintenance work to an association, the builder shall
continue to remain as a maintenance agency entitled to collect
maintenance charges. The clause relating to fixation of total
maintenance charges only specifies the obligation of an allottee E
to pay such charges and the substantive Agreement specifies
again that the maintenance charges would be payable to the
maintenance agency. In so far as the subject dispute is concerned,
the builder’s case, as stated above, is that the maintenance agency
is to receive the maintenance charges but no specific case has
been made out that the builder themselves are carrying on the F
maintenance work, which could have brought them within the
definition of maintenance agency under the main Agreement. In
such circumstances, it cannot be appreciated as to how, in dealing
with the allotees’ complaint against the builder, the two statutory
fora passed orders which effectively required the allotee to make G
over payment as maintenance charges to a third party, the
association in this case. No principal-agent relationship has been
established between the builder and the association as regards
the Maintenance Agreement entitling the builder to claim and
receive maintenance charges. The builder, at best, is facilitator
H
460 SUPREME COURT REPORTS [2022] 15 S.C.R.
A in organising a maintenance agency. The overall obligation of a
flat buyer to pay maintenance charges may be derived from
interpretation of clause 20 of the main Agreement. But without
any claim from the entity, who are to render maintenance services
and charge for the same, the two statutory fora ought not to have
directed the allottee to make payment of maintenance charges.
B
The National and the State Commissions, have committed error
in directing the allottee to make payment of maintenance charges,
which ought to have been paid to the association when there was
no claim from the association in the first place. Secondly, nothing
has been brought to the notice of the Court from which it could
C be inferred that the builder had the authority to represent the
association for collecting maintenance charges. On the other hand,
the builder’s own case is that the maintenance charges ought to
be paid to the association. The latter (i.e., the association) has
not been impleaded as a party at any stage of these proceedings.
Nor they have prosecuted any claim. [Para 17 and 18][471-E-H;
D 472-A-E]
2. So far as start of the running time for quantifying delayed
payment of compensation from March 2013 is concerned, the
builder themselves had modified the relevant clause by their
letter dated 26th March 2009, amending the starting date for
E computing delayed payment of compensation from end of three
years from the date of Agreement to three years from the date of
booking. Thus, the date of booking in the case of the allottee
being March 2008, the State Commission had rightly directed
payment of delayed compensation from March 2011. [Para
F 23][475-G-H; 476-A-B]
3. The dispute between the parties primarily arose as the
builder denied substantial benefits to the allottee for nine days’
delay in clearing instalment. This allegation of delay has been
rejected by the Consumer Fora and their concurrent finding is
that no proper demand was made for payment of such instalment.
G
On a plain reading of this letter, it cannot be said that the builder
offered physical possession only on remitting of payments as per
statement of accounts, which was for a sum of Rs.9,00,382/- and
on furnishing an undertaking. The National Commission found
that the statement of account dated 10th June 2013 and demand
H on that basis was illegal. As the offer for possession was conditional
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 461
on settling of accounts and, as the accounts reflected illegal A
demand, the builder cannot argue that there was a valid offer for
possession under the letter dated 10 th June 2013. In this
background, in the event the allottee wanted proper adjudication
of his rights and liabilities before asking for interim possession
of the flat which would have had carried with it unspecified
B
obligations, no fault can be found in such conduct of the allotee.
[Para 24][476-C-F]
DLF Homes Panchkula Pvt. Ltd. vs D.S. Dhanda and
Ors. [(2020) 16 SCC 318 : [2019] 7 SCR 1061; DLF
Home Developers Ltd. And Another vs Capital Greens
Flat Buyers Association & Ors. (2020] SCC Online SC C
1125 – distinguished.
Wing Commander Arifur Rahman Khan and Aleya
Sultana and Others vs DLF Southern Homes Pvt. Ltd.
and Others (2020) 16 SCC 512 : [2020] 9 SCR 136 –
held in-applicable. D
4. The State Commission found deficiency of service on
the part of the builder by sending wrong statement of accounts
along with the letter of possession and as per the finding of the
State Commission, the allottee was deprived in taking possession
of the flat, which was offered, because of these factors. The E
National Commission did not take a contrary view and in fact
came to a finding that the statement of account dated 10th June
2013 and demand on that basis was illegal. These findings arrived
by the two fora were on appreciation of evidence and there is no
perversity in such finding. So, the letter of 10th June 2013 cannot F
be treated as a valid offer letter. [Para 28][479-C-D]
Case Law Reference
[2019] 7 SCR 106 distinguished Para 25
[2020] 9 SCR 136 held inapplicable Para 26
G
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4690
of 2022.
From the Judgment and Order dated 23.07.2021 of the National
Consumer Disputes Redressal Commission, New Delhi in F.A. No.1638
of 2019. H
462 SUPREME COURT REPORTS [2022] 15 S.C.R.
A With
Civil Appeal Nos. 4691-4692 of 2022.
Pinaki Mishra, Sr. Adv., Pravin Bahadur, Aditya P. N. Singh,
Lakshya Khanna, Ms. Akanksha Thapa, Alabhya Dhamija, Drouhn Garg,
Ms. Seema Sundd, Ritu Raj Srivastava, Ms. Sonia Dhamija, M/s
B Karanjawala & Co., Abhishek S., Advs. for the appearing parties.
Petitioner-in-person.
Respondent-in-person.
The Judgment of the Court was delivered by
C
ANIRUDDHA BOSE, J.
Leave is granted on the limited question which was formulated by
this Court at the time of issue of notices, by the order passed on 3rd
January 2022 in SLP (C) No.19226 of 2021. So far as SLP (C)
Nos.5871-5872 of 2022 are concerned, leave is granted on the point on
D
which the appellants thereof had confined their grievances, recorded in
our order passed on 19th April, 2022. We shall refer to these points later
in this judgment. The controversy which we shall address in this judgment
revolves around the quantum of compensation that the appellant in SLP
(C) No.19226 of 2021 (now appeal) would be entitled to receive because
E of delay in delivery of possession of a flat as also the appellant’s obligation
to pay maintenance charges in respect thereof.
2. The specific disputes giving rise to these appeals relate to an
Apartment Buyers’ Agreement, executed on 3 rd December, 2008
between Utpal Trehan (whom we shall henceforth refer to as “allottee”)
F and DLF Home Developers Limited (we shall refer to them as the
“builder”) for purchase of a flat, within a complex named New Town
Heights in Sector-91, Gurgaon (now Gurugram), Haryana. This was
booked by the allottee on depositing a sum of Rs.5 lakhs in March 2008.
The allotment letter was issued on 16th April 2008, and allocation was
made of Apartment No. GBD-153 along with its parking. As per the
G Apartment Buyers’ Agreement, the area of the flat was to be 1760
square feet (super area). The consideration amount was Rs.45,12,000/-,
to be paid as per instalment payment plan forming part of the Agreement.
The stipulation relating to possession of the flat is contained in Clauses
11 and 17 of the said Agreement. A copy of the draft Agreement has
H been annexed to the allottee’s paper book. In substance, the time for
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 463
[ANIRUDDHA BOSE, J.]
possession has been stipulated to be within 36 months from the date of A
execution of the Agreement subject to certain qualifications and
exceptions incorporated in the Agreement itself. This date of delivery of
possession, along with the effects thereof, underwent certain changes,
as there was delay on the part of the builders in getting certain regulatory
clearance. Mr. Pinaki Mishra, learned Senior Advocate has appeared
B
for the builder and the allottee has appeared in person before us.
3. The facts forming genesis of the grievances of the allottee
have been summarised in the decision of the National Consumer Dispute
Redressal Commission (“National Commission”) delivered on 23 rd July
2021, which is under appeal before us. We quote below the relevant
C
passages from this decision:-
“12. ….. The allotment letter dated 16.04.2008 and
Annexure-3 to the Apartment Buyer’s Agreement dated
03.12.2008 provided a “Time Linked Payment Plan” under
which 95% of the sale consideration (including Rs. 5,00,000/
D
- of booking amount) had to be paid in 11 instalments starting
from 29.05.2008 and ending on 29.06.2010. Vide Clause-12
of the Allotment Letter dated 16.04.2008 and Clause-11 of
Apartment Buyer ’s Agreement dated 03.12.2008, the
possession had to be handed over within 36 months from the
date of agreement. Environment Clearance Certificate was E
delayed as such the builder could not start construction till
May, 2009, i.e. more than one year from booking. In such
circumstances, the builder through letter dated 26.03.2009,
amended the terms of the agreement and the payment of the
instalments were changed as “construction Linked Payment
F
Plan”. The builder has simultaneously provided various
benefits to the buyers, i.e. Advance Payment Rebate in the
shape of interest at the rate of 13% p.a. on the amount in
excess of 35% of sale price as on 26.03.2009, 5% discount
of basic sale price, increase of approximately 5% area and
compensation for delayed possession @ Rs.10/- per Sq. ft. G
per month from the date of expected possession till actual
possession and Timely Payment Rebate, equivalent to 10%
basic sale price. Letter dated 23.06.2009 and statement of
account dated 10.06.2013 prove that the benefits of (i)
Rs.9059/- as Advance Payment Rebate, (ii) Rs. 1,98,000/- as
H
464 SUPREME COURT REPORTS [2022] 15 S.C.R.
A 5% discount of basic sale price and (iii) increase of 5% area
have been given to the complainant.
13. The complainant argued that “Timely Payment Rebate”
and “compensation for delay in possession” had not been
given in statement of the account dated 10.06.2013, for which
B he was entitled. The builder has denied the Timely Payment
Rebate on the ground that in spite of service of demand letter
dated 29.12.2011, the amount due was not deposited till last
date i.e. 18.01.2012, rather it was deposited on 27.01.2012
(without including the amount of interest accrued on it in the
meantime). As the time was essence of contract and this
C instalment was not deposited in time as such the complainant
was not entitled for Timely Payment Rebate.”
(quoted verbatim from paperbook)
We shall discuss separately the position of the respective parties
as regards obligation of the allottee to pay maintenance charges.
D
4. The allottee had approached the Delhi State Consumer Disputes
Redressal Commission (“State Commission”), in the month of May 2015,
after the builder had raised additional demands under different heads.
As per the allottee, the total sum, as demanded, added upto Rs.9 lakhs
approximately. Otherwise, the allottee claims to have had cleared the
E requisite instalments. At that point of time, the main complaint of the
allottee was of being deprived of certain payment related benefits on
being offered possession of the flat. He was being denied these benefits,
since as per the builder, the allottee had made default in payment within
the due date on demand of the developer of the ensuing instalment. As
F would be apparent from the said passages of the decision under appeal,
the builder’s contention is that by a notice of 29th December 2011, the
allottee was to pay the next instalment by 18th January 2012, but this
was paid on 27th January 2012. The builder thus alleged nine days’ delay.
The allottee’s stand on this count, on the other hand, was that he had not
received the notice of 29th December 2011, but on receiving a reminder
G on 22nd January 2012, he cleared the dues on 27th January of that year.
5. The delivery and payment stipulations were modified on account
of delay in getting environmental clearance and these modifications, as
made by the builder, has been summarised in the passage quoted above
from the National Commission decision. So, we are avoiding a repeat of
H these modification terms in this judgment.
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 465
[ANIRUDDHA BOSE, J.]
6. Before the State Commission, the allottee prayed for the A
following reliefs:-
“4. ……. i. Give the possession of the said flat at the earliest.
ii. Pay an amount of Rs. 10,00,000/- as compensation for
causing mental trauma and agony to complainant due to delay
in giving the possession. B
iii. Also pay additional delayed possession rent @ Rs. 15/-
sq. ft. till the possession is offered to complainant.
iv. Further waive of the undue/unjustifiable demand already
raised towards the final dues settlement. C
v. To pay Rs. 50,000/- towards the expenses incurred by the
complainants towards telephonic communications and
personal visits made to OP since 2006.
vi. To pay a sum of Rs. 75,000/- towards the payment of
litigation expenses.” D
(quoted verbatim from paperbook)
7. During pendency of the proceeding before the State Commission,
an application was filed by the builder to bring on record certain
subsequent events. What was sought to be brought on record included
crediting to the allottee compensation for delayed possession of E
Rs.4,22,816/-, Timely Payment Rebate of Rs.4,02,076/- and interest of
Rs.14,082/-. This application also highlighted that certain sum of money
was already credited to the allottee’s account under the head of Early
Payment Rebate. This application also showed the liability of the
complainant (i.e. the allottee) of Rs.3,16,899/- as maintenance charges, F
Rs.96,000/- as IBM charges and Rs.14,18,203/- as holding charges. The
said application appears to have been filed subsequent to an attempt at
mediation while the dispute was pending before the State Commission.
8. The State Commission found that there was deficiency in service
and the complaint was allowed in following terms:- G
“20. …… i. OP shall issue fresh offer of possession of the
apartment in question i.e. GBD-153, New Town Heights in
Sector-91, Gurgaon to the complainant and shall handover
the possession of the apartment to the complainant within a
period of 06 weeks. H
466 SUPREME COURT REPORTS [2022] 15 S.C.R.
A ii. OP shall also execute the sale deed/conveyance deed and
get it registered in the name of the complainant on payment
of stamp duty, registration charges and other incidental
charges, if any, by the complainant, within a period of one
month thereafter.
B OP shall pay to the complainant the delayed compensation
@ Rs. 10/- per sq. ft. per month for the delayed period from
the agreed date of possession i.e. March, 2011 till the date of
fresh offer of possession after adjusting the delayed
compensation already paid to the complainant.”
C (quoted verbatim from paperbook)
9. On the question of maintenance charges, however, the State
Commission went against the allottee, holding : -
“19. As regards payment of Rs 3,16,899/- towards maintenance
charges, and Rs.14,18,204/- toward holding charges @ Rs.
D 10 per square feet till 11.10.2018, as is stated in the aforesaid
handing over the cheque issued earlier a new cheque can be
issued against the same.
As on date, the complainant is liable to make the following
payment as per the agreement:
E
i. Maintenance charges (till 30.09.2018) – Rs.3,16,899.
ii. IBMS (Interest Bearing Maintenance Security) – Rs.
96,000/-
iii. Holding Charges (@ Rs. 10/- per sq. ft. till 11.10.2018)
F – Rs.14,18,203/-.
However, upon suggestions from this Hon’ble Commission,
the opposite party shall consider waiving the holding charges
accruing day by day and hence, nothing remains payable to
the opposite party. The maintenance security and the
G maintenance charges incurred towards upkeep of the
multi-storey building as mentioned above shall be payable to
the Condominium Association who are maintaining the
property inquestion since the date the property was ready for
possession and was conveyed/offered to the complainant.”
H (quoted verbatim from paperbook)
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 467
[ANIRUDDHA BOSE, J.]
10. One of the critical issues which was examined by the State A
Commission was as to whether there was any delay in payment of
instalment by the allottee upon demand being made. This question arose
as the builder had denied certain benefits to the appellant which would
have accrued to him if timely payment of instalments was made on
demand. The builder alleged that the demand in this case was made on
B
29th December 2011 requiring the allottee to make payment by 18th
January 2012. As we have already discussed, the allottee took the plea
that the letter of 29th December 2011 was never received by him and
when he received a reminder letter of 19th January 2012 on 22nd January
2012, he made the payment on 27th January 2012, factoring in certain
holidays which intervened. The State Commission examined this issue C
and gave a finding on fact that the material on record did not establish
that the demand notice of 29th December 2011 was served on any adult
family member/known person of the allottee and that the developer had
failed to prove service of demand notice upon the allottee. The State
Commission thus held that the allottee could not be deprived of the benefits
D
outlined in the builder’s letter of 26th March 2009 on the allegation of
failure to pay instalment within due date.
11. The appeal of the allottee to the National Commission was
mainly against the finding given by the State Commission on maintenance
charges. The builder questioned legality of that part of the decision of
the State Commission under which they were directed to issue fresh E
offer of possession and payment of delayed compensation.
12. The National Commission partly allowed both the appeals,
inter-alia holding:-
“In view of aforementioned discussions First Appeal No. 1530 F
of 2019 is partly allowed and First Appeal No. 1638 of 2019
is partly allowed. DLF Home Developers Ltd., (the builder) is
directed to (i) offer possession of the apartment in dispute to
the complainant afresh and hand over possession to the
complainant within 6 weeks and execute the sale/conveyance
deed in his name, within one month thereafter, on payment of G
stamp duty, registration charges and other incidental legal
charges, (ii) pay compensation for delay in possession, i.e
interest @ Rs. 6%- per annum on the sale price deposited by
him for the delayed period from July, 2013 till the date of
fresh offer of possession, adjusting “Early Payment Rebate” H
468 SUPREME COURT REPORTS [2022] 15 S.C.R.
A of Rs.95,136/- as mentioned in statement of account dated
10.06.2013 and (iii) pay “Timely Payment Rebate” i.e 10%
of basic sale price. The builder is entitled to realise/adjust
the Maintenance charges, from the date of issue of Occupation
Certificate and cost of increased area (i.e. the area increasing
to 5% of the increased area). The builder shall pay a cost of
B
Rs.50,000/- to the complainant to meet out his litigation and
other expenses.”
(quoted verbatim from paperbook)
13. So far as the allotee’s appeal is concerned, (arising out of SLP
C (C) No.19226 of 2021) at the time of issue of notice, this Court had
passed the following order:-
“Heard petitioner in person.
Issue notice limited to the question of maintenance charges as
provided for by NCDRC in the concluding part of the order
D impugned. Notice may be made returnable in four weeks.
Dasti service in addition to order in process permitted.”
14. In the appeal filed by the builder, at the stage of issue of notice
on the petition for special leave to appeal, it was recorded in our order of
19th April 2022 that the learned counsel appearing for the petitioner, (i.e.,
E the builder) essentially confined his submissions to the grievance of the
petitioner- developer in regard to the directions by the National
Commission and the State Commission for making ‘a fresh offer of
possession’. We have indicated earlier in this judgment that we are
granting leave restricted to these two questions only.
F 15. We shall first deal with the question of directions to pay to the
builder maintenance charges. In the definition Clause and Clauses 19,
20 and 39 of the Apartment Buyer’s Agreement dated 3rd December
2008, it has been specified:-
“Definitions
G ……
Maintenance Agency” means DHDL or association of allottees
or such other agency/body to whom the maintenance of the
Said Building/Said Complex (including common areas and
facilities) is handed over by DHDL and who shall be
responsible for providing the maintenance services within the
H
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 469
[ANIRUDDHA BOSE, J.]
Said Building /Said Complex and who shall be entitled to A
collect the Maintenance Charges.”
“19. Maintenance of the Said Building/Said Complex/Said
Apartment
In order to provide necessary maintenance services, upon the
completion of the Said Building/ Said Complex the B
maintenance of the Said Building/Said Complex may be
handed over to the association of Apartment allottees or such
other agency/ body/ company/ association of condominium.
The Allottee agrees to execute Maintenance Agreement (draft
given in Annexure VII to this Agreement) with the Maintenance C
Agency or any other nominee/ agency or other body/
association of Apartment owners as may be appointed by
DHDL from time to time for the maintenance and upkeep of
the Said Land/the Said Building/the Said Complex. This
Agreement shall not be deemed to be executed till the same is
signed by all the parties. The Allottee further undertakes to D
abide by the terms and conditions of the Maintenance
Agreement and to pay promptly all the demands, bills} charges
as may be raised by the Maintenance Agency from time to
time. DHDL reserves the right to change, modify, amend,
impose additional conditions in the Maintenance Agreement
E
at the time of its final execution. The Maintenance Charges
shall become applicable/ payable from the date DHDL has
received the occupation certificate/the date of allotment
whichever is later. It is further clarified that DHDL may at its
sole discretion hand over the maintenance of the Said Building/
Said Complex to anybody/association of Apartment owners F
of the Said Building/Said Complex including but not limited
to any body/ association of condominium of the Said Building/
Said Complex, as the case may be, at any time before/ after
the construction of the Said Building/ Said Complex is complete
either for each building or for the entire Said Complex and
G
the Allottee specifically gives his consent to this proposal. It
is further specifically clarified that the draft Maintenance
Agreement, set out in Annexure VII to this Agreement is merely
an indicative Agreement that is proposed to be entered into
with the Allottee for maintenance and upkeep of the Said
Building/ Said Complex, however, if at any time, after having H
470 SUPREME COURT REPORTS [2022] 15 S.C.R.
A taken over the Said Building/ Said Complex, the said
association of Apartment owners/ condominium of association
decides to modify, alter, add, delete any one or more of the
terms and conditions of the Maintenance Agreement, the
Allottee shall not have any objection to the same and shall
execute the Maintenance Agreement as may be required by
B
the Maintenance Agency or association of Apartment owners
or association of condominium or its nominees or assigns.
20. Fixation of total Maintenance Charges
The total Maintenance Charges shall be more elaborately
C described in the Maintenance Agreement (draft given in
Annexure VII). The Maintenance Charges shall be levied from
the date of occupation certificate or the date of allotment,
whichever is later and the Allottee undertakes to pay the same
promptly. It is agreed by the Allottee that the payment of
Maintenance Charges will be applicable whether or not the
D possession of Said Apartment is taken by the Allottee. The
Maintenance Charges shall be recovered on such estimated
basis which may also include the overhead cost on monthly/
quarterly intervals as may be decided by the Maintenance
Agency and adjusted against the actual audited expenses as
E determined at every end of the financial year and any surplus/
deficit thereof shall be carried forward and adjusted in the
maintenance bills of the subsequent financial year. The
estimates of the Maintenance Agency shall be final and
binding on the Allottee. The Allottee agrees and undertakes
to pay the maintenance bills on or before due date as intimated
F by the Maintenance Agency.
……
39. Association of apartment owners
The Allottee agrees and undertakes to join association/ society
G of apartment owners as may be formed by DHDL/Company
on behalf of Apartment owners and to pay any fees,
subscription charges thereof and to complete such
documentation and formalities as may be deemed necessary
by DHDL/ Company for this purpose.”
H (quoted verbatim from paperbook)
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 471
[ANIRUDDHA BOSE, J.]
16. Annexure VII to that Agreement appears at Page 185 of the A
paperbook in SLP (C) No. 19226 of 2021, which is in the form of a draft.
The actual copies of the Agreements, if executed, have not been annexed
to the paperbooks filed in either of these two appeals. No material has
otherwise been produced before us to show if the Maintenance Agreement
(Annexure VII to the main Agreement) was executed or not. Be that as
B
it may, even if we proceed on the basis that the maintenance Agreement
is applicable, the same constitutes a tripartite Agreement involving the
builder, New Town Heights Condominium Association, a registered
society and the purchaser. This is in the format of a standard form
Agreement with several portions thereof left blank. In the counter affidavit
of the builder, it has been stated that the maintenance charges are not C
paid to them but to the statutory condominium association of allotees
who actually renders maintenance services recovered from each allotee.
That association to us appears to be an independent body and there is
nothing on record to demonstrate that such association is an agent of
either the builder or the purchasers. In Clause 39 of the Apartment
D
Buyers’ Agreement, there is hint that such an Association might be
formed by the builder but no particular of its formation, or for that matter,
its existence have been shown before us at the time of hearing.
17. The definition of Maintenance Agency means “DHDL (the
builder) or association of allottees or such other agency…….” but the
conjunction “or” as has been applied in the definition clause ought to E
mean in the alternative and this definition cannot be construed to infer
that even after handing over the maintenance work to an association,
the builder shall continue to remain as a maintenance agency entitled to
collect maintenance charges. The clause relating to fixation of total
maintenance charges only specifies the obligation of an allottee to pay F
such charges and the substantive Agreement specifies again that the
maintenance charges would be payable to the maintenance agency.
18. In so far as the subject dispute is concerned, the builder’s
case, as stated above, is that the maintenance agency is to receive the
maintenance charges but no specific case has been made out that the G
builder themselves are carrying on the maintenance work, which could
have brought them within the definition of maintenance agency under
the main Agreement. In such circumstances, we are unable to appreciate
as to how, in dealing with the allotees’ complaint against the builder, the
two statutory fora passed orders which effectively required the allotee
H
472 SUPREME COURT REPORTS [2022] 15 S.C.R.
A to make over payment as maintenance charges to a third party, the
association in this case. We have already observed that from the materials
on record, no principal-agent relationship has been established between
the builder and the association as regards the Maintenance Agreement
entitling the builder to claim and receive maintenance charges. The builder,
at best, is facilitator in organising a maintenance agency. The overall
B
obligation of a flat buyer to pay maintenance charges may be derived
from interpretation of clause 20 of the main Agreement. But without
any claim from the entity, who are to render maintenance services and
charge for the same, in our opinion, the two statutory fora ought not to
have directed the allottee to make payment of maintenance charges.
C The National and the State Commissions, in our opinion, have committed
error in directing the allotee to make payment of maintenance charges,
which ought to have been paid to the association when there was no
claim from the association in the first place. Secondly, nothing has been
brought to our notice from which it could be inferred that the builder had
the authority to represent the association for collecting maintenance
D
charges. On the other hand, as we have already indicated, the builder’s
own case is that the maintenance charges ought to be paid to the
association. The latter (i.e., the association) has not been impleaded as a
party at any stage of these proceedings. Nor they have prosecuted any
claim.
E 19. We must point out here that from the two orders of the State
and the National Commissions, we do not find that the point on right of
the builder to claim maintenance charges was specifically discussed. In
the complaint before the State Commission, point was taken that in
absence of delivery of possession, charging for maintenance by the
F association was unjustified but the principle which we have discussed in
the preceding three paragraphs are purely legal issues and goes to the
root of the dispute relating to payment of maintenance charges. Moreover,
question of law formulated in paragraph 2D of the allottee’s special
leave petition (now appeal), in our opinion, is broad enough to cover this
issue. While determining rights of parties on a question of law which
G emerges from the pleadings and crystallises for adjudication, we cannot
ignore answering that question. For otherwise, an incorrect principle of
law may have to be laid down on account of failure of the litigants in
raising it in clear terms. Moreover, the nature of the dispute having
originated from a consumers’ grievance, the role of the Court has to be
H beyond just being an adjudicatory forum in an adversarial cause, and
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 473
[ANIRUDDHA BOSE, J.]
must have an element of proactivity in public interest. Having returned a A
specific finding on this point, we do not consider it necessary to deal
with the allottee’s contention that claim of maintenance charge was
unjustified in absence of possession of the subject-flat being delivered to
them.
20. Now we shall turn to the legality of the decision under appeal B
issuing direction upon the builder to make payment of delayed
compensation. The provision relating to delayed compensation is
contained in Clause 17 of the main Agreement:-
“17. Failure to deliver possession : Remedy to DHDL: The
Allottee agrees that if the construction and development of C
the Said Complex is abandoned or DHDL is unable to give
possession within thirty six (36) months from the date of
execution of this Agreement or such extended periods as
permitted under this Agreement, DHDL shall be entitled to
terminate this Agreement whereupon DHDL’s liability shall
be limited to the refund of the amounts paid by the Allottee D
with simple interest @ 6% per annum for the period such
amounts were lying with DHDL and DHDL shall not be liable
to pay other compensation whatsoever.
However, DHDL may, at its sole option and discretion, decide
not to terminate this Agreement in which event DHDL agrees E
to pay only to the Allottee(s) and not to anyone else and only
in cases other than those provided in Clauses 14, 15, 16 and
50 and subject to the Allottee not being in default under any
term of this Agreement, compensation @ Rs. 5/- per sq. ft. of
the Super Area of the Said Apartment per month for the period F
of such delay beyond thirty six (36) months or such extended
periods as permitted under this Agreement. The adjustment
of such compensation shall be done only at the time of
conveyancing the Said Apartment to the Allottee first named
in this Agreement and not earlier.”
G
(quoted verbatim from paperbook)
21. As there was delay in obtaining regulatory clearance for the
project, the builder themselves had made certain modifications in the
terms of the Agreement, providing certain benefits to the flat buyers.
This was done by the communication dated 26th March 2009 (at page
H
474 SUPREME COURT REPORTS [2022] 15 S.C.R.
A 223 of the paper book in the allottee’s appeal). The relevant portion of
this communication reads:-
“As far as “New Town Heights” is concerned, we would like,
to mention here that the necessary Building Plan Approvals
for all the sectors of “New Town Heights” have been received.
B As you know, we are a highly compliant organisation, and we
would like to start construction only after we have received
the final Environment Clearance, which is awaited. As soon
as we receive the same, we shall commence the construction.
However, to allay any fear that you might have as far as the
handing over period is concerned, we hereby revise the
C Compensation Clause No. 17 of the Agreement to Sell, to the
extent of doubling the Compensation payable to Rs. 10/- psft
per month, as against Rs. 5 /- psft per month, that was
applicable earlier. Similarly, if the customer delays in taking
over the possession once the possession is offered by the
D Company, he/she shall also be liable to pay Holding Charges
at the same rate, ie., Rs. 10/- psft per month, for the delay
involved in taking over the possession.
We stand behind our promised date of delivery as 3 years, as
we have already communicated earlier. We have amended this
E clause to “3 Years from the date of booking” instead of ‘3
years from the date of Agreement’, which was the earlier
commitment.”
(quoted verbatim from paperbook)
The direction of the State Commission on delayed compensation
F has already been quoted in this judgment. The National Commission,
however, modified this directive, which has also been quoted in the earlier
paragraph. This modification has been questioned by the allotee.
22. Paragraphs 15 and 16 of the National Commission’s decision
disclose the reasoning for modifying the directive of the State Commission
G upon the builder to pay delayed compensation. Such modification is as
regards the quantum of compensation and the relevant part of the
National Commission’s order is reproduced below:-
“15. So far as the compensation for delayed possession is
concerned, the complainant has accepted part of the benefits
H given under the letter dated 26.03.2009 and is claiming
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 475
[ANIRUDDHA BOSE, J.]
remaining benefits. By this letter, mode of payment of the A
instalments were changed as “construction Linked Payment
Plan”. The construction was started in May, 2009. After
adjusting the amount till March, 2009 and the benefits given
by the letter dated 26.03.2009, on it, the complainant was
asked to deposit instalment some time in 2010. Demand notice
B
dated 16.03.2012, shows that Terrace Floor Slab was
completed at that time and demand notice dated 18.06.2012
shows that the builder had applied for issue of Occupation
Certificate, which has been issued on 28.02.2013. Thereafter,
final accounts of the buyers were prepared and possession
was offered through letter dated 10.06.2013. Due to delay in C
starting construction payment schedule of the instalments was
changed and to mete out suffering of the buyers, various
benefits were provided. Delay in offering possession had
occurred as construction could not be started for more than
one year of booking. lf the buyers were required to payment
D
instalments on later dates than the dates fixed in the
agreement, then how it can be expected that the possession
could be given within three years of the agreement. In the
circumstances, the builder was justified in not giving
compensation for delayed possession in the statement of
account dated 10.06.2013. E
16. However, as we found that the complainant was entitled
for “Timely Payment Rebate” as such statement of the account
dated 10.06.2013 and demand on its basis was illegal. In
such circumstances we direct the builder to pay 6% p.a. interest
on the amount deposited by the complainant toward basic F
sale price, as compensation for delay in possession from July
2013 till date of offer of possession as directed by Supreme
Court in Wg. Cdr. Arifur Rahman Khan Vs. DLF Southern
Homes Pvt. Ltd., (2020) 16 SCC 512.”
(quoted verbatim from paperbook) G
23. We are, however, unable to accept this reasoning. So far as
start of the running time for quantifying delayed payment of compensation
from March 2013 is concerned, we find that the builder themselves had
modified the relevant clause by their letter dated 26th March 2009,
amending the starting date for computing delayed payment of H
476 SUPREME COURT REPORTS [2022] 15 S.C.R.
A compensation from end of three years from the date of Agreement to
three years from the date of booking. Thus, the date of booking in the
case of the allottee being March 2008, the State Commission had rightly
directed payment of delayed compensation from March 2011.
24. Mr. Mishra has urged that the entire responsibility for delivery
B of possession of the flat should not fall on his clients as the allottee
himself could have applied before the adjudicatory forum for possession
thereof subject to outcome of the case. But this argument in our view is
fallacious. The dispute between the parties primarily arose as the builder
denied substantial benefits to the allottee for nine days’ delay in clearing
instalment. This allegation of delay has been rejected by the Consumer
C
Fora and their concurrent finding is that no proper demand was made
for payment of such instalment. Mr. Mishra has, in his submissions,
emphasised on the “offer for possession” letter dated 10th June 2013
and his submission is that obligation to pay delayed payment compensation
cannot go beyond that date. The builder’s case is that they cannot be
D held responsible if the allottee does not take possession of the flat, when
offered. A copy of this letter has been annexed at page 235 of the builder’s
paperbook. On a plain reading of this letter, we find that the builder
offered physical possession only on remitting of payments as per
statement of accounts, which was for a sum of Rs.9,00,382/- and on
furnishing an undertaking. The National Commission found that the
E
statement of account dated 10th June 2013 and demand on that basis
was illegal. As the offer for possession was conditional on settling of
accounts and, as the accounts reflected illegal demand, the builder cannot
argue that there was a valid offer for possession under the letter dated
10th June 2013. In this background, in the event the allottee wanted
F proper adjudication of his rights and liabilities before asking for interim
possession of the flat which would have had carried with it unspecified
obligations, no fault can be found in such conduct of the allotee.
25. Reliance has been placed on the judgments of two coordinate
Benches of this Court in the cases of DLF Homes Panchkula Pvt.
G Ltd. vs D.S. Dhanda and Ors. [(2020) 16 SCC 318] and DLF Home
Developers Ltd. And Another vs Capital Greens Flat Buyers
Association & Ors. [(2020] SCC Online SC 1125] in support of the
argument of the builder that “Delay Compensation” could be awarded
only upto the date of offer of possession. But in this case, we have
already held that there was no valid offer for possession. In the case
H
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 477
[ANIRUDDHA BOSE, J.]
reported in [(2020) 16 SCC 318], interest was directed to be paid by A
way of compensation on deposited amount from the promised date of
possession to the actual date of handing over possession, and the
coordinate Bench directed, inter-alia, payment of interest at the rate of
9% per annum for a period of two months from the date of offer for
possession. In the case of Capital Greens Flat Buyers Association
B
(supra), interest was awarded as compensation for delay in delivery of
possession. The latter judgment was delivered in the special
circumstances of that case. We accept the argument advanced on behalf
of the builder that time for payment of compensation for delayed payment
shall stop running from the date of offer for possession. But in this case,
there was no valid offer for possession. Mr. Mishra also sought to bring C
to our notice the proposals made in course of mediation proceeding. But
mediation obviously failed between the parties and we cannot refer to
what transpired during the process of mediation while adjudicating the
right of the parties in an appeal.
26. The ratio of the judgment in the case of Wing Commander D
Arifur Rahman Khan and Aleya Sultana and Others vs DLF
Southern Homes Pvt. Ltd. and Others [(2020) 16 SCC 512] does
not apply in the facts of the present case. The aforesaid decision was
rendered in a context in which a coordinate Bench of this Court found
the Agreement involved in that case was lopsided, giving unjustified
E
advantage to the builder. The relevant paragraph from the judgment is
reproduced below:-
“25. The only issue which then falls for determination is
whether the flat buyers in these circumstances are constrained
by the stipulation contained in Clause 14 of ABA providing
F
compensation for delay @ Rs 5 per square feet per month. In
assessing the legal position, it is necessary to record that the
ABA is clearly one-sided. Where a flat purchaser pays the
instalments that are due in terms of the agreement with a delay,
Clause 39(a) stipulates that the developer would “at its sole
option and discretion” waive a breach by the allottee of failing G
to make payments in accordance with the schedule, subject
to the condition that the allottee would be charged interest @
15 per cent per month for the first ninety days and thereafter
at an additional penal interest of 3% p.a. In other words, a
delay on the part of the flat buyer attracts interest @ 18%
H
478 SUPREME COURT REPORTS [2022] 15 S.C.R.
A p.a. beyond ninety days. On the other hand, where a developer
delays in handing over possession the flat buyer is restricted
to receiving interest at Rs 5 per square feet per month under
Clause 14 (which in the submission of Mr Prashant Bhushan
works out to 1-1.5% interest p.a.). Would the condition which
has been prescribed in Clause 14 continue to bind the flat
B
purchaser indefinitely irrespective of the length of the delay?
The agreement stipulates thirty-six months as the date for the
handing over of possession. Evidently, the terms of the
agreement have been drafted by the developer. They do not
maintain a level platform as between the developer and
C purchaser. The stringency of the terms which bind the
purchaser are not mirrored by the obligations for meeting
timelines by the developer. The agreement does not reflect an
even bargain.”
27. So far as the present appeals are concerned, the quantum of
D delayed compensation has been enhanced by the builder themselves,
along with provision for enhancement with respect to the delay in payment
if made by the allottee in taking possession. In such circumstances, we
do not think the National Commission ought to have had deviated from
the modified contractual terms contained in the communication dated
26th March 2009 and replace the said terms with 6% interest per annum
E
from July 2013 till the date of fresh offer of possession was made. In
our opinion, on the point of payment of delayed compensation, the State
Commission’s view was the right view.
28. Now comes the question as to which date shall be treated to
be the date for fresh offer of possession. Both the fora have directed
F
the builder to issue fresh offer of possession as per the dates specified in
the order. The directions of the State and National Commissions were
not to operate with retrospective effect, from 10th June 2013. The
argument of the builder is that a possession offer letter was issued on
that date. This letter showed certain sum of balance and also included
G certain demands on account of cost of increase in apartment size area,
further EDC and IDC charges, stamp duty charges, etc. Some rebates
were also denied to the allottee on account of delay in payment of
instalment by nine days, which we have discussed in the preceding
paragraphs of this judgment. In an application dated 15th November 2018,
which was filed on 7th January 2019 before the State Commission, the
H
UTPAL TREHAN v. DLF HOME DEVELOPERS LTD. 479
[ANIRUDDHA BOSE, J.]
builder admitted their fault in not providing any compensation for delayed A
payment in the aforesaid letter of 10th June 2013 and prayed that the
complainant (i.e., the allottee) be directed to pay excess amount as
specified in the said application and take possession of the apartment.
The State Commission found that, as per the said application, the builders
had admitted wrong calculation in settling the credits in the account of
B
the allottee. In fact, the builders then had given the credit for a sum of
Rs.2,40,210/- and issued a cheque for the said sum, which the allottee
did not encash. Such conduct on the part of the allottee was justified as
the dispute was still pending before the State Commission. The State
Commission found deficiency of service on the part of the builder by
sending wrong statement of accounts along with the letter of possession C
and as per the finding of the State Commission, the allottee was deprived
in taking possession of the flat, which was offered, because of these
factors. The National Commission did not take a contrary view and in
fact came to a finding that the statement of account dated 10th June
2013 and demand on that basis was illegal. These findings arrived by the D
two fora were on appreciation of evidence and we do not find any
perversity in such finding. So, the letter of 10th June 2013 cannot be
treated as a valid offer letter.
29. (i) We, accordingly, hold the finding of the National Commission
as also the State Commission that the allottee would be required to pay
E
maintenance charges as erroneous and that part of the findings of the
two Commissions are set aside.
(ii) The entity to whom such charge is due has not raised any
claim. In such circumstances, direction to the allottee to pay maintenance
charges was not warranted as the entity entitled to receive such charges
F
is not a party to these proceedings. Such directions assume the character
of declaration of liability or obligation of the allottee in absence of the
admitted claimant, who had not brought any action or staked their claim
in any other manner through these proceedings. Such declaratory relief
cannot be given in vacuum.
G
(iii) We sustain the order of the National Commission as also the
State Commission that fresh offer of possession ought to be issued. We
extend the time for issuing such offer of possession by a period of eight
weeks from this date. Execution of Deed shall be effected within the
aforesaid period.
H
480 SUPREME COURT REPORTS [2022] 15 S.C.R.
A (iv) We modify the direction of National Commission relating to
payment of delayed compensation and while restoring the directions of
the State Commission, we direct that delayed compensation be paid at
the rate of Rs.10 per square feet per month for the entire period from
March 2011 till the date on which the fresh offer of possession is issued.
B (v) The delayed possession compensation shall be paid to the
allottee after adjusting the delayed compensation already paid. The early
payment rebate of Rs.95,136/- shall also be adjusted, as has been directed
by the National Commission. The said sum was mentioned in the
statement of account dated 10th June 2013.
C (vi) We retain the order as to costs to be paid to the allottee
quantified by the National Commission as Rs.50,000/-.
30. Both the appeals are disposed of in the above terms. We,
however, make it clear that in this judgment, we have addressed only the
two questions on which leave is granted. Rest of the findings or directions
D of the National Commission shall remain undisturbed.
31. Connected applications, if any, shall stand disposed of, without
any order as to costs.
Devika Gujral Appeals disposed of.
E (Assisted by : Mahendra Yadav, LCRA)
F
G
H
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "Apartment Buyers Agreement"Sign in to search