In an appeal filed by the developer against the order and judgment of the State Commission, Chandigarh, the National Consumer Disputes Redressal Commission has held that the builder/developer cannot take recourse to providing compensation as stipulated in the agreement i.e. Rs. 5 per sq. feet per month as compensation for delay in handing over the flat for an unreasonable and unjustified period of time and that the buyer is entitled to seeking compensation much higher for delayed possession or seek refund of the amount paid alternatively.

In the case of Emaar MGF Land Ltd and Anr Versus Govind Paul, the appellant had sought the appeal challenging the amount of compensation granted to the Respondent along with refund of the principal amount paid as well as other miscellaneous amounts expended by the Respondent. The contention that the Respondent is entitled to receiving compensation for delayed possession as per the agreement was rejected as the token compensation was only for a short period of delay by the Appellant in handing over the premises and not for an ‘indefinite and unreasonable delay’.

The Bench comprising of Presiding Member Dr Kantikar and Member Dinesh Singh disposed the appeal and further enhanced the compensation from Rs. 3 Lakhs to Rs. 5 Lakhs and litigation costs from Rs 25,000 to Rs. 50,000 and observed as follows:

“29. In respect of the compensation to be awarded, it may first be seen that the compensation should neither be meagre, nor exorbitant, but equitable and just, commensurate with the loss and injury. In this case the delay in handing over possession was for a period of almost 20 months from the expiry of 36 months of the date of execution of the agreement before the consumer-complainant sought relief under the Act. The possession of the unit in question was not offered even in the subsequent period of litigation in the State Commission (upto 16-08-2016 ; about 03 more months) and also in the still subsequent period of litigation in the National Commission (upto 03-07-2018; yet about 23 more months). The consumer – complainant was in a continuous position of harassment, uncertainty and difficulty even after making payment of 39,88,056 / 42,18,200 = about 94.5% of the consideration amount way back in Aug, Oct.’11. Equitable and just compensation is necessary……”


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Judgment: Emaar MGF Land and Anr Versus Govind Paul