New Delhi: The Supreme Court has ruled that an offer from a real estate developer to a home buyer to take possession of a flat without the necessary completion and firefighting clearance certificates is invalid.

Key Ruling Highlights

The Court emphasized that the absence of these certificates constitutes a deficiency in service under the Consumer Protection Act. The bench of Justices Vikram Nath and Prasanna Bhalachandra Varale has directed the Agra Development Authority (ADA) to pay Rs 15 lakh in compensation to Dharmendra Sharma for failing to provide the required certificates when offering the flat in 2014 and during the consumer commission proceedings.

Legal Background and Key Contention

The case involved appeals against a directive from the National Consumer Disputes Redressal Commission (NCDRC) to refund the flat amount. The bench highlighted the key contention that the offer’s validity depends on the presence of the completion and firefighting clearance certificates.

• Relevant Legal Provisions: Section 4(5) of the UP Apartment (Promotion of Construction, Ownership & Maintenance) Act, 2010, and Section 19(10) of the RERA Act, 2016, mandate that developers must secure these certificates before offering possession.
• Failure to Provide Certificates: The ADA’s inability to produce these certificates invalidated its possession offer. Citing precedents, particularly Debashis Sinha Vs R N R Enterprise (2023), the Court reaffirmed that possession cannot be compelled without the requisite certificates.

Deficiency in Service and Compensation

The Court found that the absence of certificates constituted a deficiency in service. ADA’s failure justified Sharma’s refusal to take possession and strengthened his claim for additional compensation due to the delay caused by ADA’s breach.

• Issues of Payment: Both parties were found to have lapses. Sharma, despite paying Rs 56.54 lakh in 2012, did not pay an additional Rs 3,43,178 until June 04, 2019, after repeated reminders. The delay, including accrued interest, was noted by the bench.
• ADA’s Obligations: The ADA’s offer of possession was deemed legally invalid due to non-compliance with statutory obligations. This failure was not remedied even before the NCDRC.

Court’s Judgment

The Court directed the ADA to:

1. Refund the entire amount deposited by Sharma with 9% interest per annum from July 11, 2020, until the date of refund.
2. Pay an additional Rs 15 lakh to Sharma.
3. Return the non-judicial stamp worth Rs 3,99,100.

The Court refrained from imposing exemplary costs, considering the ADA’s role as a public-serving civic body.

This judgment underscores the necessity for developers to comply with statutory requirements before offering possession and reinforces the rights of consumers under the Consumer Protection Act.