M/S LAUREATE BUILDWELL PVT. LTD. versus CHARANJEET SINGH on 22 July 2021

1. The appellant (hereafter called “Laureate” or “the builder”) isaggrieved by an order of the National Consumer Dispute RedressalCommission[1] (hereafter “NCDRC”). The respondent (hereafter “thepurchaser”) had sought, through his complaint a direction against thebuilder, for refund of the consideration amount of Rs.1,93,70,883/-received by the latter, as consideration for sale of a flat along with interest@ 24% p.a. from the date different instalments were paid, as well ascompensation and costs.

2. The relevant facts are that one Ms. Madhabi Venkatraman(hereafter “the original allottee”) applied on 29.08.2012 for allotment ofa residential flat (No. 7013, (hereafter “the flat”) admeasuring 4545 sq.ft., in Nectarine Tower “PARX LAUREATE” at Sector- 108,Expressway, Noida. The flat was to be developed by the builder(Laureate). She paid the registration amount of Rs.7,00,000/-. On16.10.2012, an allotment letter was issued to the original allottee, for theflat after deposit of Rs.32,33,657/- out of the total sale consideration ofRs.2,47,29,405/-. According to the allotment letter, the possession of theflat was to be handed over within 36 months (from the date of allotmentletter) i.e., latest by 15.10.2015. The original allottee made payment tothe tune of Rs.1,55,89,329/-, for the first seven instalments as demandedby Laureate. On 16.02.2015, after noticing the slow pace of construction,the original allottee decided to sell the flat. The purchaser who was insearch of a residential flat was approached by her through a broker. Hewas assured that the possession of the flat would be delivered on time,and he agreed to purchase the flat and paid an amount of Rs.1,00,000/-as advance towards the total sale consideration of Rs.1,55,89,329/-. Thepurchaser and the original allottee agreed that the balance amount ofsale consideration would be paid on or before 15.10.2015 and furtherthat the purchaser would pay the outstanding instalments beyondRs.1,55,89,329/- directly after transfer of the flat to him. Demand letters A

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Afor two instalments (Nos. 8 & 9) were issued by Laureate and paymentto the tune of Rs.21, 68,694/- was made by the original allottee.

3. The purchaser alleged that possession was not delivered inOctober, 2015 as promised (in the allotment letter). He decided to waitfor the possession and not to make any payment towards the sale;Bhowever, the original allottee insisted upon the execution of an agreementto sell and demanded payment of instalments, which she had made tothe builder, stating that she could not wait any further and she wouldforfeit the earnest money and cancel the deal. The purchaser allegedthat he made enquiries from the officials of the builder, who assured thatthe possession would be delivered by June 2016. Therefore, the purchaser,Con 17.02.2016, entered into an agreement of sale with the original allottee,and paid an amount of Rs.1,85,00,000/-.

4. The original allottee on 02.04.2016, requested the builder totransfer the flat in favor of the respondent. The purchaser submitted anundertaking dated 01.04.2016 duly signed and executed by him, to theDbuilder, Laureate. Later, Laureate issued a letter dated 09.05.2016 tothe purchaser, confirming the payment of Rs.1,93,70,883/- towards thepurchase of the flat. Thereafter, the purchaser visited the site to acquainthimself with the extent of construction but he was denied entry to theconstruction site by the builder’s employees citing security reasons andEwas informed that the work was in progress and possession would bedelivered shortly. The purchaser alleges that he made telephonic inquiriesfrom the office of the builder regarding possession, but unavailingly,without any result. He claims to have visited the builder’s office in lastweek of January, 2017 and was informed that possession of the said flatcould not be delivered till the end of year 2017.F

5. After this, the purchaser sought for refund of the amount paid,from the builder. On 08.03.2017, a legal notice was issued to the builderasking for refund of the amount of Rs.1,93,70,883/- with interest @24% p.a. from the various dates of deposit, was sought by the purchaser,but in vain. He claims to have been shocked to receive the demandGletter for the 11th instalment for Rs.10,92,628/-. On refusal of the paymentof instalment, the officials of the builder threatened the purchaser ofcancellation and forfeiture of the amounts paid. It is in thesecircumstances, that the appellant approached the NCDRC, for directionto the builder to refund the entire sum of Rs.1,93,70,883/- with interestHat the rate of 24% from the respective dates when the instalments were paid to Laureate. In addition, Rs.5,00,000/- as compensation and Rs.2,00,000/- as litigation expenses were sought along with other costs.

6. The builder, Laureate denied the claim, stating that for the period28.03.2013 to January 2016, (i.e. 26 months), there was completeslowdown in the construction of the projects in all of NOIDA includingthe buildings in question, due to the order passed by National GreenTribunal (NGT) in OA/158/2013, and due to a notification issued by theMinistry of Environment, Forests and Climate Change. The originalallottee was aware of the orders of the NGT, and the builder had sentseveral reminders for payment towards the instalments and finally issueda notice on 17.10.2014 for cancellation of the Provisional Allotment ofFlat No. 7013. It was alleged that in view of Clause 13(7) of theagreement neither Ms. Madhabi Venkatraman, the original allottee northe purchaser-respondent who is endorsed by the original allottee wasentitled to any amounts for delay in construction. It was also alleged thaton 02.04.2016, the original allottee requested the builder to transfer flatNo. 7013 in favour of the purchaser. The purchaser furnished anundertaking on 01.04.2016 duly signed before the competent authority,which makes it clear that both the original allottee and the purchaserwere aware of the order of the NGT and the delay in construction werebeyond the control of the purchaser. Therefore, their right to claimcompensation is construed to be waived in terms of Clause 13.

7. The builder further alleged that on commencement of 18th floorand 20th floor roof slab, the 11th and 12th instalments were demandedfrom the Complainant and the same was not paid. Therefore, the builderhad a right to cancel the allotment. It is only on account of the restrictiveorder dated 28.10.2013 passed by NGT on any construction within theradius of 10 kilometres from Okhla Bird Sanctuary, that the builder couldnot complete the project as the said project comes within the radius of10 kilometres. In view of clause 13(5), the builder was entitled forextension of time for offer of possession at such premises on account offorce majeure conditions. Therefore, it is not liable to pay anycompensation.

8. The NCDRC, after considering the depositions of the parties,through affidavits, documentary evidence and the submissions of parties,noticed that the demand letter for the 11th instalment was dated24.03.2017, whereas the promised date of delivery was 15.10.2015. Thatsaid letter stated that the construction stage ‘on commencement of 18th A

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Afloor roof slab’ of the tower had been achieved and therefore the 11thinstalment was demanded to be paid. This showed that even as on24.03.2017, the construction of the said tower was incomplete. Thecommission considered that Receipt No. 306 dated 01.03.2016 showsthat the original allottee had paid an amount of Rs.5,29,000/- towardspenal interest charged by the Developer at the rate of 24% per annum.BThe NCDRC rejected the plea that the original allottee was a defaulter.It thereafter allowed the complaint, reasoning as follows:

“20. We find it a fit case to place reliance on the judgementof the Hon’ble Supreme Court in Kolkata West InternationalCity Pvt. Ltd. Vs. Devasis Rudra, II (2019) CPJ 29 (SC),Cwherein the Hon’ble Apex Court has clearly laid down that aflat purchaser cannot be made to wait indefinitely for seekingpossession. Even in the instant case, though the promised dateof delivery was way back in the year 2015, even as on date,the tower is far from completion.

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21. The Learned Counsel for the Complainant relied on thedecision of this Commission dated 11.01.2019 in ManmeetSingh & Anr. Vs. Unitech Hi-Tech Developers Ltd. & Ors.(Consumer Complaint No. 1285 of 2017), wherein thisCommission has allowed refund of the principal amount withEinterest @ 10% p.a.

22. For all the aforenoted reasons and the principal laid downby the Hon’ble Supreme Court in Kolkata West InternationalCity Pvt. Ltd. (Supra) we are of the considered view that theComplaint be allowed in part and we direct the Developer toFrefund the amount deposited with the developer in respect ofsubject flat No. 7013 with interest @ 10% p.a. from therespective dates of deposit till the date of realisation togetherwith the cost of ¹ 25,000.”

Arguments of the parties

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G9. It is argued by Mr. Jayanth Mithras, learned senior counsel onbehalf of the builder that the relief granted by NCDRC is unwarranted.Highlighting that the entire project had come to a standstill on account ofan interim order by the NGT, the learned senior counsel stressed thatthese facts were within the knowledge of the original allottee as well asthe purchaser. When they decided to purchase it in 2015, it was decidedH

that the respondent would purchase the flat and step into the shoes ofthe original allottee. Learned senior counsel argued that given thesecircumstances, the respondent, as a prudent purchaser, could not havereasonably expected the construction to be completed till the interimorders were vacated and some time was allowed for the construction tobe completed. Clearly, the purchaser was only an investor and was notinterested in residing in the flat.

10. Learned senior counsel submitted that barely a year after thetransaction of stepping into the shoes of the original allottee – whichwas endorsed by the builder, the purchaser made an unreasonable demandfor the refund of the entire amount. At that point in time, the interimorder of the NGT had been vacated. Quite naturally, therefore, theconstruction had started and the builder made the demand on 23.04.2017towards subsequent instalments which were not paid. Although thepurchaser sent a legal notice prior to these demands, the fact remainedthat so long as he assumed responsibility as an allottee, he could not shyaway from fulfilling the demand towards the instalments.

11. Learned senior counsel argued that the purchaser could notclaim the equities in the same manner that an original allottee could. Inthe present case, the original allottee had not paid the instalments in timeand was constrained to pay penal interest – a fact noted by the NCDRC.In these circumstances, there were no equities compelling the NCDRCto grant any relief over and above a refund of compensation much lessinterest @ 10% from the period the deposits were made by the originalallottee.

12. Learned senior counsel submits that since the complainantwas not the original allottee but a subsequent purchaser, he could notclaim any interest. He relied upon two rulings of this Court in HUDA v.Raje Ram[2]and the recent judgment of this Court in Wing CommanderArifur Rahman Khan and Anr. v. DLF Southern Homes Pvt. Ltd.[3]. Itis submitted that in both these cases, this Court had categorically ruledthat when the allottee in a housing project transfers his or her rights infavour of another, such a third party cannot claim equities to the sameextent as the original allottee, especially as regards a claim for interest.It was submitted by the learned senior counsel that there is a soundpublic policy rationale in support of such a rule which is that a subsequent 2 2008 (17) SCC 407

3 2020 SCC Online 667 (SC)

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Apurchaser is deemed to be aware of the nature of construction and thedelay which occurred till the time he or she steps into the shoes of theallottee. The NCDRC overlooked these binding rulings and directedpayment of interest for the entire period and clearly the respondentpurchaser was not entitled to any interest at all.

B13. Mr. M.L. Lahoty, learned counsel for the respondent urgedthis Court not to interfere with the findings and directions of the NCDRC.He highlighted that even if they were notified about the transfer by theoriginal allottee in respect of the respondent, the builder had made demandstowards penal interest, for various periods. A total amount of ¹ 5.9 lakhswas in fact paid during the period 01.03.2016 to 18.04.2016. The builderCwas made aware of the agreement to sell when its endorsement withrespect to the transfer was sought. Further, it was only after receivingthe amounts towards the so-called penal interest that the endorsementletter was ultimately issued on 09.05.2016 by the builder. This clearlyconfirmed Rs.1,93,70,883/- was paid towards the flat. This endorsementDletter also confirmed that the respondent purchaser would be entitled tothe delivery of the flat.

14. It is submitted that the purchaser had entered into anunderstanding and paid the amounts towards the previous instalments aswell as settled the later penal interest component to the original allotteeEand also paid penal interest upto October 2016. In these circumstances,it was not unreasonable for him to expect that project would be completeand the flat would be handed over at least in the first part of 2017.However, upon visiting the site and noticing that there was practically noprogress, the respondent/purchaser was constrained to move the NCDRCfor the relief of direction of refunding the entire amount.F

15. Mr. Lahoty pointed to the findings and observations of theNCDRC which had noticed the facts that although the NGT’s interimorder had subsisted for a while, and the builder had taken shelter underit to say that construction could not take place, the record indicated thatthe builder had sought for instalments from the original allottee, includingGdemanding penal interest. Given these facts, there were no equities infavour of the builder; it was not open to it to claim that force majeureconditions operated and prevented it from going ahead with theconstruction.

16. It was submitted that upon the endorsement by the builder ofHall the transactions, and its acknowledgment, the purchaser had become

entitled to seek delivery. There was no impediment in the purchaserclaiming any kind of relief. Mr. Lahoty submitted that if for instance,there were to be any defect or deficiency in service, the purchaser couldnot be discriminated against and an application or a plaint in that regardcannot be dismissed as not maintainable. Likewise, the mere fact that asubsequent purchaser steps into the shoes of an original allottee whomight have at an earlier point of time sought allotment but because ofthe delay in the construction, being unable to withstand economicpressures withdrew, does not mean that the builder’s default could beglossed over. Learned counsel urged that there is no rule or principle tosupport the judgment in Raje Ram (supra) or Wing Commander ArifurRahman Khan and Anr. (supra) to say that subsequent purchasersshould never be given the relief of interest on refunds. It was submittedthat the refusal of the Court to grant relief have to be seen in the light ofthe peculiar circumstances of those cases.

Analysis and Conclusions:

17. The allotment letter dated 16.10.2012 assured the originalallottee that the possession of the flat would be handed over within 36months i.e. on or before 15.10.2015. The original allotee made paymentto the tune of Rs.1,55,89,329/-, towards the first seven instalments asand when demanded. Apparently, the allottee due to her own compulsionscould not continue to wait indefinitely for delivery of the flat, havingregard to the slow pace of construction. She therefore felt compelled tosell the flat. It was then that the purchaser stepped in, and an agreementto sell was executed between the parties on 17.02.2016. The originalallottee thereafter approached the builder, informing it that the purchaserhad stepped into her shoes and would continue with the obligations, andwas therefore entitled to possession. Significantly, the builder endorsedand even required the purchaser to execute the letter of undertaking,which he did. With this development, the builder acknowledged that therights and entitlements of the original allottee relation to the flat wereassumed by the purchaser, and signified its obligations, correspondinglyto the purchaser, as the consumer.

18. In the meanwhile, there was a slowdown in construction,apparently, on account of orders made by NGT. The builder alleged thatthe slowdown in construction was due to the NGT’s interim orders.However, what transpired was that on 28.10.2013, the NGT imposed A

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Acertain restrictions within 10 km radius of the Okhla Bird Sanctuary.The application before the NGT was disposed on 03.04.2014.Consequently, there were no directions after that date. A reviewapplication was filed before the NGT which remained pending for sometime; however, even at that stage there were no interim orders requiringstoppage of construction. On 19.08.2015 the Ministry of EnvironmentBand Forests issued a notification. The appellant is unclear as to theeffect of this notification; apparently, it did not impede construction; thenotification was challenged. It is only on 05.07.2016, on account of anapplication preferred by an occupant of an adjoining area that the NGTdirected the builder not to carry on with the construction. This, the builderCinforms in its appeal, was finally disposed of in January 2016.

19. The facts set out in the preceding paragraph demonstrate thaton the one hand the builder/appellant is not categorical with respect tothe existence of interim orders enjoining it not to construct further. Rather,it appears that there was no construction of the project for about sixDmonths. However, despite this position, it continued to demand andreceived instalments. The purchaser entered the scene in 2016, waitedfor some time and demanded refund of the entire amount with interestfrom the dates that deposits were made. After receiving notice, thebuilder demanded further instalments. It was in this background that theEpurchaser approached the NCDRC successfully with the claim for refund.The claim for interest was allowed to the extent of 10% on the entireamounts deposited from the respective dates of deposits.

20. The principal argument of the builder is the rights of a purchaserare not the same as an original allottee. The builder appellant cites RajeFRam and Arifur Rahman Khan (supra).In the first decision Raje Ram,this Court declined to grant interest on a refund claim made by asubsequent purchaser. The original allottee did not continue with theallotment; the statutory authority/developer HUDA re-allotted the plot.The re-allottee then approached the consumer forum which directedrefund with interest. This court was of the opinion that when theGsubsequent purchaser, i.e. the re-allottee stepped into the shoes of theoriginal allottee, he was aware of the delay in handing over the possessionwhich had occurred and therefore could no longer claim the time of thedelay. In Arifur Rahman Khan (supra) several allottees approachedthe Court. This Court did not grant relief to the subsequent purchasersHwho stepped into the shoes of the original allottees, citing Raje Ram.

21. The relevant discussion in Raje Ram is as follows:

“14. The appellants challenged the said orders of the StateCommission contending that no interest was payable. TheNational Consumer Disputes Redressal Commission by its non-speaking orders dated 27-8-2002, 30-9-2002 and 27-8-2002,disposed of the said revisions filed by the DevelopmentAuthority, in terms of its earlier decision in HUDA v. DarshKumar [ RP No. 1197 of 1998 decided on 31-8-2001 (NC)]by merely observing that it had upheld the award of interestup to 18% per annum in similar circumstances. The NationalCommission did not refer to or consider the facts of thesecases. The said orders are challenged in these appeals byspecial leave. The common issue in all these cases is whetherinterest could have been awarded against the appellant, andif so whether the rate of interest is excessive.

15. The decision of the National Commission in DarshKumar [ RP No. 1197 of 1998 decided on 31-8-2001 (NC)] ,followed in the impugned orders, did not find favour of thisCourt in HUDA v. Darsh Kumar [(2005) 9 SCC 449] . ThisCourt observed that (at SCC p. 451, para 7) where possessionis given at the old rate, the party has got the benefit ofescalation in price of land, and therefore, there cannot andshould not be award of interest on the amounts paid by theallottee on the ground of delay in allotment. On the specialfacts of that case, this Court however awarded compensationfor harassment/mental agony.

16. The respondents in the three appeals are not the originalallottees. They are re-allottees to whom reallotment was madeby the appellant in the years 1994, 1997 and 1996respectively. They were aware, when the plots were reallottedto them, that there was delay (either in forming the layoutitself or delay in delivering the allotted plot on account ofencroachment, etc). In spite of it, they took reallotment. Theircases cannot be compared to the cases of the original allotteeswho were made to wait for a decade or more for delivery andthus put to mental agony and harassment. They were awarethat time for performance was not stipulated as the essenceof the contract and the original allottees had accepted thedelay.”

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A22. In Arifur Rahman Khan, the court observed as follows:

“43. Similarly, the three appellants who have transferred theirtitle, right and interest in the apartments would not be entitledto the benefit of the present order since they have sold theirinterest in the apartments to third parties. The writtensubmissions which have been filed before this Court indicatethat “the two buyers stepped into the shoes of the first buyers”as a result of the assignment of rights and liabilities by thefirst buyer in favour of the second buyer. In HUDA v. RajeRam [HUDA v. Raje Ram, (2008) 17 SCC 407 : (2009) 5 SCC(Civ) 889] , this Court while holding that a claim ofcompensation for delayed possession by subsequenttransferees is unsustainable, observed that: (SCC p. 410, para16)

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“16. The respondents in the three appeals are not theoriginal allottees. They are re-allottees to whom reallotmentDwas made by the appellant in the years 1994, 1997 and1996 respectively. They were aware, when the plots werereallotted to them, that there was delay (either in formingthe layout itself or delay in delivering the allotted plot onaccount of encroachment, etc.). In spite of it, they tookreallotment. Their cases cannot be compared to the casesEof the original allottees who were made to wait for a decadeor more for delivery and thus put to mental agony andharassment. They were aware that time for performancewas not stipulated as the essence of the contract and theoriginal allottees had accepted the delay.”F

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Even if the three appellants who had transferred their interestin the apartments had continued to agitate on the issue ofdelay of possession, we are not inclined to accept thesubmission that the subsequent transferees can step into theshoes of the original buyer for the purpose of benefiting fromthis order. The subsequent transferees in spite of being awareof the delay in delivery of possession the flats, had purchasedthe interest in the apartments from the original buyers. Further,it cannot be said that the subsequent transferees suffered anyagony and harassment comparable to that of the first buyers,as a result of the delay in the delivery of possession in orderto be entitled to compensation.”

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23. The builder does not deny that upon issuance of theendorsement letter, the purchaser not only stepped into the shoes of theoriginal allottee but also became entitled to receive possession of theflat. There is no denial that the purchaser fulfils the description of thecomplainant/ consumer and is entitled to move any forum under theConsumer Protection Act for any deficiency in service. The questionthen is whether a subsequent purchaser is not entitled to similar treatmentas the original allottee, and can be denied relief which otherwise theoriginal allottee would have been entitled to, had she or he continuedwith the arrangement. An individual such as the original allottee, entersinto an agreement to purchase the flat in an on-going project wheredelivery is promised. The terms of the agreement as well as theassurance by the builder are that the flat would be made available withina time-frame. It is commonplace that in a large number of suchtransactions, allottees are not able to finance the flat but seek advancesand funds from banks or financial institutions, to which they mortgagethe property. The mortgage pay-outs start initially after an agreed period,commencing in a span of about 15 to 24 months after the agreement.This would mean that in most cases, allottees start repaying the bank orfinancial institutions with instalments (mostly equated monthlyinstalments) towards the principal and the interest spread over a periodof time, even before the flats are ready. If these facts are taken intoconsideration, prolongation of the project would involve serious economicrepercussions upon such original allottees who are on the one handcompelled to pay instalments and, in addition, quite often -if she or he isin want of a house -also pay monthly rents. Such burdens becomealmost intolerable. It is at this point that an indefinite wait is impossibleand allottees prefer to find purchasers who might step into their shoes.That such purchasers take over the obligations of the original allottee –either to pay the balance instalments or to wait for sometime, would notper se exclude them from the description of a consumer. All that thenhappens is that the consumer forum or commission – or even courtshave to examine the relative equities having regard to the time frame ineach case.

24. In a larger five judge bench ruling in Economic TransportOrganization v. Charan Spinning Mills (P) Ltd[4], the question waswhether an insurer, who honours its contract, and pays the insured the AB

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Aagreed money, in the event of an insurable incident such as an accident,can maintain a consumer complaint against the carrier, who is responsiblefor the accident. This court held that such complaints are not barred:

“29. In all three types of subrogation, the insurer can sue thewrongdoer in the name of the assured. This means that theinsurer requests the assured to file the suit/complaint and hasthe option of joining as co-plaintiff. Alternatively, the insurercan obtain a special power of attorney from the assured andthen to sue the wrongdoer in the name of the assured as hisattorney.

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37. Whether the document executed by the assured in favourof the insurer is a subrogation simpliciter, or a subrogation-cum-assignment is relevant only in a dispute between theassured and the insurer. It may not be relevant for decidingthe maintainability of a complaint under the Act. If thecomplaint is filed by the assured (who is the consumer), or bythe assured represented by the insurer as its attorney holder,or by the assured and the insurer jointly as complainants, thecomplaint will be maintainable, if the presence of insurer isexplained as being a subrogee. Whether the amount claimedis the total loss or only the amount for which the claim wassettled would make no difference for the maintainability ofthe complaint, so long as the consumer is the complainant(either personally or represented by its attorney-holder) or isa co-complainant along with his subrogee.

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38. On the other hand, if the assured (who is the consumer)is not the complainant, and the insurer alone files thecomplaint in its own name, the complaint will not bemaintainable, as the insurer is not a “consumer”, nor a personwho answers the definition of “complainant” under the Act.The fact that it seeks to recover from the wrongdoer (serviceprovider) only the amount paid to the assured and not anyamount in excess of what was paid to the assured will alsonot make any difference, if the assured-consignor is not thecomplainant or co-complainant. The complaint will not bemaintainable unless the requirements of the Act are fulfilled.The remedy under the Act being summary in nature, once the G

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consumer is the complainant or is a co-complainant, it willnot be necessary for the Consumer Forum to probe the exactnature of relationship between the consumer (assured) andthe insurer, in a complaint against the service provider.

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40. If in a summary proceedings by a consumer against aservice provider, the insurer is added as a co-complainant orif the insurer represents the consumer as a power-of-attorney,there is no need to examine the nature of rights inter se betweenthe consumer and his insurer. When the complaint is by theconsignor-consumer, with or without the insurer as a co-complainant, the service provider cannot require theConsumer Forum to consider the nature of relationshipbetween the assured and the insurer or the nature and truepurport of the document produced as a letter of subrogation.A wrongdoer cannot side-track the issue before the ConsumerForum. Once the “consumer”, that is the assured, is thecomplainant, the complaint will be maintainable subject tofulfilment of the requirements of the Act.”

25. In another decision, Canara Bank v. United India InsuranceCo. Ltd.[5] the issue which this court had to consider was whether theinsurer could repudiate liability in respect of a fire which destroyed farmproduce kept in a cold storage, when the farmers had no privity with theinsurer, but with the cold storage, and who availed credit on the securityof the crop. The court held as follows:

“28. Taking the issue of privity of contract, we are of theconsidered view that as far as the Act is concerned, it is notnecessary that there should be privity of contract betweenthe Insurance Company and the claimants. The definition of“consumer” under Section 2(d) quoted hereinabove is in twoparts. Sub-clause (i) of Section 2(1)(d) deals with a personwho buys any goods and includes any user of such goodsother than the person who buys such goods as long as theuse is made with the approval of such person. Therefore, thedefinition of consumer even in the first part not only includesthe person who has purchased but includes any user of thegoods so long as such user is made with the approval of the 5 (2020) 3 SCC 455

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Aperson who has purchased the goods. As far as the definitionof “consumer” in relation to hiring or availing of services isconcerned, the definition, in our view, is much wider. In thispart of the section, consumer includes not only the personwho has hired or availed of the services but also includesany beneficiary of such services. Therefore, an insured couldBbe a person who hires or avails of the services of the InsuranceCompany but there could be many other persons who couldbe the beneficiaries of the services. It is not necessary thatthose beneficiaries should be parties to the contract ofinsurance. They are the consumers not because they areCparties to the contract of insurance but because they are thebeneficiaries of the policy taken out by the insured.

29. The definition of “consumer” under the Act is very wideand it includes beneficiaries who can take benefit of the insuranceavailed by the insured. As far as the present case is concerned,Dunder the tripartite agreement entered between the Bank, the coldstore and the farmers, the stock of the farmers was hypothecated assecurity with the Bank and the Bank had insisted that the said stockshould be insured with a view to safeguard its interest..”

26. If one also considers the broad objective of the ConsumerEProtection Act, which is to provide for better protection of the interestsof consumers and for that purpose, provide for the establishment ofConsumer Councils and other authorities for the settlement of consumerdisputes and for matters connected therewith, as evident from theStatement of Objects and Reasons of the Act. The Statement furtherseeks inter alia to promote and protect the rights of consumers suchFas—

“(a) The right to be protected against marketing of goodswhich are hazardous to life and property; (b) the right to be informed about the quality, quantity, potency,Gpurity, standard and price of goods to protect the consumeragainst unfair trade practices;

(c) the right to be assured, wherever possible, access to varietyof goods at competitive prices; (d) the right to be heard and to be assured that consumers’Hinterests will receive due consideration at appropriate forums;

(e) the right to seek redressal against unfair trade practiceor unscrupulous exploitation of consumers; and (f) right to consumer education.”

27. In Lucknow Development Authority v. M.K. Gupta[6] thisCourt held:

“The importance of the Act lies in promoting welfare of thesociety by enabling the consumer to participate directly inthe market economy. It attempts to remove the helplessness ofa consumer which he faces against powerful business,described as, ‘a network of rackets’ or a society in which,‘producers have secured power’ to ‘rob the rest’ and the mightof public bodies which are degenerating into storehouses ofinaction where papers do not move from one desk to anotheras a matter of duty and responsibility but for extraneousconsideration leaving the common man helpless, bewilderedand shocked.”

28. It was further held that

“The Act thus aims to protect the economic interest of aconsumer as understood in commercial sense as a purchaserof goods and in the larger sense of user of services. … It is amilestone in history of socio-economic legislation and isdirected towards achieving public benefit.”

29. This court has further observed in State of Karnataka v.Vishwabharathi House Building Coop. Society,[7] that (the) “provisionsof the said Act are required to be interpreted as broadly as possible.It has jurisdiction to entertain a complaint despite the fact that otherforums/courts would also have jurisdiction to adjudicate upon thelis”[8]

30. It is therefore evident that the Consumer Protection Act, 1986was conceived as a legislation to address complaints of consumers (anexpression defined and interpreted widely) and provide a forum for theirquick redressal, and, furthermore, wherever third parties have claimedrelief, technicalities have been brushed aside consistently, by this court.

6 (1994) 1 SCC 243

7 (2003) 2 SCC 412

8 This court also relied on Fair Air Engineers (P) Ltd. v. N.K. Modi [(1996) 6 SCC 385]and Satpal Mohindra v. Surindra Timber Stores [(1999) 5 SCC 696

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AThus, even after an original consumer is indemnified for a fire accident,the insurer can maintain a complaint against the carrier/service provider,and claim damages (of course along with the insured party). Likewise,absence of privity of contract is not a bar for maintaining a complaintagainst a service provider, by a third party who suffers an incident, whichis otherwise covered by an agreement. This court has also ruled, recently[9]Bthat proceedings initiated by complainants and resultant actions includingof the NCDRC are fully saved by provisions of the Real EstateRegulatory Authority Act, 2019.31. In view of these considerations, this court is of the opinionthat the per se bar to the relief of interest on refund, enunciated by theCdecision in Raje Ram (supra) which was applied in Wg. CommanderArifur Rehman (supra) cannot be considered good law. The natureand extent of relief, to which a subsequent purchaser can be entitled to,would be fact dependent. However, it cannot be said that a subsequentpurchaser who steps into the shoes of an original allottee of a housingproject in which the builder has not honoured its commitment to deliverDthe flat within a stipulated time, cannot expect any – even reasonabletime, for the performance of the builder’s obligation. Such a conclusionwould be arbitrary, given that there may be a large number- possiblythousands of flat buyers, waiting for their promised flats or residences;they surely would be entitled to all reliefs under the Act. In such case, a Epurchaser who no doubt enters the picture later surely belongs to thesame class. Further, the purchaser agrees to buy the flat with a reasonableexpectation that delivery of possession would be in accordance withinthe bounds of the delayed timeline that he has knowledge of, at the timeof purchase of the flat. Therefore, in the event the purchaser claimsrefund, on an assessment that he too can (like the original allottee) noFlonger wait, and face intolerable burdens, the equities would have to bemoulded. It would no doubt be fair to assume that the purchaser hadknowledge of the delay. However, to attribute knowledge that such delaywould continue indefinitely, based on an a priori assumption, would notbe justified. The equities, in the opinion of this court, can properly beGmoulded by directing refund of the principal amounts, with interest @9% per annum from the date the builder acquired knowledge of thetransfer, or acknowledged it.

32. In the present case, there is material on the record suggestiveof the circumstance that even as on the date of presentation of theH9 Imperia Structures Ltd. v. Anil Patni, (2020) 10 SCC 783

present appeal, the occupancy certificate was not forthcoming. In thesecircumstances, given that the purchaser/respondent had stepped intothe shoes of the original allottee, and intimated Laureate about this factin April 2016, the interests of justice demand that interest at least fromthat date should be granted, in favour of the respondent. The directionsof the NCDRC are accordingly modified in the above terms.

33. The impugned order of the NCDRC is modified in the aboveterms; the appeal is partly allowed. There shall be no order on costs.

Devika Gujral

Appeal partly allowed.

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