Failure To Fulfill Contractual Obligations: NCDRC Holds Dhwani Associate Developers Liable For Deficiency In Service

The National Consumer Disputes Redressal Commission, presided by Mr. Subhash Chandra and Dr. Sadhna Shanker, held that failure to fulfill contractual obligations and delay in handing over possession amounts as deficiency in service. Brief Facts of the Case The complainants booked a flat with Dhwani Developers/builder in Hansa Complex, Borivali (East) for a total price of Rs. 80,35,270. They paid Rs. 42,35,000 and are ready to pay the balance upon possession. However, the builder failed to meet obligations under the Maharashtra Ownership Flats Act, 1963, and has not delivered possession despite assurances. The agreement specified the total price and payment terms, but despite receiving 50% of the payment, the builder has yet to hand over the flat. Aggrieved, the complainants filed a complaint before the State Commission of Maharashtra, which allowed the complaint. The State Commission directed the builder to execute a registered Sale Deed for the flat upon receiving the balance Rs. 38,00,000 from the complainants and pay Rs. 1,00,000 as compensation for mental agony and Rs. 10,000 as litigation costs; if the Sale Deed cannot be executed due to reasons beyond the builder's control, Rs. 42,35,270 already paid by the complainants must be refunded with 18% annual interest. Consequently, the builder filed an appeal before the National Commission. Contentions of the builder The builder argued that the State Commission proceeded ex-parte , relying only on the complainants' claim that the builder had been served. However, no evidence was provided to support this. It was argued that the State Commission's order violates established law, specifically in the case of Lakshmi Ram Bhuyan vs. Hari Prasad Bhuyan, (2003) 1 SCC 197 which states that a decree must include all issues, findings, reasons, claim details, and the relief granted. The builder also contended that all court judgments must be based on merits, regardless of whether the defendant participates in the proceedings. In support, the builder referenced a case where it was emphasized that judgments should not rely solely on the complainant's statements. The builder further claimed that the State Commission acted without proper evidence and that the complainants intentionally hid facts, including an injunction order from the Bombay High Court preventing the builder from transferring property interests. Observations by the National Commission The National Commission observed that the key issue was whether there was a deficiency in service by the builder. Despite being notified of the proceedings, the builder failed to appear without valid reasons, and the Commission found no grounds to claim the order was ex-parte. The builder had deposited Rs. 42,35,000 as per the Commission's order, but the complaint only sought possession and compensation, not a refund. It was observed that the builder's failure to fulfill contractual obligations and provide evidence for the delay in possession was deemed a deficiency in service. Citing DLF Homes Panchkula Pvt. Ltd. v. D.S. Dhanda, the Commission ruled the previous compensation of Rs. 1,00,000 for mental agony as unjustifiable. The National Commission modified the State Commission's order, directing the builder to hand over possession of the flat upon payment of the remaining amount by the complainants, pay compensation for the delay at 6% interest on Rs. 42,35,270, and adjust any amount deposited by the builder. The Rs. 1,00,000 compensation for mental agony was set aside, and the builder was also ordered to pay Rs. 10,000 in litigation costs. Case Title: Dhwani Associate Developers & Builders &Ors. Vs. Rajendra Talati & Anr. Case Number: F.A. No. 2332/2017 Click Here To Read/Download The Order

Failure To Fulfill Contractual Obligations: NCDRC Holds Dhwani Associate Developers Liable For Deficiency In Service

Ayushi Rani

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