# PIONEER URBAN LAND & INFRASTRUCTURE LTD v. GOVINDAN RAGHAVAN

- **Citation:** [2019] 5 S.C.R. 1169
- **Court:** Supreme Court of India
- **Decided:** 2019-04-02
- **Case number:** Civil Appeal No. 12238 of 2018
- **Bench:** Uday Umesh Lalit, Indu Malhotra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/pioneer-urban-land-infrastructure-ltd-v-govindan-raghavan-33773
- **Pages:** 16

## Headnote

Consumer Protection Act, 1986 - s.23 - Deficiency of service
- Appellant-Builder launched a residential project and respondentflat purchaser entered into an Apartment Buyer's agreement to
purchase an apartment in the said project for a total sale
consideration of Rs.4,83,25,280/- - As per agreement, the appellant
was to apply for the occupancy certificate within 39 months from
the date of excavation with grace period of 180 days - However,
Appellant-builder failed to apply for occupancy certificate as per
agreement - Consumer complaint filed before the National
Commission - During the pendency of the proceedings, the appellant
obtained the occupancy certificate and pleaded National
Commission to direct the respondent to take possession of the flat -
However, the respondent refused to take possession as there was
an inordinate delay of almost 3 years - National Commission allowed
the consumer complaint and held that respondent could not be
compelled to take possession at such belated stage - Further,
appellant was directed to refund Rs.4,48,43,026 i.e. the amount
deposited by the respondent along with interest @ 10.7% S.I. p.a.
towards compensation - On appeal, held: The respondent-flat
purchaser made out a clear case of deficiency of service on the
part of the appellant-builder - Appellant failed to fulfill his
contractual obligation of obtaining the occupancy certificate and
offering possession of the flat to the respondent within the time
stipulated in the agreement, or within a reasonable time thereafter
- Respondent was justified in terminating the Apartment Buyer's
Agreement by filing the Consumer Complaint, and cannot be
compelled to accept the possession whenever it is offered by the
Builder - Respondent was legally entitled to seek refund of the money
deposited by him along with appropriate compensation -
Respondent had to also service a loan that he had obtained for
[2019] 5 S.C.R. 1169
1169
A
B
C
D
E
F
G
H
1170
SUPREME COURT REPORTS
[2019] 5 S.C.R.
purchasing the flat by paying interest @10% to the Bank - In the
circumstances, no illegality in the impugned order passed by the
National Commission - Haryana Real Estate (Regulation And
Development) Rules, 2017 - r.15.
Consumer Protection Act, 1986 - s.2(r) - Unfair and
unreasonable apartment buyer's agreement - Held: A term of a
contract will not be final and binding if it is shown that the flat
purchasers had no option but to sign on the dotted line, on a contract
framed by the builder - The contractual terms of the Buyer's
Agreement in the instant case was ex-facie one-sided, unfair and
unreasonable - The incorporation of such one-sided clauses in an
agreement constitutes an unfair trade practice as per s.2(r) of the
Consumer Protection Act since it adopts unfair methods or practices
for the purpose of selling the flats by the Builder.
Dismissing the appeals, the Court
HELD: 1. A term of a contract will not be final and binding
if it is shown that the flat purchasers had no option but to sign on
the dotted line, on a contract framed by the builder. The
contractual terms of the Agreement dated 08.05.2012 are exfacie one-sided, unfair, and unreasonable. The incorporation of
such one-sided clauses in an agreement constitutes an unfair trade
practice as per Section 2 (r) of the Consumer Protection Act,
1986 since it adopts unfair methods or practices for the purpose
of selling the flats by the Builder. This Court has no hesitation in
holding that the terms of the Apartment Buyer's Agreement
dated 08.05.2012 were wholly one-sided and unfair to the
Respondent-Flat Purchaser. The Appellant-Builder could not seek
to bind the Respondent with such one-sided contractual terms.
[Paras 6.7 and 7][1183-B-D]
2. In the present case, the National Commission has passed
an equitable Order. The Commission has not awarded any Interest
for the period during which the Order of stay of cancellation of
the allotment was in operation on the request of the RespondentFlat Purchaser. The Natio

## Text

A
B
C
D
E
F
G
H
1169
PIONEER URBAN LAND & INFRASTRUCTURE LTD.
v.
 GOVINDAN RAGHAVAN
(Civil Appeal No. 12238 of 2018)
APRIL 02, 2019
[UDAY UMESH LALIT AND INDU MALHOTRA, JJ.]
Consumer Protection Act, 1986 - s.23 - Deficiency of service
- Appellant-Builder launched a residential project and respondentflat purchaser entered into an Apartment Buyer's agreement to
purchase an apartment in the said project for a total sale
consideration of Rs.4,83,25,280/- - As per agreement, the appellant
was to apply for the occupancy certificate within 39 months from
the date of excavation with grace period of 180 days - However,
Appellant-builder failed to apply for occupancy certificate as per
agreement - Consumer complaint filed before the National
Commission - During the pendency of the proceedings, the appellant
obtained the occupancy certificate and pleaded National
Commission to direct the respondent to take possession of the flat -
However, the respondent refused to take possession as there was
an inordinate delay of almost 3 years - National Commission allowed
the consumer complaint and held that respondent could not be
compelled to take possession at such belated stage - Further,
appellant was directed to refund Rs.4,48,43,026 i.e. the amount
deposited by the respondent along with interest @ 10.7% S.I. p.a.
towards compensation - On appeal, held: The respondent-flat
purchaser made out a clear case of deficiency of service on the
part of the appellant-builder - Appellant failed to fulfill his
contractual obligation of obtaining the occupancy certificate and
offering possession of the flat to the respondent within the time
stipulated in the agreement, or within a reasonable time thereafter
- Respondent was justified in terminating the Apartment Buyer's
Agreement by filing the Consumer Complaint, and cannot be
compelled to accept the possession whenever it is offered by the
Builder - Respondent was legally entitled to seek refund of the money
deposited by him along with appropriate compensation -
Respondent had to also service a loan that he had obtained for
[2019] 5 S.C.R. 1169
1169
A
B
C
D
E
F
G
H
1170
SUPREME COURT REPORTS
[2019] 5 S.C.R.
purchasing the flat by paying interest @10% to the Bank - In the
circumstances, no illegality in the impugned order passed by the
National Commission - Haryana Real Estate (Regulation And
Development) Rules, 2017 - r.15.
Consumer Protection Act, 1986 - s.2(r) - Unfair and
unreasonable apartment buyer's agreement - Held: A term of a
contract will not be final and binding if it is shown that the flat
purchasers had no option but to sign on the dotted line, on a contract
framed by the builder - The contractual terms of the Buyer's
Agreement in the instant case was ex-facie one-sided, unfair and
unreasonable - The incorporation of such one-sided clauses in an
agreement constitutes an unfair trade practice as per s.2(r) of the
Consumer Protection Act since it adopts unfair methods or practices
for the purpose of selling the flats by the Builder.
Dismissing the appeals, the Court
HELD: 1. A term of a contract will not be final and binding
if it is shown that the flat purchasers had no option but to sign on
the dotted line, on a contract framed by the builder. The
contractual terms of the Agreement dated 08.05.2012 are exfacie one-sided, unfair, and unreasonable. The incorporation of
such one-sided clauses in an agreement constitutes an unfair trade
practice as per Section 2 (r) of the Consumer Protection Act,
1986 since it adopts unfair methods or practices for the purpose
of selling the flats by the Builder. This Court has no hesitation in
holding that the terms of the Apartment Buyer's Agreement
dated 08.05.2012 were wholly one-sided and unfair to the
Respondent-Flat Purchaser. The Appellant-Builder could not seek
to bind the Respondent with such one-sided contractual terms.
[Paras 6.7 and 7][1183-B-D]
2. In the present case, the National Commission has passed
an equitable Order. The Commission has not awarded any Interest
for the period during which the Order of stay of cancellation of
the allotment was in operation on the request of the RespondentFlat Purchaser. The National Commission has rightly awarded
Interest @10.7% S.I. p.a. by applying Rule 15 of the Haryana
Real Estate (Regulation And Development) Rules, 2017 from
A
B
C
D
E
F
G
H
1171
the date of each installment till 05.02.2017 i.e. till the date after
which the Order of stay of cancellation of the allotment was passed;
and thereafter, from the date of the Commission's final Order till
the date on which the amount is refunded with Interest.
[Para 8.1][1183-G-H; 1184-A-B]
3. There is no illegality in the Impugned Order dated
23.10.2018 passed by the National Commission. The AppellantBuilder failed to fulfill his contractual obligation of obtaining the
Occupancy Certificate and offering possession of the flat to the
Respondent-Purchaser within the time stipulated in the
Agreement, or within a reasonable time thereafter. The
Respondent-Flat Purchaser could not be compelled to take
possession of the flat, even though it was offered almost 2 years
after the grace period under the Agreement expired. During this
period, the Respondent-Flat Purchaser had to service a loan that
he had obtained for purchasing the flat, by paying Interest @10%
to the Bank. In the meanwhile, the Respondent-Flat Purchaser
also located an alternate property in Gurugram. In these
circumstances, the Respondent-Flat Purchaser was entitled to
be granted the relief prayed for i.e. refund of the entire amount
deposited by him with Interest. [Para 9][1184-B-E]
Lucknow Development Authority v. M.K. Gupta (1994)
1 SCC 243 : [1993] 3 Suppl. SCR 615; Fortune
Infrastructure & Anr. v. Trevor D'Lima & Ors. (2018) 5
SCC 442: [2018] 3 SCR 273 ; Central Inland Water
Transport Corporation Limited and Ors. v. Brojo Nath
Ganguly and Ors. (1986) 3 SCC 156 : [1986] 2 SCR
278 - relied on.
Bharathi Knitting Company v. DHL Worldwide Express
Courier Division of Airfreight Ltd. (1996) 4 SCC 704 :
[1996] 2 Suppl. SCR 653 ; Bangalore Development
Authority v. Syndicate Bank (2007) 6 SCC 711 :
[2007] 7 SCR 47 - referred to.
Case Law Reference
 [1996] 2 Suppl. SCR 653
 referred to Para 8
 [1993] 3 Suppl. SCR 615
 relied on
 Para 6.6
PIONEER URBAN LAND & INFRASTRUCTURE LTD. v.
GOVINDAN RAGHAVAN
A
B
C
D
E
F
G
H
1172
SUPREME COURT REPORTS
[2019] 5 S.C.R.
[2018] 3 SCR 273
 relied on
 Para 6.1
[1986] 2 SCR 278
 relied on
Para 6.1
[2007] 7 SCR 47
 referred to
Para 4.3
CIVIL APPELLATE JURISDICTION: Civil Appeal No.12238
of 2018.
From the Judgement and Order dated 23.10.2018 of the National
Disputes Redressal Commission in Consumer Complaint No.239 of 2017.
C.A. Sundram, Sr. Adv., Nikhil Nayyar, T.V. S. Raghavendra
Sreyas, Advs. For the Appellant.
Sushil Kasushik, Manoj Yadav, Himanshu Shekhar, Advs. For the
Respondents.
The Judgment of the Court was delivered by
INDU MALHOTRA, J. 1. The present statutory Appeals have
been filed under Section 23 of the Consumer Protection Act, 1986 to
challenge the Final Judgment and Order dated 23.10.2018 passed in
Consumer Case No. 238 of 2017 and Consumer Case No. 239 of 2017
by the National Consumer Disputes Redressal Commission (hereinafter
referred to as "the National Commission").
2. Since a common issue arises in both the Civil Appeals, they are
being disposed of by the present common Judgment and Order.
3. For the sake of brevity, the facts in C.A. No. 12238 of 2018
are being referred to, being the lead matter.
The factual matrix of the said Civil Appeal is as under :
3.1. The Appellant - Builder launched a residential project by the
name "Araya Complex" in Sector 62, Golf Course Extension
Road, Gurugram.
 The Respondent - Flat Purchaser entered into an Apartment
Buyer's Agreement dated 08.05.2012 with the Appellant -
Builder to purchase an apartment in the said project for a total
sale consideration of Rs. 4,83,25,280/-.
A
B
C
D
E
F
G
H
1173
 As per Clause 11.2 of the Agreement, the Appellant - Builder
was to make all efforts to apply for the Occupancy Certificate
within 39 months from the date of excavation, with a grace
period of 180 days.
3.2. The excavation of the project commenced on 04.06.2012. As
per Clause 11.2 of the Agreement, the Builder was required to
apply for the Occupancy Certificate by 04.09.2015, or within a
further grace period of 6 months i.e. by 04.03.2016, and offer
possession of the flat to the Respondent - Flat Purchaser.
 The Appellant - Builder however failed to apply for the
Occupancy Certificate as per the stipulations in the Agreement.
3.3. The Respondent - Flat Purchaser filed a Consumer Complaint
before the National Commission on 27.01.2017 alleging
deficiency of service on the part of the Appellant - Builder for
failure to obtain the Occupancy Certificate, and hand over
possession of the flat.
The Respondent prayed inter-alia for :-
Refund of the entire amount deposited being
Rs. 4,48,43,026/-, along with Interest @18% p.a.; and
Compensation of Rs. 10,00,000/- for mental agony, harassment,
discomfort and undue hardship; and
Refund of the wrongfully charged taxes including Service
Tax, and other charges along with Interest @18% p.a.; and
 Litigation Costs of Rs. 1,00,000/-.
3.4. On 06.02.2017, the National Commission passed an ex-parte
Interim Order restraining the Appellant - Builder from cancelling
the allotment made in favour of the Respondent - Flat Purchaser
during the pendency of the Consumer Case.
3.5. During the pendency of the proceedings before the National
Commission, the Appellant - Builder obtained the Occupancy
Certificate on 23.07.2018, and issued a Possession Letter to
the Respondent - Flat Purchaser on 28.08.2018.
PIONEER URBAN LAND & INFRASTRUCTURE LTD. v.
GOVINDAN RAGHAVAN [UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
1174
SUPREME COURT REPORTS
[2019] 5 S.C.R.
3.6. The Appellant - Builder submitted before the National
Commission that since the construction of the apartment was
complete, and the Occupancy Certificate had since been
obtained, the Respondent - Flat Purchaser must be directed to
take possession of the apartment, instead of directing refund of
the amount deposited.
3.7. The Respondent - Flat Purchaser however submitted that he
was not interested in taking possession of the apartment on
account of the inordinate delay of almost 3 years. The
Respondent - Flat Purchaser stated that he had, in the
meanwhile, taken an alternate property in Gurugram, and sought
refund of the entire amount of Rs. 4,48,43,026/- deposited by
him along with Interest @18% p.a.
3.8 The National Commission vide Final Judgment and Order dated
23.10.2018 allowed the Consumer Complaint filed by the
Respondent - Flat Purchaser, and held that since the last date
stipulated for construction had expired about 3 years before
the Occupancy Certificate was obtained, the Respondent - Flat
Purchaser could not be compelled to take possession at such a
belated stage.
 The grounds urged by the Appellant - Builder for delay in
handing over possession were not justified, so as to deny
awarding compensation to the Respondent - Flat Purchaser.
The clauses in the Agreement were held to be wholly one -
sided, unfair, and not binding on the Respondent - Flat Purchaser.
 The Appellant - Builder was directed to refund Rs. 4,48,43,026/
- i.e. the amount deposited by the Respondent - Flat Purchaser,
along with Interest @10.7% S.I. p.a. towards compensation.
The rate of Interest @10.7% S.I. p.a. was fixed in accordance
with Rule 15 of the Haryana Real Estate (Regulation and
Development) Rules, 2017 which reads as follows :
"15. An allottee shall be compensated by the promoter for
loss or damage sustained due to incorrect or false statement
in the notice, advertisement, prospectus or brochure in the
terms of Section 12. In case, allottee wishes to withdraw from
the project due to discontinuance of promoter's business as
A
B
C
D
E
F
G
H
1175
developers on account of suspension or revocation of the
registration or any other reason(s) in terms of clause (b) subsection (I) of Section 18 or the promoter fails to give
possession of the apartment/ plot in accordance with terms
and conditions of agreement for sale in terms of sub-section
(4) of section 19. The promoter shall return the entire amount
with interest as well as the compensation payable. The rate of
interest payable by the promoter to the allottee or by the allottee
to the promoter, as the case may be, shall be the State Bank of
India highest marginal cost of lending rate plus two percent.
..."
 (emphasis supplied)
However, for the period when the Interim Order dated 06.02.2017
was in operation, which restrained the Appellant - Builder from
cancelling the Respondent's allotment, no Interest was awarded.
The National Commission ordered payment of Interest from the
date of each installment till 05.02.2017; and from the date of the
Order passed by the Commission till the date on which the amount
would be refunded.
3.9. Aggrieved by the Order dated 23.10.2018 passed by the
National Commission, the Appellant - Builder preferred the
present statutory Appeal under Section 23 of the Consumer
Protection Act, 1986.
4. Mr. C.A. Sundaram, Senior Counsel appeared for the Appellant
- Builder, and drew our attention to the following Clauses in the Apartment
Buyer's Agreement dated 08.05.2012 viz. Clause 11.5 (ii), (iv) and (v)
along with Clause 20 which read as under :
"11.5. (ii) In the event of further delay by the Developer in
handing over of the possession of the Unit even after 12
months from the end of grace period, then in such case, the
intending Allottee shall have an additional option to terminate
this Agreement by giving termination notice of 90 days to the
Developer and refund of the actual installment paid by him
against the Unit after adjusting the taxes paid / interest /
penalty on delayed payments.
...
PIONEER URBAN LAND & INFRASTRUCTURE LTD. v.
GOVINDAN RAGHAVAN [UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
1176
SUPREME COURT REPORTS
[2019] 5 S.C.R.
(iv) Developer shall, within ninety (90) days from the date
of receipt of termination notice of said Unit, refund to the
intending Allottee, all the monies received excluding the service
tax collected on various remittances, till the date of the refund,
from the Intending Allottee under this Agreement. In case the
Developer fails to refund the Sale Price, the Developer shall
pay interest to the Intending Allottee @ 9% per annum for
any period beyond the said period of ninety (90) days. The
Intending Allottee shall have no other claim against the
Developer in respect of the said Unit along with the parking
space. The Intending Allottee in this event shall have no right
to seek any compensation apart from the interest as stipulated
herein.
...
(v) If the Intending Allottee fails to exercise his right of
termination within the time limit as aforesaid, by delivery to
the Developer of a written notice acknowledged by the
Developer in this regard, then he shall not be entitled to
terminate this Agreement thereafter and he shall continue to
be bound by the provisions of this Agreement, provided that
in such case, the Developer shall continue to pay the
compensation provided herein.
20. RIGHT OF CANCELLATION BY THE ALLOTTEE
Except to the extent specifically and expressly stated elsewhere
in this Agreement, the Intending Allottee shall have the right
to cancel this Agreement solely in the event of the clear and
unambiguous failure of the warranties of the Developer that
leads to frustration of the contract on that account. In such
case, the Allottee shall be entitled to a refund of the installments
actually paid by it along with interest thereon @ 6% per
annum, within a period of 90 days from the date of
communication to the Developer in this regard less any
payments made towards taxes paid by the Developer or interest
paid due or payable, any other amount of a non-refundable
nature. No other claim, whatsoever, monetary or otherwise
shall lie against the Developer nor shall be raised otherwise
A
B
C
D
E
F
G
H
1177
or in any manner whatsoever by the Allottee. Save and except
to this limited extent, the Allottee shall not have any right to
cancel this Agreement on any ground whatsoever."
 (emphasis supplied)
4.1. It was submitted that the Respondent - Flat Purchaser was not
entitled to refund of the amount deposited, since the Apartment
Buyer's Agreement was not terminated by the Respondent -
Flat Purchaser in accordance with Clause 11.5 (ii) of the
Agreement, which stipulates that the allottee has to terminate
the Agreement by giving a Termination Notice of 90 days to
the Developer.
 Since the Respondent - Flat Purchaser had not terminated the
Agreement by a written notice as per Clause 11.5, the Builder
could not sell the apartment, and refund the money to the
Respondent - Flat Purchaser. On the contrary, the Respondent
filed a Consumer Complaint and obtained an ex-parte Interim
Order dated 06.02.2017 restraining the Builder from cancelling
the allotment made in favour of the Respondent.
4.2. It was further submitted that if the filing of the Consumer
Complaint is considered as an act of termination of the
Agreement, then the same was pre-mature. As per Clause 11.5
(ii), the Respondent - Flat Purchaser could have claimed refund
only after the expiry of 12 months after the grace period came
to an end i.e. after 04.03.2017. However, the Consumer
Complaint was filed on 27.01.2017. In these circumstances,
even if it is found that the Appellant - Builder is liable to refund
the amount deposited with Interest, then the date of the
Impugned Order i.e. 23.10.2018, must be treated as the date of
serving the Termination Notice as per Clause 11.5 (ii) of the
Agreement, and the Appellant - Builder should be held liable to
pay Interest only after 90 days from the date of termination i.e.
from 23.01.2019.
4.3. With respect to rate of Interest awarded by the National
Commission, it was submitted that the Commission erred in
granting Interest @10.7% S.I. p.a. even though Clause 20 of
PIONEER URBAN LAND & INFRASTRUCTURE LTD. v.
GOVINDAN RAGHAVAN [UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
1178
SUPREME COURT REPORTS
[2019] 5 S.C.R.
the Agreement provided Interest @6% p.a. in case of delay in
handing over possession. Even under Clause 11.5 of the
Agreement, the Builder was liable to pay Interest @9% p.a.,
but not @10.7% S.I. p.a. The learned Senior Counsel relied
upon this Court's Judgment in Bharathi Knitting Company v.
DHL Worldwide Express Courier Division of Airfreight Ltd.,1
and submitted that the National Commission could not have
granted compensation in excess of the rate prescribed by the
Agreement.
5. Mr. Sushil Kaushik, learned Counsel represented the Respondent
- Flat Purchaser.
5.1. It was submitted that the filing of the Consumer Complaint may
be treated as his Termination Notice under Clause 11.5 (ii) of
the Agreement. Under the Agreement, the Builder was obligated
to apply for the Occupancy Certificate within 39 months from
the date of excavation, with a grace period of further 6 months.
The period got over by 04.03.3016 after taking into account the
grace period.
Admittedly, the Appellant - Builder offered possession after an
inordinate delay of almost 3 years on 28.08.2018. On account
of the inordinate delay, the Respondent - Flat Purchaser had
no option but to arrange for alternate accommodation in
Gurugram. Hence, he could not be compelled to take possession
of the apartment after such a long delay.
It was in these circumstances that the Respondent - Flat
Purchaser sought stay of the cancellation of the allotment as a
collateral, till his claim for refund was adjudicated by the National
Commission.
5.2. It was further submitted that the Clauses of the Agreement were
one-sided. As per Clause 6.4 (ii) of the Apartment Buyer's
Agreement, the Appellant Builder could charge Interest @18%
p.a. for delayed payments.
However, the Appellant - Builder was not required to pay
equivalent Interest to the Respondent - Flat Purchaser for delay
in handing over possession of the flat.
1(1996) 4 SCC 704.
A
B
C
D
E
F
G
H
1179
On the contrary, as per Clause 11.5 (iv) of the Agreement, in
case of delay on the part of the Appellant - Builder in handing
over possession of the flat, the Respondent - Flat Purchaser
was entitled to Interest @9% p.a. only.
5.3. The Respondent further submitted that the National Commission
had ordered payment of Interest as per the statutory Rules i.e.
Rule 15 of the Haryana Real Estate (Regulation and
Development) Rules, 2017 @10.7% S.I. p.a.
 The Respondent - Flat Purchaser submitted that he had obtained
a loan for Rs. 3,30,00,000/- from Standard Chartered Bank to
purchase the flat in question, and had entered into a Tripartite
Loan Agreement with the Bank and the Builder. The Respondent
- Flat Purchaser had to pay Interest @10% p.a. for servicing
the loan for the entire period. Hence, Interest @10.7% S.I.
p.a. awarded by the National Commission was just and fair.
 It was pointed out that even though the National Commission
had not granted Interest for the period during which the Order
of stay of cancellation of the allotment was in operation, the
Respondent - Flat Purchaser had to pay Interest to the Bank
even for this period.
5.4. The Respondent - Flat Purchaser submitted that the present
Appeal be dismissed, and the Builder be directed to pay the
amount awarded by the National Commission with Interest,
within 1 week, so that the Respondent can discharge his loan
liability.
6. We have heard the learned Counsel for both the parties, and
perused the pleadings, and written submissions filed.
6.1. In the present case, admittedly the Appellant - Builder obtained
the Occupancy Certificate almost 2 years after the date
stipulated in the Apartment Buyer's Agreement. As a
consequence, there was a failure to hand over possession of
the flat to the Respondent - Flat Purchaser within a reasonable
period. The Occupancy Certificate was obtained after a delay
of more than 2 years on 28.08.2018 during the pendency of the
proceedings before the National Commission.
PIONEER URBAN LAND & INFRASTRUCTURE LTD. v.
GOVINDAN RAGHAVAN [UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
1180
SUPREME COURT REPORTS
[2019] 5 S.C.R.
 In Lucknow Development Authority v. M.K. Gupta,2this Court
held that when a person hires the services of a builder, or a
contractor, for the construction of a house or a flat, and the
same is for a consideration, it is a "service" as defined by Section
2 (o) of the Consumer Protection Act, 1986. The inordinate
delay in handing over possession of the flat clearly amounts to
deficiency of service.
 In Fortune Infrastructure & Anr. v. Trevor D'Lima & Ors.,3
this Court held that a person cannot be made to wait indefinitely
for possession of the flat allotted to him, and is entitled to seek
refund of the amount paid by him, along with compensation.
6.2. The Respondent - Flat Purchaser has made out a clear case of
deficiency of service on the part of the Appellant - Builder.
The Respondent - Flat Purchaser was justified in terminating
the Apartment Buyer's Agreement by filing the Consumer
Complaint, and cannot be compelled to accept the possession
whenever it is offered by the Builder. The Respondent -
Purchaser was legally entitled to seek refund of the money
deposited by him along with appropriate compensation.
6.3. The National Commission in the Impugned Order dated
23.10.2018 held that the Clauses relied upon by the Builder
were wholly one-sided, unfair and unreasonable, and could not
be relied upon.
 The Law Commission of India in its 199th Report, addressed
the issue of 'Unfair (Procedural & Substantive) Terms in
Contract'. The Law Commission inter-alia recommended that
a legislation be enacted to counter such unfair terms in contracts.
In the draft legislation provided in the Report, it was stated
that :
"A contract or a term thereof is substantively unfair if such
contract or the term thereof is in itself harsh, oppressive
or unconscionable to one of the parties."
6.4. A perusal of the Apartment Buyer's Agreement dated 08.05.2012
reveals stark incongruities between the remedies available to
both the parties.
2 (1994) 1 SCC 243.
3(2018) 5 SCC 442.
A
B
C
D
E
F
G
H
1181
 For instance, Clause 6.4 (ii) of the Agreement entitles the
Appellant - Builder to charge Interest @18% p.a. on account
of any delay in payment of installments from the Respondent -
Flat Purchaser.
 Clause 6.4 (iii) of the Agreement entitles the Appellant - Builder
to cancel the allotment and terminate the Agreement, if any
installment remains in arrears for more than 30 days.
 On the other hand, as per Clause 11.5 of the Agreement, if the
Appellant - Builder fails to deliver possession of the apartment
within the stipulated period, the Respondent - Flat Purchaser
has to wait for a period of 12 months after the end of the grace
period, before serving a Termination Notice of 90 days on the
Appellant - Builder, and even thereafter, the Appellant - Builder
gets 90 days to refund only the actual installment paid by the
Respondent - Flat Purchaser, after adjusting the taxes paid,
interest and penalty on delayed payments. In case of any delay
thereafter, the Appellant - Builder is liable to pay Interest @9%
p.a. only.
6.5. Another instance is Clause 23.4 of the Agreement which entitles
the Appellant - Builder to serve a Termination Notice upon the
Respondent - Flat Purchaser for breach of any contractual
obligation. If the Respondent - Flat Purchaser fails to rectify
the default within 30 days of the Termination Notice, then the
Agreement automatically stands cancelled, and the Appellant
- Builder has the right to forfeit the entire amount of Earnest
Money towards liquidated damages.
 On the other hand, as Clause 11.5 (v) of the Agreement, if the
Respondent - Flat Purchaser fails to exercise his right of
termination within the time limit provided in Clause 11.5, then
he shall not be entitled to terminate the Agreement thereafter,
and shall be bound by the provisions of the Agreement.
6.6. Section 2 (r) of the Consumer Protection Act, 1986 defines
'unfair trade practices' in the following words :
"'unfair trade practice' means a trade practice which, for the
purpose of promoting the sale, use or supply of any goods or
PIONEER URBAN LAND & INFRASTRUCTURE LTD. v.
GOVINDAN RAGHAVAN [UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
1182
SUPREME COURT REPORTS
[2019] 5 S.C.R.
for the provision of any service, adopts any unfair method or
unfair or deceptive practice ...",and includes any of the
practicesenumerated therein. The provision is illustrative, and not
exhaustive.
In Central Inland Water Transport Corporation Limited and
Ors. v. Brojo Nath Ganguly and Ors.,4this Court held that :
 "89. ... Our judges are bound by their oath to 'uphold the
Constitution and the laws'. The Constitution was enacted to
secure to all the citizens of this country social and economic
justice. Article 14 of the Constitution guarantees to all persons
equality before the law and equal protection of the laws. This
principle is that the courts will not enforce and will, when
called upon to do so, strike down an unfair and unreasonable
contract, or an unfair and unreasonable clause in a contract,
entered into between parties who are not equal in bargaining
power. It is difficult to give an exhaustive list of all bargains
of this type. No court can visualize the different situations
which can arise in the affairs of men. One can only attempt
to give some illustrations. For instance, the above principle
will apply where the inequality of bargaining power is the
result of the great disparity in the economic strength of the
contracting parties. It will apply where the inequality is the
result of circumstances, whether of the creation of the parties
or not. It will apply to situations in which the weaker party is
in a position in which he can obtain goods or services or
means of livelihood only upon the terms imposed by the
stronger party or go without them. It will also apply where a
man has no choice, or rather no meaningful choice, but to
give his assent to a contract or to sign on the dotted line in a
prescribed or standard form or to accept a set of rules as
part
of the contract, however unfair, unreasonable and
unconscionable a clause in that contract or form or rules
may be. This principle, however, will not apply where the
bargaining power of the contracting parties is equal or almost
equal. This principle may not apply where both parties are
businessmen and the contract is a commercial transaction. ...
...
4(1986) 3 SCC 156
A
B
C
D
E
F
G
H
1183
These cases can neither be enumerated nor fully illustrated.
The court must judge each case on its own facts and
circumstances."
 (emphasis supplied)
6.7. A term of a contract will not be final and binding if it is shown
that the flat purchasers had no option but to sign on the dotted
line, on a contract framed by the builder.
 The contractual terms of the Agreement dated 08.05.2012 are
ex-facie one-sided, unfair, and unreasonable. The incorporation
of such one-sided clauses in an agreement constitutes an unfair
trade practice as per Section 2 (r) of the Consumer Protection
Act, 1986 since it adopts unfair methods or practices for the
purpose of selling the flats by the Builder.
7. In view of the above discussion, we have no hesitation in holding
that the terms of the Apartment Buyer's Agreement dated 08.05.2012
were wholly one-sided and unfair to the Respondent - Flat Purchaser.
The Appellant - Builder could not seek to bind the Respondent with
such one-sided contractual terms.
8. We also reject the submission made by the Appellant - Builder
that the National Commission was not justified in awarding Interest
@10.7% S.I. p.a. for the period commencing from the date of payment
of each installment, till the date on which the amount was paid, excluding
only the period during which the stay of cancellation of the allotment
was in operation.
In Bangalore Development Authority v. Syndicate Bank,5 a
Coordinate Bench of this Court held that when possession of the allotted
plot/flat/house is not delivered within the specified time, the allottee is
entitled to a refund of the amount paid, with reasonable Interest thereon
from the date of payment till the date of refund.
8.1. In the present case, the National Commission has passed an
equitable Order. The Commission has not awarded any Interest
for the period during which the Order of stay of cancellation of
the allotment was in operation on the request of the Respondent
- Flat Purchaser.
PIONEER URBAN LAND & INFRASTRUCTURE LTD. v.
GOVINDAN RAGHAVAN [UDAY UMESH LALIT, J.]
5(2007) 6 SCC 711.
A
B
C
D
E
F
G
H
1184
SUPREME COURT REPORTS
[2019] 5 S.C.R.
 The National Commission has rightly awarded Interest @10.7%
S.I. p.a. by applying Rule 15 of the Haryana Real Estate
(Regulation And Development) Rules, 2017 from the date of
each installment till 05.02.2017 i.e. till the date after which the
Order of stay of cancellation of the allotment was passed; and
thereafter, from the date of the Commission's final Order till
the date on which the amount is refunded with Interest.
9. We see no illegality in the Impugned Order dated 23.10.2018
passed by the National Commission. The Appellant - Builder failed to
fulfill his contractual obligation of obtaining the Occupancy Certificate
and offering possession of the flat to the Respondent - Purchaser within
the time stipulated in the Agreement, or within a reasonable time
thereafter. The Respondent - Flat Purchaser could not be compelled to
take possession of the flat, even though it was offered almost 2 years
after the grace period under the Agreement expired. During this period,
the Respondent - Flat Purchaser had to service a loan that he had obtained
for purchasing the flat, by paying Interest @10% to the Bank. In the
meanwhile, the Respondent - Flat Purchaser also located an alternate
property in Gurugram. In these circumstances, the Respondent - Flat
Purchaser was entitled to be granted the relief prayed for i.e. refund of
the entire amount deposited by him with Interest.
10. The Civil Appeals are accordingly dismissed, and the Final
Judgment and Order dated 23.10.2018 passed by the National Consumer
Disputes Redressal Commission is affirmed. The appellant is granted a
period of three months from today to refund the amount to the respondent.
All pending Applications, if any, are accordingly disposed of.
Ankit Gyan
 Appeals dismissed.