Supreme Court Holds Builder Liable To Compensate Residents Welfare Association For Not Providing Promised Amenities

The Supreme Court has directed a builder to pay a compensation of Rupees 60 lakhs to a Residents Welfare Association(RWA) for not fulfilling its promises regarding provision of amenities and facilities.The Court held the builder "Padmini Infrastructure Developers Ltd" liable to compensate Royale Garden RWA of Noida for not building a water softening plant, a second health club & a swimming pool, for failing to put in operation a fire fighting system and provide a Club House as promised in the agreement.The builder constructed the housing project with 282 apartments in Noida and offered them for sale. The purchasers were put in possession during the period from 1998- 2001. The purchasers of flats formed themselves into an association known as Royale Garden Residents Welfare Association and got it registered on 30.09.2003 under the Societies Registration Act, 1860. The Residents Welfare Association entered into an agreement on 15.11.2003 with the builder for taking over the maintenance of the apartment complex.Since the builder defaulted on the promises regarding amenities, the RWA approached the National Consumer Disputes Rederssal Commission(NCDRC). The NCDRC appointed an architect as a local commissioner to inspect the site and submit a report. The commissioner's report endorsed the grievances of the RWA regarding lack of completion of facilities.The NCDRC passed an order in January 2010 directing the builder to complete the systems and facilities in dispute within 10 weeks from the date of the order and imposed costs of Rs 25,000 on the builder.Aggrieved with the NCDRC order ,the builder approached the Supreme Court. The RWA also appealed to the Supreme Court against the rejection of certain other reliefs by the NCDRC. In 2010, the Supreme Court stayed the NCDRC order on condition that the builder deposits Rupees 60 lakhs with the SC Registry. Now, disposing of the appeals of both the builder and the RWA, the Court has directed the builder to pay the amount deposited with the Registry to the RWA. The Court rejected the builder's argument that the consumer complaint was barred by limitation. The Court also said that the findings made by the independent commissioner appointed by the NCDRC cannot be disputed.A bench comprising Justices Hemant Gupta and V Ramasubramanian observed :"In the light of the aforesaid findings by an independent architect appointed by the National Commission it is not open to the opposite party to create a façade as though all essential services and amenities were handed over in a fully functional state. If all the aforesaid services had been handed over in a fully functional state, the opposite party should have taken an acknowledgment in writing from the complainant. In the alternative, the opposite party should have insisted upon an appropriate provision in the Agreement dated 15.11.2003".However, as the possession of the common amenities was handed over to the housing society 18 years ago, the Court said that it might not be possible to compel the builder to make those facilities or systems fully operational "at this distance of time".The Court observed that the interests of justice will be met if the order of the National Commission is modified in such a manner that (i) the complainant association shall receive in full & final settlement and (ii) that the opposite party is directed to remove all building material stored in the club house in the basement of Tower Eden and hand over possession of the club house to the complainant.The operative portion of the Supreme Court order stated :"The complainant shall be entitled to all told monetary compensation in a sum of Rs 60 lakh, now lying in deposit with the Registry of this court, together with the interest accrued thereon, in lieu of the reliefs sought in prayer of the complaint. The opposite party (builder) shall, within two weeks, remove all building material stored by them in the club house in the basement of Tower Eden & hand over possession of the club house to the complainant".Case DetailsCase Title : The Managing Director (Shri Girish Batra) M/s Padmini Infrastructure Developers Ltd versus The General Secretary (Shri Amol Mahapatra) Royale Garden Residents Welfare AssociationCitation : LL 2021 SC 520Coram : Justice Hemant Gupta, Justice V RamasubramanianClick here to read/download the judgment

Supreme Court Holds Builder Liable To Compensate Residents Welfare Association For Not Providing Promised Amenities

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