M/S IREO Pvt. Limited vs Aloke Anand and Others
Background
IREO Pvt. Limited developed a housing project called "SKYON" in Gurgaon, advertising high-end amenities such as home automation and video door security. Flat buyers who had paid substantial sums complained to the National Consumer Disputes Redressal Commission (NCDRC) that possession was delayed and that, even after an "offer of possession," the flats were incomplete and not habitable. The NCDRC ordered refunds with interest in both the lead case and a connected case, relying on its own earlier rulings against the same builder that had been upheld by the Supreme Court. IREO appealed, arguing the delivery timeline should be counted from the date it received a mandatory Fire NOC (No-Objection Certificate), not from the date its building plans were approved.
Decision Breakdown
The Supreme Court held that even accepting IREO's preferred timeline (using the Fire NOC date), the builder still failed to actually hand over a complete, habitable apartment: its own email admitted the flat's finishing work remained undone months after even an NCDRC interim order directed possession to be delivered. The Court distinguished an earlier three-judge decision (Abhishek Khanna) that had allowed builders to count the period from the Fire NOC date, noting that ruling applied only where construction was actually complete, which was not the case here. In the connected appeal, the NCDRC had found that promised amenities were never provided at all, which independently justified a refund since a solemn representation about amenities is legally enforceable. The Court affirmed both refund orders (principal amount plus 10.25% simple interest per annum) and dismissed both appeals.
Lesson Learnt
A builder cannot escape a refund order by pointing to technical possession-timeline calculations if the flat offered was not actually complete or lacked the amenities promised in the sale agreement. Courts look at the real, on-ground state of the property, and false representations about amenities are independently actionable.