NCDRC Enhances Interest to 9% for Delay in Flat Possession by Emaar India, Sets Aside Additional Compensation for Mental Agony
Pranav B Prem
The National Consumer Disputes Redressal Commission (NCDRC), comprising Presiding Member Subhash Chandra and Member AVM J. Rajendra, has modified the compensation awarded by the Delhi State Consumer Commission in a case involving a delay of over five years by Emaar India Ltd. in handing over possession of a flat. While enhancing the compensation in the form of interest from 8% to 9% per annum, the Commission set aside the ₹2,00,000 awarded for mental agony and harassment, holding that multiple compensations for the same deficiency in service are impermissible under settled law.
Background
The complainants, Atul Kulshrestha and Nishi Kulshrestha, booked Apartment No. PTS-11-0301 on the third floor of Block No. 11 in Emaar’s residential project ‘The Palm Terraces Select’ at Sector 66, Gurugram, Haryana. An Apartment Buyer Agreement (ABA) was executed on 21.12.2010. As per Clause 4 of the agreement, the builder was required to deliver possession within 30 months from the commencement of construction, with a further grace period of 3 months.
However, possession was offered only on 11.03.2019 and the keys handed over on 26.04.2019—an inordinate delay of almost four years beyond the agreed timeline. Aggrieved by the non-payment of adequate compensation for the delay, the complainants filed a case (CC No. 128 of 2021) before the Delhi State Consumer Disputes Redressal Commission.
Decision of the State Commission
By its order dated 31.10.2023, the State Commission partly allowed the complaint, directing Emaar India to:
Pay simple interest @8% per annum on the total deposited amount of ₹1,92,68,146 from 01.04.2015 (the date when possession was due) to 11.03.2019 (the date of offer).
Deduct ₹7,81,794 already paid by Emaar towards delayed possession compensation.
Pay ₹2,00,000 as compensation for mental agony and harassment.
Pay ₹50,000 towards litigation costs.
Both parties filed cross-appeals before the NCDRC. The complainants sought enhancement of compensation, including interest at 9% and ₹10 lakhs for mental agony. Emaar, on the other hand, challenged the award as excessive and argued that multiple forms of compensation for the same deficiency were not legally tenable.
Submissions Before the NCDRC
Complainants' Submissions:
The compensation granted was inadequate and inconsistent with established Supreme Court precedents.
The ABA provided for compensation at a higher rate, and the delay of several years caused immense hardship and financial loss.
Reliance was placed on the Supreme Court judgment in Experion Developers Pvt. Ltd. v. Sushma Ashok Shiroor [2022 SCC OnLine SC 146], where interest @9% was deemed fair and just.
Builder’s Submissions:
The delay occurred due to circumstances beyond their control, including regulatory and market conditions, and should not be attributed to deficiency in service.
The award of 8% interest was already excessive and should have been capped at 6%.
Citing DLF Homes Panchkula Pvt. Ltd. v. D.S. Dhanda [CA Nos. 4910-4941 of 2019], it was argued that once interest is awarded as compensation for delay, additional amounts for mental agony cannot be granted, as this would amount to double compensation.
Observations of the NCDRC
After reviewing the submissions and documents, the NCDRC held that the delay in handing over possession was clearly established. Though the builder attributed the delay to external factors, no compelling justification was provided to warrant a reduction in liability.
Referring to Experion Developers Pvt. Ltd. (supra), the bench noted: “The interest of 9% granted by the Commission is fair and just… and we find no reason to interfere in the appeal filed by the consumer for enhancement of interest.”
Relying on this, the NCDRC enhanced the interest rate from 8% to 9% per annum, applicable on the total amount deposited by the complainants from 01.04.2015 to 11.03.2019, after deducting ₹7,81,794 already paid.
On the issue of compensation for mental agony and harassment, the bench cited the Supreme Court's ruling in DLF Homes Panchkula Pvt. Ltd. (supra), which held: “When compensation in the form of interest on the amount paid as consideration is granted, further compensation for the same cause of action towards mental agony cannot be allowed.” Accordingly, the ₹2,00,000 awarded by the State Commission under this head was set aside.
Final Directions by the NCDRC
The Commission modified the State Commission’s order as follows:
Interest @9% per annum to be paid by Emaar India on ₹1,92,68,146 from 01.04.2015 to 11.03.2019, after deducting ₹7,81,794.
₹2,00,000 compensation for mental agony and harassment was set aside.
₹50,000 awarded as litigation costs was upheld.
With these modifications, both appeals—filed by the complainants and Emaar India—were disposed of.
Appearance
For Atul Kulshrestha & Anr: Ms.Ishita Singh, Advocate
For EMAAR India Limited: Mr.Arjun Jain, Ms. Anushree Narain and Mr. Vipin Chaudhary, Advocates
Cause Title: Atul Kulshreshtha vs EMAAR India Ltd.
Case No: First Appeal No.1126 OF 2023
Coram: Hon’ble Mr. Subhash Chandra [Presiding Member], Hon’ble AVM J. Rajendra AVSM VSM (Retd.) [Member]
[Read/Download order]
