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Kusum Agarwal & Anr. v. M/s Harsha Associates Pvt. Ltd.

Civil Appeal · 2017 INSC 1037Decided 12 Oct 2017
Civil Appeal No. 16814 of 2017
Justice Madan B. Lokur · Justice S. Abdul Nazeer · Justice Deepak Gupta

Background

A husband and wife jointly booked a commercial shop in a complex being built by the respondent-builder for Rs. 4,80,000, paid in installments. In December 2004 the builder wrote to them saying the shop was ready and asked for the balance payment, but never handed over possession even after the couple offered to pay. It later emerged, for the first time before the State Consumer Commission, that the builder had actually sold the very same shop to a different buyer back in November 2004, before it ever wrote asking the appellants for the balance payment. The matter went through the District Forum (which ordered possession plus interest), the State Commission (which ordered only a refund, no interest), and finally the National Commission, which dismissed the appellants' revision petition entirely on the technical ground that a commercial shop buyer is not a "consumer": a defence the builder had never even raised earlier.

Decision Breakdown

The Supreme Court held that the National Commission erred procedurally by dismissing the complainants' own revision petition (filed only to seek more compensation) on a new ground the respondent itself had never raised in the lower fora, and set aside the National Commission's order. On the merits, the Court found the builder had not come to court with clean hands: it had sold the shop to another buyer in November 2004 and only afterward, in December 2004, misleadingly asked the appellants for the balance payment as if the shop were still available and ready: a clear deficiency of service. The Court allowed the appeal and directed the builder to refund Rs. 2,05,000 already paid, plus Rs. 50,000 in damages (Rs. 2,55,000 total), with 18% annual interest from 6 December 2004 until full payment.

Lesson Learnt

A builder who secretly resells a booked property to someone else while continuing to demand payment from the original buyer commits a clear deficiency in service, and consumer fora/courts will look past technical defences (like "not a consumer") that the opposing side never raised earlier and that would unfairly let a dishonest party escape liability.

Official source (sci.gov.in)View Judgment (PDF)

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