Consumer Courts Can Direct Refund & Compensation To Buyers For Not Delivering Flat: SC

New Delhi: The Supreme Court (SC) has said that the power to direct refund and to compensate a consumer for the deficiency in not delivering the apartment as per terms of the agreement is within the jurisdiction of the consumer courts.

On April 8, 2022, a three-judge bench headed by Justice U U Lalit asserted that under Section 14 of the Consumer Protection Act, if the commission found that any allegations contained in the complaint about the services are proved, it shall issue an order to the concerned party directing him to return to the complainant the price or as the case may be, the charges paid by the complainant.

"If a consumer prays for a refund of the amount, without an alternative prayer, the Commission will recognize such a right and grant it, of course, subject to the merits of the case. If a consumer seeks alternative reliefs, the Commission will consider the matter in the facts and circumstances of the case and will pass appropriate orders as justice demands," IANS quoted the bench as saying.

The apex court made these observations while hearing an appeal by Experion Developers Private Limited, which was directed by the Commission to refund an amount of Rs 2,06,41,379 with interest at 9 percent per annum to the consumer for its failure to deliver possession of the apartment within the time stipulated as per the apartment buyers agreement.

Dismissing the appeal filed by the developer, the bench noted that the consumer, in the present case, prayed for the solitary relief for return of the amount paid towards the purchase of the apartment without a prayer for alternate relief.

"We are of the opinion that the Commission has correctly exercised its power and jurisdiction in passing the above directions for a refund of the amount with interest," said Justice Narasimha.

The appeal filed by the consumer said that the payment of interest must be from the date of payment of each installment and the rate of interest must be 24 percent per annum.

"We are of the opinion that for the interest payable on the amount deposited to be restitutionary and also compensatory, interest has to be paid from the date of the deposit of the amounts. The Commission in the order impugned has granted interest from the date of the last deposit. We find that this does not amount to restitution," noted the bench.

The bench said the interest on the refund shall be payable from the dates of deposit.

"Therefore, the appeal filed by the purchaser deserves to be partly allowed. The interests shall be payable from the dates of such deposits. At the same time, we are of the opinion that the interest of 9 percent granted by the Commission is fair and just," it noted.

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