UTPAL TREHAN versus DLF HOME DEVELOPERS LTD. on 11 July 2022

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[2022] 15 S.C.R. 458

SUPREME COURT REPORTS

[2022] 15 S.C.R.

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UTPAL TREHAN

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DLF HOME DEVELOPERS LTD.

(Civil Appeal No. 4690 of 2022)

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JULY 11, 2022

[DINESH MAHESHWARI AND ANIRUDDHA BOSE, JJ.]

Consumer Protection Act, 1860: Apartment Buyers’ Agreement– Delayed Possession Compensation – Builder under obligation toCdeliver the possession of the certain flats to the allottee – Handingover possession delayed since builder could not get certainregulatory clearance – Later, builder raised additional demandsunder different heads, which as per the allottee added upto Rs 9lakhs (approx) – As per the allottee, they had cleared the requisiteinstallments – The allottee did not take the possession in protest ofDadditional demand – The allottee was further aggrieved by the factthat he had been denied certain payment related benefits on beingsoffered possession of the flat – Per contra the builder supportedsuch denial on the ground that there was default in payment by theallottee within due date of the installments – The allottee supportedEthe fact of delayed payment on the premise that they did not receivenotice of such demand on 29 December 2011, as alleged by builder– Further, dispute also revolved around payment of maintenancecharges, as such charges, as per builder, were due to be paid byallottee – Thereafter, allottee took up the entire matter before theState Consumer Disputes Redressal Commission, which held in favourFof the allottee except on the question of maintenance charges –Aggrieved on the question of the maintenance charges, the allotteepreferred appeal before National Commission – National Commissionpartly allowed the appeal while making modification in the directionof the State Commission as to the delayed compensation – AggrievedGby such modification, the allottee filed instanat appeals – Held:The allottee were justified in not taking of possession since thedemand of the sum of 9 lakhs was illegal, as per facts, and suchpossession was conditional on payment of the aforesaid amount –Upon considering the entire material on record the builder failed toestablish the fact that it was on 29 December 2011 that the notice H

for the payment of the installment was issued by them – The builderdid not bring any material on record to show that it was the builderwho was carrying out maintenance work which could have broughtthem within the definition of “maintenance agency” under ApartmentBuyers’ Agreement - The entity entitled to such payment was notimpleaded as party to the proceeding – The builder, since unable toget requisite regulatory clearance modified the terms of agreementthereby amending the starting date of computing delayed paymentof compensation hence National Commission erred in makingmodification in such date and State Commission was right in itsdirection as to date of commencement of the payment of delayedcompensation.

Disposing of the appeals, the Court

Conclusion

Disposing of the appeals, the Court

HELD: 1. The definition of Maintenance Agency means“DHDL (the builder) or association of allottees or such otheragency but the conjunction “or” as has been applied in thedefinition clause ought to mean in the alternative and thisdefinition cannot be construed to infer that even after handingover the maintenance work to an association, the builder shallcontinue to remain as a maintenance agency entitled to collectmaintenance charges. The clause relating to fixation of totalmaintenance charges only specifies the obligation of an allotteeto pay such charges and the substantive Agreement specifiesagain that the maintenance charges would be payable to themaintenance agency. In so far as the subject dispute is concerned,the builder’s case, as stated above, is that the maintenance agencyis to receive the maintenance charges but no specific case hasbeen made out that the builder themselves are carrying on themaintenance work, which could have brought them within thedefinition of maintenance agency under the main Agreement. Insuch circumstances, it cannot be appreciated as to how, in dealingwith the allotees’ complaint against the builder, the two statutoryfora passed orders which effectively required the allotee to makeover payment as maintenance charges to a third party, theassociation in this case. No principal-agent relationship has beenestablished between the builder and the association as regardsthe Maintenance Agreement entitling the builder to claim andreceive maintenance charges. The builder, at best, is facilitator A

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Ain organising a maintenance agency. The overall obligation of aflat buyer to pay maintenance charges may be derived frominterpretation of clause 20 of the main Agreement. But withoutany claim from the entity, who are to render maintenance servicesand charge for the same, the two statutory fora ought not to havedirected the allottee to make payment of maintenance charges.BThe National and the State Commissions, have committed errorin directing the allottee to make payment of maintenance charges,which ought to have been paid to the association when there wasno claim from the association in the first place. Secondly, nothinghas been brought to the notice of the Court from which it couldCbe inferred that the builder had the authority to represent theassociation for collecting maintenance charges. On the other hand,the builder’s own case is that the maintenance charges ought tobe paid to the association. The latter (i.e., the association) hasnot been impleaded as a party at any stage of these proceedings.Nor they have prosecuted any claim. [Para 17 and 18][471-E-H;D472-A-E]

2. So far as start of the running time for quantifying delayedpayment of compensation from March 2013 is concerned, thebuilder themselves had modified the relevant clause by theirletter dated 26th March 2009, amending the starting date forEcomputing delayed payment of compensation from end of threeyears from the date of Agreement to three years from the date ofbooking. Thus, the date of booking in the case of the allotteebeing March 2008, the State Commission had rightly directedpayment of delayed compensation from March 2011. [ParaF23][475-G-H; 476-A-B]

3. The dispute between the parties primarily arose as thebuilder denied substantial benefits to the allottee for nine days’delay in clearing instalment. This allegation of delay has beenrejected by the Consumer Fora and their concurrent finding isthat no proper demand was made for payment of such instalment.GOn a plain reading of this letter, it cannot be said that the builderoffered physical possession only on remitting of payments as perstatement of accounts, which was for a sum of Rs.9,00,382/- andon furnishing an undertaking. The National Commission foundthat the statement of account dated 10[th] June 2013 and demandHon that basis was illegal. As the offer for possession was conditional

on settling of accounts and, as the accounts reflected illegaldemand, the builder cannot argue that there was a valid offer forpossession under the letter dated 10[th] June 2013. In thisbackground, in the event the allottee wanted proper adjudicationof his rights and liabilities before asking for interim possessionof the flat which would have had carried with it unspecifiedobligations, no fault can be found in such conduct of the allotee.[Para 24][476-C-F]

DLF Homes Panchkula Pvt. Ltd. vs D.S. Dhanda andOrs. [(2020) 16 SCC 318 : [2019] 7 SCR 1061; DLFHome Developers Ltd. And Another vs Capital GreensFlat Buyers Association & Ors. (2020] SCC Online SC1125 – distinguished.

Wing Commander Arifur Rahman Khan and AleyaSultana and Others vs DLF Southern Homes Pvt. Ltd.and Others (2020) 16 SCC 512 : [2020] 9 SCR 136 –held in-applicable.

4. The State Commission found deficiency of service onthe part of the builder by sending wrong statement of accountsalong with the letter of possession and as per the finding of theState Commission, the allottee was deprived in taking possessionof the flat, which was offered, because of these factors. TheNational Commission did not take a contrary view and in factcame to a finding that the statement of account dated 10th June2013 and demand on that basis was illegal. These findings arrivedby the two fora were on appreciation of evidence and there is noperversity in such finding. So, the letter of 10th June 2013 cannotbe treated as a valid offer letter. [Para 28][479-C-D]

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4690of 2022.

From the Judgment and Order dated 23.07.2021 of the NationalConsumer Disputes Redressal Commission, New Delhi in F.A. No.1638of 2019.

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Civil Appeal Nos. 4691-4692 of 2022.

Pinaki Mishra, Sr. Adv., Pravin Bahadur, Aditya P. N. Singh,Lakshya Khanna, Ms. Akanksha Thapa, Alabhya Dhamija, Drouhn Garg,Ms. Seema Sundd, Ritu Raj Srivastava, Ms. Sonia Dhamija, M/sBKaranjawala & Co., Abhishek S., Advs. for the appearing parties.

Petitioner-in-person.

Respondent-in-person.

The Judgment of the Court was delivered by C

ANIRUDDHA BOSE, J.

Leave is granted on the limited question which was formulated bythis Court at the time of issue of notices, by the order passed on 3[rd]January 2022 in SLP (C) No.19226 of 2021. So far as SLP (C)Nos.5871-5872 of 2022 are concerned, leave is granted on the point onDwhich the appellants thereof had confined their grievances, recorded inour order passed on 19[th ]April, 2022. We shall refer to these points laterin this judgment. The controversy which we shall address in this judgmentrevolves around the quantum of compensation that the appellant in SLP(C) No.19226 of 2021 (now appeal) would be entitled to receive becauseEof delay in delivery of possession of a flat as also the appellant’s obligationto pay maintenance charges in respect thereof.

2. The specific disputes giving rise to these appeals relate to anApartment Buyers’ Agreement, executed on 3[rd] December, 2008between Utpal Trehan (whom we shall henceforth refer to as “allottee”)Fand DLF Home Developers Limited (we shall refer to them as the“builder”) for purchase of a flat, within a complex named New TownHeights in Sector-91, Gurgaon (now Gurugram), Haryana. This wasbooked by the allottee on depositing a sum of Rs.5 lakhs in March 2008.The allotment letter was issued on 16[th] April 2008, and allocation wasmade of Apartment No. GBD-153 along with its parking. As per theGApartment Buyers’ Agreement, the area of the flat was to be 1760square feet (super area). The consideration amount was Rs.45,12,000/-,to be paid as per instalment payment plan forming part of the Agreement.The stipulation relating to possession of the flat is contained in Clauses11 and 17 of the said Agreement. A copy of the draft Agreement hasHbeen annexed to the allottee’s paper book. In substance, the time for

possession has been stipulated to be within 36 months from the date ofexecution of the Agreement subject to certain qualifications andexceptions incorporated in the Agreement itself. This date of delivery ofpossession, along with the effects thereof, underwent certain changes,as there was delay on the part of the builders in getting certain regulatoryclearance. Mr. Pinaki Mishra, learned Senior Advocate has appearedfor the builder and the allottee has appeared in person before us.

3. The facts forming genesis of the grievances of the allotteehave been summarised in the decision of the National Consumer DisputeRedressal Commission (“National Commission”) delivered on 23[rd] July2021, which is under appeal before us. We quote below the relevantpassages from this decision:- “12. ….. The allotment letter dated 16.04.2008 andAnnexure-3 to the Apartment Buyer’s Agreement dated03.12.2008 provided a “Time Linked Payment Plan” underwhich 95% of the sale consideration (including Rs. 5,00,000/- of booking amount) had to be paid in 11 instalments startingfrom 29.05.2008 and ending on 29.06.2010. Vide Clause-12of the Allotment Letter dated 16.04.2008 and Clause-11 ofApartment Buyer’s Agreement dated 03.12.2008, thepossession had to be handed over within 36 months from thedate of agreement. Environment Clearance Certificate wasdelayed as such the builder could not start construction tillMay, 2009, i.e. more than one year from booking. In suchcircumstances, the builder through letter dated 26.03.2009,amended the terms of the agreement and the payment of theinstalments were changed as “construction Linked PaymentPlan”. The builder has simultaneously provided variousbenefits to the buyers, i.e. Advance Payment Rebate in theshape of interest at the rate of 13% p.a. on the amount inexcess of 35% of sale price as on 26.03.2009, 5% discountof basic sale price, increase of approximately 5% area andcompensation for delayed possession @ Rs.10/- per Sq. ft.per month from the date of expected possession till actualpossession and Timely Payment Rebate, equivalent to 10%basic sale price. Letter dated 23.06.2009 and statement ofaccount dated 10.06.2013 prove that the benefits of (i)Rs.9059/- as Advance Payment Rebate, (ii) Rs. 1,98,000/- as A

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A5% discount of basic sale price and (iii) increase of 5% areahave been given to the complainant.

13. The complainant argued that “Timely Payment Rebate”and “compensation for delay in possession” had not beengiven in statement of the account dated 10.06.2013, for whichBhe was entitled. The builder has denied the Timely PaymentRebate on the ground that in spite of service of demand letterdated 29.12.2011, the amount due was not deposited till lastdate i.e. 18.01.2012, rather it was deposited on 27.01.2012(without including the amount of interest accrued on it in themeantime). As the time was essence of contract and thisCinstalment was not deposited in time as such the complainantwas not entitled for Timely Payment Rebate.”

We shall discuss separately the position of the respective partiesas regards obligation of the allottee to pay maintenance charges.D

4. The allottee had approached the Delhi State Consumer DisputesRedressal Commission (“State Commission”), in the month of May 2015,after the builder had raised additional demands under different heads.As per the allottee, the total sum, as demanded, added upto Rs.9 lakhsapproximately. Otherwise, the allottee claims to have had cleared theErequisite instalments. At that point of time, the main complaint of theallottee was of being deprived of certain payment related benefits onbeing offered possession of the flat. He was being denied these benefits,since as per the builder, the allottee had made default in payment withinthe due date on demand of the developer of the ensuing instalment. AsFwould be apparent from the said passages of the decision under appeal,the builder’s contention is that by a notice of 29[th] December 2011, theallottee was to pay the next instalment by 18[th] January 2012, but thiswas paid on 27[th] January 2012. The builder thus alleged nine days’ delay.The allottee’s stand on this count, on the other hand, was that he had notreceived the notice of 29[th] December 2011, but on receiving a reminderGon 22[nd] January 2012, he cleared the dues on 27[th] January of that year.

5. The delivery and payment stipulations were modified on accountof delay in getting environmental clearance and these modifications, asmade by the builder, has been summarised in the passage quoted abovefrom the National Commission decision. So, we are avoiding a repeat ofHthese modification terms in this judgment.

6. Before the State Commission, the allottee prayed for thefollowing reliefs:- “4. ……. i. Give the possession of the said flat at the earliest.ii. Pay an amount of Rs. 10,00,000/- as compensation forcausing mental trauma and agony to complainant due to delayin giving the possession.

iii. Also pay additional delayed possession rent @ Rs. 15/-sq. ft. till the possession is offered to complainant.

iv. Further waive of the undue/unjustifiable demand alreadyraised towards the final dues settlement.

v. To pay Rs. 50,000/- towards the expenses incurred by thecomplainants towards telephonic communications andpersonal visits made to OP since 2006.

vi. To pay a sum of Rs. 75,000/- towards the payment oflitigation expenses.”

7. During pendency of the proceeding before the State Commission,an application was filed by the builder to bring on record certainsubsequent events. What was sought to be brought on record includedcrediting to the allottee compensation for delayed possession ofRs.4,22,816/-, Timely Payment Rebate of Rs.4,02,076/- and interest ofRs.14,082/-. This application also highlighted that certain sum of moneywas already credited to the allottee’s account under the head of EarlyPayment Rebate. This application also showed the liability of thecomplainant (i.e. the allottee) of Rs.3,16,899/- as maintenance charges,Rs.96,000/- as IBM charges and Rs.14,18,203/- as holding charges. Thesaid application appears to have been filed subsequent to an attempt atmediation while the dispute was pending before the State Commission.

8. The State Commission found that there was deficiency in serviceand the complaint was allowed in following terms:- “20. …… i. OP shall issue fresh offer of possession of theapartment in question i.e. GBD-153, New Town Heights inSector-91, Gurgaon to the complainant and shall handoverthe possession of the apartment to the complainant within aperiod of 06 weeks.

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ii. OP shall also execute the sale deed/conveyance deed andget it registered in the name of the complainant on paymentof stamp duty, registration charges and other incidentalcharges, if any, by the complainant, within a period of onemonth thereafter.

OP shall pay to the complainant the delayed compensation@ Rs. 10/- per sq. ft. per month for the delayed period fromthe agreed date of possession i.e. March, 2011 till the date offresh offer of possession after adjusting the delayedcompensation already paid to the complainant.”

9. On the question of maintenance charges, however, the StateCommission went against the allottee, holding : - “19. As regards payment of Rs 3,16,899/- towards maintenancecharges, and Rs.14,18,204/- toward holding charges @ Rs.10 per square feet till 11.10.2018, as is stated in the aforesaidhanding over the cheque issued earlier a new cheque can beissued against the same.

As on date, the complainant is liable to make the followingpayment as per the agreement:

i. Maintenance charges (till 30.09.2018) – Rs.3,16,899.

ii. IBMS (Interest Bearing Maintenance Security) – Rs.96,000/-

iii. Holding Charges (@ Rs. 10/- per sq. ft. till 11.10.2018)– Rs.14,18,203/-.

However, upon suggestions from this Hon’ble Commission,the opposite party shall consider waiving the holding chargesaccruing day by day and hence, nothing remains payable tothe opposite party. The maintenance security and themaintenance charges incurred towards upkeep of themulti-storey building as mentioned above shall be payable tothe Condominium Association who are maintaining theproperty inquestion since the date the property was ready forpossession and was conveyed/offered to the complainant.”

10. One of the critical issues which was examined by the StateCommission was as to whether there was any delay in payment ofinstalment by the allottee upon demand being made. This question aroseas the builder had denied certain benefits to the appellant which wouldhave accrued to him if timely payment of instalments was made ondemand. The builder alleged that the demand in this case was made on29[th] December 2011 requiring the allottee to make payment by 18[th]January 2012. As we have already discussed, the allottee took the pleathat the letter of 29[th] December 2011 was never received by him andwhen he received a reminder letter of 19[th] January 2012 on 22[nd] January2012, he made the payment on 27[th] January 2012, factoring in certainholidays which intervened. The State Commission examined this issueand gave a finding on fact that the material on record did not establishthat the demand notice of 29[th] December 2011 was served on any adultfamily member/known person of the allottee and that the developer hadfailed to prove service of demand notice upon the allottee. The StateCommission thus held that the allottee could not be deprived of the benefitsoutlined in the builder’s letter of 26[th] March 2009 on the allegation offailure to pay instalment within due date.

11. The appeal of the allottee to the National Commission wasmainly against the finding given by the State Commission on maintenancecharges. The builder questioned legality of that part of the decision ofthe State Commission under which they were directed to issue freshoffer of possession and payment of delayed compensation.

12. The National Commission partly allowed both the appeals,inter-alia holding:-

“In view of aforementioned discussions First Appeal No. 1530of 2019 is partly allowed and First Appeal No. 1638 of 2019is partly allowed. DLF Home Developers Ltd., (the builder) isdirected to (i) offer possession of the apartment in dispute tothe complainant afresh and hand over possession to thecomplainant within 6 weeks and execute the sale/conveyancedeed in his name, within one month thereafter, on payment ofstamp duty, registration charges and other incidental legalcharges, (ii) pay compensation for delay in possession, i.einterest @ Rs. 6%- per annum on the sale price deposited byhim for the delayed period from July, 2013 till the date offresh offer of possession, adjusting “Early Payment Rebate”

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Aof Rs.95,136/- as mentioned in statement of account dated10.06.2013 and (iii) pay “Timely Payment Rebate” i.e 10%of basic sale price. The builder is entitled to realise/adjustthe Maintenance charges, from the date of issue of OccupationCertificate and cost of increased area (i.e. the area increasingto 5% of the increased area). The builder shall pay a cost ofBRs.50,000/- to the complainant to meet out his litigation andother expenses.”

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13. So far as the allotee’s appeal is concerned, (arising out of SLPC(C) No.19226 of 2021) at the time of issue of notice, this Court hadpassed the following order:- “Heard petitioner in person.

Issue notice limited to the question of maintenance charges asprovided for by NCDRC in the concluding part of the orderimpugned. Notice may be made returnable in four weeks.

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Dasti service in addition to order in process permitted.”

14. In the appeal filed by the builder, at the stage of issue of noticeon the petition for special leave to appeal, it was recorded in our order of19[th] April 2022 that the learned counsel appearing for the petitioner, (i.e.,Ethe builder) essentially confined his submissions to the grievance of thepetitioner- developer in regard to the directions by the NationalCommission and the State Commission for making ‘a fresh offer ofpossession’. We have indicated earlier in this judgment that we aregranting leave restricted to these two questions only.

15. We shall first deal with the question of directions to pay to thebuilder maintenance charges. In the definition Clause and Clauses 19,20 and 39 of the Apartment Buyer’s Agreement dated 3[rd] December2008, it has been specified:- F

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Maintenance Agency” means DHDL or association of allotteesor such other agency/body to whom the maintenance of theSaid Building/Said Complex (including common areas andfacilities) is handed over by DHDL and who shall beresponsible for providing the maintenance services within the H

Said Building /Said Complex and who shall be entitled tocollect the Maintenance Charges.”

“19. Maintenance of the Said Building/Said Complex/SaidApartment

In order to provide necessary maintenance services, upon thecompletion of the Said Building/ Said Complex themaintenance of the Said Building/Said Complex may behanded over to the association of Apartment allottees or suchother agency/ body/ company/ association of condominium.The Allottee agrees to execute Maintenance Agreement (draftgiven in Annexure VII to this Agreement) with the MaintenanceAgency or any other nominee/ agency or other body/association of Apartment owners as may be appointed byDHDL from time to time for the maintenance and upkeep ofthe Said Land/the Said Building/the Said Complex. ThisAgreement shall not be deemed to be executed till the same issigned by all the parties. The Allottee further undertakes toabide by the terms and conditions of the MaintenanceAgreement and to pay promptly all the demands, bills} chargesas may be raised by the Maintenance Agency from time totime. DHDL reserves the right to change, modify, amend,impose additional conditions in the Maintenance Agreementat the time of its final execution. The Maintenance Chargesshall become applicable/ payable from the date DHDL hasreceived the occupation certificate/the date of allotmentwhichever is later. It is further clarified that DHDL may at itssole discretion hand over the maintenance of the Said Building/Said Complex to anybody/association of Apartment ownersof the Said Building/Said Complex including but not limitedto any body/ association of condominium of the Said Building/Said Complex, as the case may be, at any time before/ afterthe construction of the Said Building/ Said Complex is completeeither for each building or for the entire Said Complex andthe Allottee specifically gives his consent to this proposal. Itis further specifically clarified that the draft MaintenanceAgreement, set out in Annexure VII to this Agreement is merelyan indicative Agreement that is proposed to be entered intowith the Allottee for maintenance and upkeep of the SaidBuilding/ Said Complex, however, if at any time, after having A

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taken over the Said Building/ Said Complex, the saidassociation of Apartment owners/ condominium of associationdecides to modify, alter, add, delete any one or more of theterms and conditions of the Maintenance Agreement, theAllottee shall not have any objection to the same and shallexecute the Maintenance Agreement as may be required bythe Maintenance Agency or association of Apartment ownersor association of condominium or its nominees or assigns.

20. Fixation of total Maintenance Charges

The total Maintenance Charges shall be more elaboratelydescribed in the Maintenance Agreement (draft given inAnnexure VII). The Maintenance Charges shall be levied fromthe date of occupation certificate or the date of allotment,whichever is later and the Allottee undertakes to pay the samepromptly. It is agreed by the Allottee that the payment ofMaintenance Charges will be applicable whether or not thepossession of Said Apartment is taken by the Allottee. TheMaintenance Charges shall be recovered on such estimatedbasis which may also include the overhead cost on monthly/quarterly intervals as may be decided by the MaintenanceAgency and adjusted against the actual audited expenses asdetermined at every end of the financial year and any surplus/deficit thereof shall be carried forward and adjusted in themaintenance bills of the subsequent financial year. Theestimates of the Maintenance Agency shall be final andbinding on the Allottee. The Allottee agrees and undertakesto pay the maintenance bills on or before due date as intimatedby the Maintenance Agency.

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39. Association of apartment owners

The Allottee agrees and undertakes to join association/ societyof apartment owners as may be formed by DHDL/Companyon behalf of Apartment owners and to pay any fees,subscription charges thereof and to complete suchdocumentation and formalities as may be deemed necessaryby DHDL/ Company for this purpose.”

16. Annexure VII to that Agreement appears at Page 185 of thepaperbook in SLP (C) No. 19226 of 2021, which is in the form of a draft.The actual copies of the Agreements, if executed, have not been annexedto the paperbooks filed in either of these two appeals. No material hasotherwise been produced before us to show if the Maintenance Agreement(Annexure VII to the main Agreement) was executed or not. Be that asit may, even if we proceed on the basis that the maintenance Agreementis applicable, the same constitutes a tripartite Agreement involving thebuilder, New Town Heights Condominium Association, a registeredsociety and the purchaser. This is in the format of a standard formAgreement with several portions thereof left blank. In the counter affidavitof the builder, it has been stated that the maintenance charges are notpaid to them but to the statutory condominium association of alloteeswho actually renders maintenance services recovered from each allotee.That association to us appears to be an independent body and there isnothing on record to demonstrate that such association is an agent ofeither the builder or the purchasers. In Clause 39 of the ApartmentBuyers’ Agreement, there is hint that such an Association might beformed by the builder but no particular of its formation, or for that matter,its existence have been shown before us at the time of hearing.

17. The definition of Maintenance Agency means “DHDL (thebuilder) or association of allottees or such other agency…….” but theconjunction “or” as has been applied in the definition clause ought tomean in the alternative and this definition cannot be construed to inferthat even after handing over the maintenance work to an association,the builder shall continue to remain as a maintenance agency entitled tocollect maintenance charges. The clause relating to fixation of totalmaintenance charges only specifies the obligation of an allottee to paysuch charges and the substantive Agreement specifies again that themaintenance charges would be payable to the maintenance agency.

18. In so far as the subject dispute is concerned, the builder’scase, as stated above, is that the maintenance agency is to receive themaintenance charges but no specific case has been made out that thebuilder themselves are carrying on the maintenance work, which couldhave brought them within the definition of maintenance agency underthe main Agreement. In such circumstances, we are unable to appreciateas to how, in dealing with the allotees’ complaint against the builder, thetwo statutory fora passed orders which effectively required the allotee A

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Ato make over payment as maintenance charges to a third party, theassociation in this case. We have already observed that from the materialson record, no principal-agent relationship has been established betweenthe builder and the association as regards the Maintenance Agreemententitling the builder to claim and receive maintenance charges. The builder,at best, is facilitator in organising a maintenance agency. The overallBobligation of a flat buyer to pay maintenance charges may be derivedfrom interpretation of clause 20 of the main Agreement. But withoutany claim from the entity, who are to render maintenance services andcharge for the same, in our opinion, the two statutory fora ought not tohave directed the allottee to make payment of maintenance charges.CThe National and the State Commissions, in our opinion, have committederror in directing the allotee to make payment of maintenance charges,which ought to have been paid to the association when there was noclaim from the association in the first place. Secondly, nothing has beenbrought to our notice from which it could be inferred that the builder hadthe authority to represent the association for collecting maintenanceDcharges. On the other hand, as we have already indicated, the builder’sown case is that the maintenance charges ought to be paid to theassociation. The latter (i.e., the association) has not been impleaded as aparty at any stage of these proceedings. Nor they have prosecuted anyclaim.

E19. We must point out here that from the two orders of the Stateand the National Commissions, we do not find that the point on right ofthe builder to claim maintenance charges was specifically discussed. Inthe complaint before the State Commission, point was taken that inabsence of delivery of possession, charging for maintenance by theFassociation was unjustified but the principle which we have discussed inthe preceding three paragraphs are purely legal issues and goes to theroot of the dispute relating to payment of maintenance charges. Moreover,question of law formulated in paragraph 2D of the allottee’s specialleave petition (now appeal), in our opinion, is broad enough to cover thisissue. While determining rights of parties on a question of law whichGemerges from the pleadings and crystallises for adjudication, we cannotignore answering that question. For otherwise, an incorrect principle oflaw may have to be laid down on account of failure of the litigants inraising it in clear terms. Moreover, the nature of the dispute havingoriginated from a consumers’ grievance, the role of the Court has to beHbeyond just being an adjudicatory forum in an adversarial cause, and must have an element of proactivity in public interest. Having returned aspecific finding on this point, we do not consider it necessary to dealwith the allottee’s contention that claim of maintenance charge wasunjustified in absence of possession of the subject-flat being delivered tothem.

20. Now we shall turn to the legality of the decision under appealissuing direction upon the builder to make payment of delayedcompensation. The provision relating to delayed compensation iscontained in Clause 17 of the main Agreement:-

“17. Failure to deliver possession : Remedy to DHDL:TheAllottee agrees that if the construction and development ofthe Said Complex is abandoned or DHDL is unable to givepossession within thirty six (36) months from the date ofexecution of this Agreement or such extended periods aspermitted under this Agreement, DHDL shall be entitled toterminate this Agreement whereupon DHDL’s liability shallbe limited to the refund of the amounts paid by the Allotteewith simple interest @ 6% per annum for the period suchamounts were lying with DHDL and DHDL shall not be liableto pay other compensation whatsoever.

However, DHDL may, at its sole option and discretion, decidenot to terminate this Agreement in which event DHDL agreesto pay only to the Allottee(s) and not to anyone else and onlyin cases other than those provided in Clauses 14, 15, 16 and50 and subject to the Allottee not being in default under anyterm of this Agreement, compensation @ Rs. 5/- per sq. ft. ofthe Super Area of the Said Apartment per month for the periodof such delay beyond thirty six (36) months or such extendedperiods as permitted under this Agreement. The adjustmentof such compensation shall be done only at the time ofconveyancing the Said Apartment to the Allottee first namedin this Agreement and not earlier.”

21. As there was delay in obtaining regulatory clearance for theproject, the builder themselves had made certain modifications in theterms of the Agreement, providing certain benefits to the flat buyers.This was done by the communication dated 26[th] March 2009 (at page A

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A223 of the paper book in the allottee’s appeal). The relevant portion ofthis communication reads:- “As far as “New Town Heights” is concerned, we would like,to mention here that the necessary Building Plan Approvalsfor all the sectors of “New Town Heights” have been received.BAs you know, we are a highly compliant organisation, and wewould like to start construction only after we have receivedthe final Environment Clearance, which is awaited. As soonas we receive the same, we shall commence the construction.However, to allay any fear that you might have as far as thehanding over period is concerned, we hereby revise theCCompensation Clause No. 17 of the Agreement to Sell, to theextent of doubling the Compensation payable to Rs. 10/- psftper month, as against Rs. 5 /- psft per month, that wasapplicable earlier. Similarly, if the customer delays in takingover the possession once the possession is offered by theDCompany, he/she shall also be liable to pay Holding Chargesat the same rate, ie., Rs. 10/- psft per month, for the delayinvolved in taking over the possession.

We stand behind our promised date of delivery as 3 years, aswe have already communicated earlier. We have amended thisEclause to “3 Years from the date of booking”instead of ‘3years from the date of Agreement’, which was the earliercommitment.”

The direction of the State Commission on delayed compensationFhas already been quoted in this judgment. The National Commission,however, modified this directive, which has also been quoted in the earlierparagraph. This modification has been questioned by the allotee.

22. Paragraphs 15 and 16 of the National Commission’s decisiondisclose the reasoning for modifying the directive of the State CommissionGupon the builder to pay delayed compensation. Such modification is asregards the quantum of compensation and the relevant part of theNational Commission’s order is reproduced below:- “15. So far as the compensation for delayed possession isconcerned, the complainant has accepted part of the benefitsHgiven under the letter dated 26.03.2009 and is claiming

remaining benefits. By this letter, mode of payment of theinstalments were changed as “construction Linked PaymentPlan”. The construction was started in May, 2009. Afteradjusting the amount till March, 2009 and the benefits givenby the letter dated 26.03.2009, on it, the complainant wasasked to deposit instalment some time in 2010. Demand noticedated 16.03.2012, shows that Terrace Floor Slab wascompleted at that time and demand notice dated 18.06.2012shows that the builder had applied for issue of OccupationCertificate, which has been issued on 28.02.2013. Thereafter,final accounts of the buyers were prepared and possessionwas offered through letter dated 10.06.2013. Due to delay instarting construction payment schedule of the instalments waschanged and to mete out suffering of the buyers, variousbenefits were provided. Delay in offering possession hadoccurred as construction could not be started for more thanone year of booking. lf the buyers were required to paymentinstalments on later dates than the dates fixed in theagreement, then how it can be expected that the possessioncould be given within three years of the agreement. In thecircumstances, the builder was justified in not givingcompensation for delayed possession in the statement ofaccount dated 10.06.2013.

16. However, as we found that the complainant was entitledfor “Timely Payment Rebate” as such statement of the accountdated 10.06.2013 and demand on its basis was illegal. Insuch circumstances we direct the builder to pay 6% p.a. intereston the amount deposited by the complainant toward basicsale price, as compensation for delay in possession from July2013 till date of offer of possession as directed by SupremeCourt in Wg. Cdr. Arifur Rahman Khan Vs. DLF SouthernHomes Pvt. Ltd., (2020) 16 SCC 512.”

23. We are, however, unable to accept this reasoning. So far asstart of the running time for quantifying delayed payment of compensationfrom March 2013 is concerned, we find that the builder themselves hadmodified the relevant clause by their letter dated 26th March 2009,amending the starting date for computing delayed payment of A

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Acompensation from end of three years from the date of Agreement tothree years from the date of booking. Thus, the date of booking in thecase of the allottee being March 2008, the State Commission had rightlydirected payment of delayed compensation from March 2011.

24. Mr. Mishra has urged that the entire responsibility for deliveryBof possession of the flat should not fall on his clients as the allotteehimself could have applied before the adjudicatory forum for possessionthereof subject to outcome of the case. But this argument in our view isfallacious. The dispute between the parties primarily arose as the builderdenied substantial benefits to the allottee for nine days’ delay in clearinginstalment. This allegation of delay has been rejected by the ConsumerCFora and their concurrent finding is that no proper demand was madefor payment of such instalment. Mr. Mishra has, in his submissions,emphasised on the “offer for possession” letter dated 10[th] June 2013and his submission is that obligation to pay delayed payment compensationcannot go beyond that date. The builder’s case is that they cannot beDheld responsible if the allottee does not take possession of the flat, whenoffered. A copy of this letter has been annexed at page 235 of the builder’spaperbook. On a plain reading of this letter, we find that the builderoffered physical possession only on remitting of payments as perstatement of accounts, which was for a sum of Rs.9,00,382/- and onfurnishing an undertaking. The National Commission found that theEstatement of account dated 10[th] June 2013 and demand on that basiswas illegal. As the offer for possession was conditional on settling ofaccounts and, as the accounts reflected illegal demand, the builder cannotargue that there was a valid offer for possession under the letter dated10[th] June 2013. In this background, in the event the allottee wantedFproper adjudication of his rights and liabilities before asking for interimpossession of the flat which would have had carried with it unspecifiedobligations, no fault can be found in such conduct of the allotee.

25. Reliance has been placed on the judgments of two coordinateBenches of this Court in the cases of DLF Homes Panchkula Pvt.GLtd. vs D.S. Dhanda and Ors. [(2020) 16 SCC 318] and DLF HomeDevelopers Ltd. And Another vs Capital Greens Flat BuyersAssociation & Ors. [(2020] SCC Online SC 1125] in support of theargument of the builder that “Delay Compensation” could be awardedonly upto the date of offer of possession. But in this case, we havealready held that there was no valid offer for possession. In the caseH

reported in [(2020) 16 SCC 318], interest was directed to be paid byway of compensation on deposited amount from the promised date ofpossession to the actual date of handing over possession, and thecoordinate Bench directed, inter-alia, payment of interest at the rate of9% per annum for a period of two months from the date of offer forpossession. In the case of Capital Greens Flat Buyers Association(supra), interest was awarded as compensation for delay in delivery ofpossession. The latter judgment was delivered in the specialcircumstances of that case. We accept the argument advanced on behalfof the builder that time for payment of compensation for delayed paymentshall stop running from the date of offer for possession. But in this case,there was no valid offer for possession. Mr. Mishra also sought to bringto our notice the proposals made in course of mediation proceeding. Butmediation obviously failed between the parties and we cannot refer towhat transpired during the process of mediation while adjudicating theright of the parties in an appeal.

26. The ratio of the judgment in the case of Wing CommanderArifur Rahman Khan and Aleya Sultana and Others vs DLFSouthern Homes Pvt. Ltd. and Others [(2020) 16 SCC 512] doesnot apply in the facts of the present case. The aforesaid decision wasrendered in a context in which a coordinate Bench of this Court foundthe Agreement involved in that case was lopsided, giving unjustifiedadvantage to the builder. The relevant paragraph from the judgment isreproduced below:- “25. The only issue which then falls for determination iswhether the flat buyers in these circumstances are constrainedby the stipulation contained in Clause 14 of ABA providingcompensation for delay @ Rs 5 per square feet per month. Inassessing the legal position, it is necessary to record that theABA is clearly one-sided. Where a flat purchaser pays theinstalments that are due in terms of the agreement with a delay,Clause 39(a) stipulates that the developer would “at its soleoption and discretion” waive a breach by the allottee of failingto make payments in accordance with the schedule, subjectto the condition that the allottee would be charged interest @15 per cent per month for the first ninety days and thereafterat an additional penal interest of 3% p.a. In other words, adelay on the part of the flat buyer attracts interest @ 18%

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Ap.a. beyond ninety days. On the other hand, where a developerdelays in handing over possession the flat buyer is restrictedto receiving interest at Rs 5 per square feet per month underClause 14 (which in the submission of Mr Prashant Bhushanworks out to 1-1.5% interest p.a.). Would the condition whichhas been prescribed in Clause 14 continue to bind the flatBpurchaser indefinitely irrespective of the length of the delay?The agreement stipulates thirty-six months as the date for thehanding over of possession. Evidently, the terms of theagreement have been drafted by the developer. They do notmaintain a level platform as between the developer andCpurchaser. The stringency of the terms which bind thepurchaser are not mirrored by the obligations for meetingtimelines by the developer. The agreement does not reflect aneven bargain.”

27. So far as the present appeals are concerned, the quantum ofDdelayed compensation has been enhanced by the builder themselves,along with provision for enhancement with respect to the delay in paymentif made by the allottee in taking possession. In such circumstances, wedo not think the National Commission ought to have had deviated fromthe modified contractual terms contained in the communication dated26[th] March 2009 and replace the said terms with 6% interest per annumEfrom July 2013 till the date of fresh offer of possession was made. Inour opinion, on the point of payment of delayed compensation, the StateCommission’s view was the right view.

28. Now comes the question as to which date shall be treated tobe the date for fresh offer of possession. Both the fora have directedFthe builder to issue fresh offer of possession as per the dates specified inthe order. The directions of the State and National Commissions werenot to operate with retrospective effect, from 10[th] June 2013. Theargument of the builder is that a possession offer letter was issued onthat date. This letter showed certain sum of balance and also includedGcertain demands on account of cost of increase in apartment size area,further EDC and IDC charges, stamp duty charges, etc. Some rebateswere also denied to the allottee on account of delay in payment ofinstalment by nine days, which we have discussed in the precedingparagraphs of this judgment. In an application dated 15[th] November 2018,which was filed on 7[th] January 2019 before the State Commission, theH

builder admitted their fault in not providing any compensation for delayedpayment in the aforesaid letter of 10[th] June 2013 and prayed that thecomplainant (i.e., the allottee) be directed to pay excess amount asspecified in the said application and take possession of the apartment.The State Commission found that, as per the said application, the buildershad admitted wrong calculation in settling the credits in the account ofthe allottee. In fact, the builders then had given the credit for a sum ofRs.2,40,210/- and issued a cheque for the said sum, which the allotteedid not encash. Such conduct on the part of the allottee was justified asthe dispute was still pending before the State Commission. The StateCommission found deficiency of service on the part of the builder bysending wrong statement of accounts along with the letter of possessionand as per the finding of the State Commission, the allottee was deprivedin taking possession of the flat, which was offered, because of thesefactors. The National Commission did not take a contrary view and infact came to a finding that the statement of account dated 10[th] June2013 and demand on that basis was illegal. These findings arrived by thetwo fora were on appreciation of evidence and we do not find anyperversity in such finding. So, the letter of 10[th] June 2013 cannot betreated as a valid offer letter.

29. (i) We, accordingly, hold the finding of the National Commissionas also the State Commission that the allottee would be required to paymaintenance charges as erroneous and that part of the findings of thetwo Commissions are set aside.

(ii) The entity to whom such charge is due has not raised anyclaim. In such circumstances, direction to the allottee to pay maintenancecharges was not warranted as the entity entitled to receive such chargesis not a party to these proceedings. Such directions assume the characterof declaration of liability or obligation of the allottee in absence of theadmitted claimant, who had not brought any action or staked their claimin any other manner through these proceedings. Such declaratory reliefcannot be given in vacuum.

(iii) We sustain the order of the National Commission as also theState Commission that fresh offer of possession ought to be issued. Weextend the time for issuing such offer of possession by a period of eightweeks from this date. Execution of Deed shall be effected within theaforesaid period.

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A(iv) We modify the direction of National Commission relating topayment of delayed compensation and while restoring the directions ofthe State Commission, we direct that delayed compensation be paid atthe rate of Rs.10 per square feet per month for the entire period fromMarch 2011 till the date on which the fresh offer of possession is issued.

(v) The delayed possession compensation shall be paid to theallottee after adjusting the delayed compensation already paid. The earlypayment rebate of Rs.95,136/- shall also be adjusted, as has been directedby the National Commission. The said sum was mentioned in thestatement of account dated 10[th] June 2013.

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(vi) We retain the order as to costs to be paid to the allotteequantified by the National Commission as Rs.50,000/-.

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30. Both the appeals are disposed of in the above terms. We,however, make it clear that in this judgment, we have addressed only thetwo questions on which leave is granted. Rest of the findings or directionsof the National Commission shall remain undisturbed.D

31. Connected applications, if any, shall stand disposed of, withoutany order as to costs.

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Devika Gujral

(Assisted by : Mahendra Yadav, LCRA)

Appeals disposed of.

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