NCDRC Holds Sahaj Ankur Realtors Liable For Failing To Provide Promised Flat Or Alternative Accommodation; Awards ₹3.91 Crore Compensation

The National Consumer Disputes Redressal Commission (NCDRC) bench of Justice Sudip Ahluwalia (Presiding Member) and Dr. Sadhna Shanker (Member) held Sahaj Ankur Realtors liable for deficiency in service for failing to provide the promised redeveloped flat or alternative accommodation within the agreed timeframe. The Commission partly al-lowed the complaint and directed the developer to pay total compensation of ₹3,91,72,189.50 along with interest. Brief Facts The complainants were tenants of flats in Madhav Baug, Andheri (East), Mumbai. On 20 September 2013, they entered into a registered Agreement for Permanent Alternate Ac-commodation with Sahaj Ankur Realtors (Opposite Party No.1) in relation to redevelop-ment of the property. Under the agreement, the developer undertook to allot Flat No. 801 admeasuring 700 sq. ft. carpet area in B Wing along with podium parking, on ownership basis, within 24 months from issuance of the Commencement Certificate, with a six-month grace period. Of the total area, 650 sq. ft. was to be provided free of cost, while the complainants agreed to purchase an additional 50 sq. ft. for ₹11,40,000, of which ₹6,00,000 was paid upfront. The developer also undertook to furnish a performance bank guarantee, pay dislocation compensation, and pay monthly transit rent. Due to delays in commencement and completion of the project and failure to obtain ap-provals, a Deed of Indemnity-cum-Undertaking dated 10 January 2015 was executed, pur-suant to which the complainants handed over vacant possession on 12 January 2015. Under the deed, the developer agreed to obtain approval for Flat No. 801 within six months. Fail-ing this, it undertook to allot two alternative flats bearing Nos. 301 and 302, free of cost, with allotment letters held in escrow. If neither the agreed flat nor the alternative flats were provided, the developer was required to pay the market value of 1,317 sq. ft. carpet area along with 25% additional compensation. The complainants alleged that the developer failed to obtain approvals within the stipulated period, stopped paying transit rent, failed to discharge other contractual obligations, and showed Flat No. 801 as a refuge area in plans furnished in 2018. It was further admitted that the alternative flats held under the indemnity arrangement were sold to a third party without the complainants' consent. Aggrieved, the complainants approached the NCDRC seeking allotment of the alternative flats or monetary compensation along with other re-liefs. Contentions of Opposite Parties O.P. No.1 contended that the complainants were not “consumers” under the Consumer Protection Act, arguing that the dispute arose out of a landlord–tenant relationship con-cerning permanent alternate accommodation. The developer also argued that the Deed of Indemnity-cum-Undertaking was unenforceable as it was unregistered and allegedly creat-ed rights in immovable property, and therefore could not be relied upon. Opposite Party Nos. 2 and 3 contended that they had no privity of contract with the com-plainants and were therefore not liable. Commission's Observations The Commission rejected the objection to maintainability and held that the Permanent Al-ternate Accommodation Agreement and the subsequent Deed of Indemnity-cum-Undertaking were intrinsically connected with the redevelopment service undertaken by the developer. The complainants, having surrendered possession and paid consideration for additional area, fell within the definition of “consumer”. It noted that execution of the Deed of Indemnity-cum-Undertaking itself constituted an admission of delay and non-compliance with the original agreement. The developer had expressly undertaken to obtain approval for Flat No. 801 within a stipulated period but failed to do so. The Commission further observed that plans furnished in 2018 depicted Flat No. 801 as a refuge area, reinforcing the complainants' grievance that the contractual promise had not been fulfilled. Most significantly, the alternative flats (Nos. 301 and 302), which formed the security under the indemnity arrangement, were admittedly sold to a third party without the complainants' consent. This constituted a clear breach of the undertaking. Rejecting the objection regarding non-registration of the indemnity deed, the Commission held that the complainants were seeking compensation for deficiency in service rather than specific performance of transfer of immovable property. The document was therefore ad-missible to establish the developer's obligations and the agreed consequence of non-performance. In view of the admitted sale of the alternative flats and the prolonged delay, the Commis-sion held that directing possession at such a belated stage would not be appropriate. The equitable remedy was monetary compensation equivalent to the value of the flats the com-plainants were entitled to receive. The Commission held that compensation should be calculated based on the...

NCDRC Holds Sahaj Ankur Realtors Liable For Failing To Provide Promised Flat Or Alternative Accommodation; Awards ₹3.91 Crore Compensation

Muhammed Razik

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