Venkataraman Krishnamurthy vs. Lodha Crown Buildmart Pvt. Ltd.
Background
This Supreme Court case arose from a dispute between homebuyers (Venkataraman Krishnamurthy and another) and a real estate developer (Lodha Crown Buildmart Pvt. Ltd.) regarding the delayed delivery of possession of a 4BHK apartment in Mumbai. The buyers had entered into an Agreement to Sell on November 29, 2013, with a stipulated possession date of June 30, 2016, extendable by a one-year grace period. The developer failed to obtain and deliver the Occupancy Certificate (OC) within this period. The buyers sought a refund of the consideration paid, invoking their contractual right due to the delay.
The National Consumer Disputes Redressal Commission (NCDRC) had rejected the buyers’ claim for a refund, interpreting the contract in a manner that denied them the right to terminate and seek repayment, despite the developer’s default.
Key Issues
Whether the NCDRC could reinterpret or rewrite the terms of the contract between the parties.
Whether the buyers were entitled to terminate the contract and claim a refund when the developer failed to deliver the OC within the agreed period.
Whether a partial Occupancy Certificate or mere “fit out” possession satisfies the contractual obligation of delivery.
Supreme Court’s Analysis
The Supreme Court emphasized that the sanctity of contracts must be maintained, and consumer forums cannot rewrite or reinterpret clear contractual terms to suit perceived equity or expediency.
The Court held that the buyers’ right to terminate the agreement and claim a full refund was explicitly provided in the contract if the developer failed to deliver the OC within the grace period.
It was clarified that a “part occupancy certificate” or mere permission for fit-outs does not amount to legal possession or compliance with the contractual obligation to deliver possession.
The Court found that the NCDRC had erred in denying the buyers their contractual remedy and had overstepped its jurisdiction by effectively rewriting the contract.
Judgment
The Supreme Court allowed the appeal, set aside the NCDRC’s order, and directed Lodha Crown Buildmart Pvt. Ltd. to refund the entire consideration amount to the buyers, along with interest.
The Court mandated that the refund be paid in equal monthly installments, beginning April 2024, until the full amount is repaid.
The judgment reaffirmed that consumer forums must enforce, not alter, the terms of a contract, and that homebuyers’ rights under clear contractual provisions must be protected.
Significance
The ruling strengthens the enforceability of contractual rights in real estate transactions and limits the power of consumer forums to interfere with or rewrite agreements.
It clarifies that only a full Occupancy Certificate constitutes proper delivery of possession, protecting homebuyers from partial or symbolic handovers.
The judgment is a significant precedent for consumer protection and contractual certainty in the real estate sector.
Citation:
Venkataraman Krishnamurthy & Anr. v. Lodha Crown Buildmart Pvt. Ltd., 2024 INSC 132, Supreme Court of India, decided on February 22, 2024.
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