Holding

The Supreme Court disposed the appeals by confirming the parties' agreed settlement, directing interest at 9% and refunds as per the chart, thereby upholding the earlier Himanshu Arora principles.

Summary

DLF Homes Panchkula Ltd. (the developer) was sued by numerous apartment buyers for delayed possession and deficiency in service under the Consumer Protection Act, 1986. The State Consumer Disputes Redressal Commission ordered refunds of amounts paid with interest (15% in some cases) and compensation. The developer appealed to the National Consumer Disputes Redressal Commission, which affirmed the State Commission’s orders. The developer challenged the NCDRC proceedings on the ground that the bench lacked a judicial member, leading to a review, a petition under Art. 227, and a stay by the High Court, which the Supreme Court subsequently stayed. The Supreme Court, after hearing, accepted the parties’ agreed settlement based on principles laid down in the Himanshu Arora case, directing interest at 9% on refunds and compensation, and ordered the payment of amounts as per a detailed chart. All the appeals were disposed of in accordance with this settlement.

Issues considered

Whether the National Consumer Disputes Redressal Commission can entertain an appeal in the absence of a judicial member on the bench.
How interest should be computed on refunds and compensation for delayed possession under the Consumer Protection Act.
Whether the Supreme Court can stay the High Court's order staying the NCDRC judgment.
Whether the settlement principles from the Himanshu Arora case are applicable to the present batch of appeals.
Determination of the entitlement of heirs of a deceased allottee to the deposited amount.

Legislation cited

Consumer Protection Act, 1986

Subjects

consumer protectiondeficiency in servicedelayed possessioninterest calculationrefundsettlementNCDRCjudicial memberArticle 227Supreme Court

Judgment

[2019] 2 S.C.R. 739 739

DLF HOMES PANCHKULA (P) LTD. THROUGH A
ITS AUTHORISED SIGNATORY MR. SHIV KUMAR
v.
SUSHILA DEVI AND ANR. ETC.
(Civil Appeal Nos. 2285-2330 of 2019)
B
FEBRUARY 26, 2019
[UDAY UMESH LALIT AND HEMANT GUPTA, JJ.]
Consumer Protection Act, 1986:
Complaint of deficiency in service – Against the developer of
property – Alleging delayed delivery of possession of apartments – C
Some of the complainants sought refund of all the money they had
paid while others sought compensation for delayed delivery with
possession of the apartment – State Consumer Disputes Redressal
Commission allowing the complaints directed refund of deposited
amounts with interest @ 15% p.a. and with lesser rate in others and D
compensation – Similar directions were passed in cases of delayed
delivery of possession – Appeal filed before National Consumer
Disputes Redressal Commission by the Developer – The Developer
however objected that the appeals could not be proceeded with as
there was not even one Judicial Member on the Bench – National
E
Commission reserved the matters for orders by its order dated
1.8.2018 – Review petition filed by the Developer was rejected by
order dated 8.8.2018 – In petition u/Art.227 of the Constitution
against the orders dated 1.8.2018 and 8.8.2018, High Court stayed
the operation of the order of the National Commission – Thereafter,
National Commission passed reasoned judgment on 7.9.2018 F
affirming the order of State Commission – However, in view of the
stay order of the High Court, it observed that judgment dated
7.9.2018 would remain stayed till further orders by High Court –
Present appeals by the Developers as well as some of the
complainants – Held: All the parties agreed for disposal of the cases G
in terms of understanding as per the governing principles set out –
Matter disposed of on the agreed understanding as settled by the
parties.

H
739
740 SUPREME COURT REPORTS [2019] 2 S.C.R.

A CIVIL APPELLATE JURISDICTION : Civil Appeal
Nos. 2285-2330 of 2019.
From the Judgment and Order dated 07.09.2017 of the National
Consumer Disputes Redressal Commission, New Delhi in First Appeal
Nos. 382, 447, 879, 881, 648, 649, 650, 651, 982, 1145, 1146, 1147, 1315,
767, 1158, 1347, 1348, 1349, 1351, 1352, 1576, 1577, 1579, 1580, 1581,
B
1582, 1583, 1584, 1586, 1587, 1589, 1590, 1591, 1592, 1593, 1594, 1595,
1598, 1601, 1623, 1578, 1599, 1600, 1622, 1625 of 2016, 1643, 453 and
638 of 2017.
WITH
Special Leave Petition (Civil) Nos.931, 939 and 968 of 2019,
C Civil Appeal No.2354 of 2019.
Pinaki Misra, Sr. Adv., Amarjeet Singh, Narender Yadav, R. N.
Karanjawala, Ms. Ruby Singh Ahuja, Ms. Deepti Sarin, Nakul Gandhi,
Sahil Monga, Ms. Manik Karanjawala, Ms. Kanika Agnihotri, Ms. Seema
Sundd, Pravin Bahadur, Saurabh Kumar, Prabhat Ranjan, Aditya Singh,
D Ms. Swikriti Singhania, Alabhay D., Ms. Shreyansi Goel, Kartik Nayar,
M/s. Karanjawala & Co., Ranbir Singh Yadav, Puran Mal Saini,
Ms. Anzu K. Verkey, Pati Raj Yadav, B. Rajesh, Ankur Bansal, Anuj
Arora, Dr. M. K. Ravi, Ms. Aruna Tilekar, Ms. Priya Puri, Ms. Vineeta
Meghrajani, Anand S. Jha, Md. Ali, Ankit Gupta, Akash Vashisth, Ranvijay
Singh, Siddharth Mittal, Hari Om Yaduvanshi, Dr. Monika Gusain, Sandeep
E Chhabra, Jinendra Jain, Dinesh Chander Trehan, Ms. Astha Tyagi, Rajesh
Kumar Chaurasia, Sudhir Kathapalia, Anant Agarwal, Ms. Sweta Rani,
Siddharth Batra, Nikhlesh, Naveen Sheokand, Ashok Kashyap, Vishwa
Pal Singh, Nikilesh Ramachandran, Advs. for the appearing parties.
The Judgment of the Court was delivered by
F UDAY UMESH LALIT, J. 1. Leave granted in all matters,
except Special Leave Petition (Civil) Nos.931 of 2019, 939 of 2019 and
968 of 2019.
Re: Appeals arising out of Special Leave Petition (Civil) Nos.928-976
of 20191 (DLF Homes Panchkula (P) Ltd. Through its Authorised
Signatory Mr. Shiv Kumar v. Sushila Devi and another2
G
2. These appeals are directed against the final judgment and order
dated 07.09.2018 passed by the National Consumer Disputes Redressal
Commission, New Delhi (hereinafter referred to as ‘the National
Commission’) in First Appeal Nos.382/2016, 447/2016, 453/2017,
1
[Except Special Leave Petition (Civil) Nos.931 of 2019, 939 of 2019 and 968 of 2019]
2
H (Appeals by the Developer)
DLF HOMES PANCHKULA (P) LTD. v. SUSHILA DEVI 741
[UDAY UMESH LALIT, J. ]

648/2016, 649/2016, 650/2016, 651/2016, 767/2016, 879/2016, 881/2016, A
1145/2016, 1146/2016, 1147/2016, 1158/2016, 1315/2016, 1347/2016, 1348/
2016, 1349/2016, 1351/2016, 1352/2016, 1576/2016, 1577/2016, 1578/
2016, 1579/2016, 1580/2016, 1581/2016, 1582/2016, 1583/2016, 1584/
2016, 1586/2016, 1587/2016, 1589/2016, 1590/2016, 1591/2016, 1592/
2016, 1593/2016, 1594/2016, 1595/2016, 1598/2016, 1599/2016, 1600/
B
2016, 1601/2016, 1622/2016, 1623/2016, 1625/2016 and 1643/2017.
3. The original complainants had booked apartments in a project
titled “DLF Valley, Panchkula” situated in Panchkula, Haryana, which
was to be developed by the Developer. The Developer had promised to
handover possession within 24 months from the date of signing of the
agreement. Various complaints came to be filed by the Complainants C
submitting that despite period of two years being over there was no
substantial progress and as such, the Developer was deficient in rendering
service. Some of the Complainants prayed for refund of all the moneys
they had deposited from time to time along with interest and compensation
while others sought relief in the nature of compensation for delayed D
delivery of possession but insisted that the possession of the apartments
be handed over to them.
4. The State Consumer Disputes Redressal Commission, UT,
Chandigarh (hereinafter referred to as ‘the State Commission’) by its
various orders allowed the complaints and directed refund of the amounts
deposited by the concerned Complainants with interest @ 15% per annum E
in some cases and with lesser rate in others and compensation. Similar
directions were passed in cases of delayed delivery of possession. These
orders passed by the State Commission were challenged by the Developer
by filing aforementioned First Appeals in the National Commission which
were disposed of by the National Commission vide its common order F
dated 07.09.2018. The National Commission affirmed the view taken
by the State Commission and dismissed all the appeals. Aggrieved
thereby the present appeals by special leave were filed by the Developer.
Re: Appeal arising out of Special Leave Petition (Civil) No.26519
of 2018 (Ravi Datt Aggarwal and others v. DLF Homes Panchkula
Pvt. Ltd. and others3 G

3
Appeals by original Complainants H
742 SUPREME COURT REPORTS [2019] 2 S.C.R.

A 5. While the appeals as aforesaid were pending before the National
Commission, it was submitted by the Developer that there had to be at
least one Judicial Member on the Bench and in cases where there was
not even one Judicial Member on the Bench, the appeals could not and
ought not to be proceeded with. After hearing all submissions, the
National Commission by its order dated 01.08.2018 reserved the matters
B
for orders. Thereafter, Review Petitions were filed by the Developer
which were rejected on 08.08.2018. The Developer then filed a petition
under Article 227 of the Constitution being CM(M)No.951 of 2018 in
the High Court of Delhi questioning said orders dated 01.08.2018 and
08.08.2018. While issuing notice, the High Court by its order dated
C 20.08.2018 stayed the operation of the order dated 08.08.2018 passed
by the National Commission. The National Commission, thereafter,
passed a reasoned judgment on 07.09.2018 rejecting all the submissions.
However, in view of the fact that the order dated 08.08.2018 was stayed
by the High Court, it observed that the operation of the Judgment dated
07.09.2018 would remain stayed till further orders by the High Court.
D
6. Some of the Complainants, being aggrieved, approached this
Court by filing Special Leave Petition (c)No.26519 of 2018 in which,
while issuing notice on 22.10.2018, this Court stayed the operation of the
order dated 20.08.2018 passed by the High Court.
7. Thereafter, the appeals filed by the Developer and the
E Complainants were taken-up together.
8. It may be mentioned that matters where the Developer had
challenged similar directions issued in other cases namely Civil Appeal
Nos. 11097-11138 of 2018, were disposed of by this Court on 19.11.2018.
In those cases, (Himanshu Arora case, for short) the State Commission
F had awarded interest @ 12% which was reduced by the National
Commission to 9%. After hearing learned counsel for both sides, this
Court had passed following directions: -
“8. Having regard to the above submission, we indicated to the
learned counsel appearing on behalf of the flat purchasers that it
G would be appropriate if the interest as ordered by NCDRC at 9%
per annum is made payable over the period which was determined
by the Order of the SCDRC. There is no objection by the flat
purchasers to the aforesaid modification being made. Even
otherwise, we are of the view that such a modification would be

H
DLF HOMES PANCHKULA (P) LTD. v. SUSHILA DEVI 743
[UDAY UMESH LALIT, J. ]

required in the interests of justice since it was the appellants who A
had questioned the Order of the SCDRC before the NCDRC.
9. In the above facts and circumstances, we confirm the direction
of the NCDRC that the appellants shall pay interest @ 9 per cent
per annum. However, the period over which interest shall be
payable will be in conformity with the order passed by the SCDRC. B
10. We also direct that in computing the interest payable in terms
of the Order of the NCDRC to the extent modified above, the
appellants would be entitled to credit for the compensation, if any,
which has been paid to any flat buyer in terms of Clause 15 of the
flat purchase agreements. In other words, the amount of interest
payable shall be computed after deducting any amount that has C
been paid to the concerned flat buyer under Clause 15 of the
agreement.
11. The amount which has been deposited in this Court in
pursuance of the order dated 18.5.2018, shall be transferred by
the Registry to the Registrar of the SCDRC, Chandigarh. The D
appellants shall, within a period of two weeks from today, file a
detailed computation with reference to each of the flat buyers
and the amount which is due and payable in pursuance of the
above directions. The amount shall be duly verified before
disbursal, on proper identification, to each of the flat buyers. After E
completing the above exercise, in the event, that any amount
(inclusive of the accrued interest) remains surplus, it shall be
refunded to the appellants.
12. Upon the transfer of the amount, the SCDRC shall keep the
amount in a short term fixed deposit until the stage of disbursement
is reached. F
The civil appeals are disposed of.”
9. When the present appeals were taken up, all the parties agreed
that these appeals be disposed of in terms with the directions issued by
this Court in Himanshu Arora’s case. We, therefore, directed the
Developer to file a Chart in consultation with all the complainants and G
indicate what modalities be adopted. After such Chart was filed, it was
agreed that wherever compensation was to be awarded, it should be in
the form of interest @ 9% and the governing principles be as under:-

H
744 SUPREME COURT REPORTS [2019] 2 S.C.R.

A (a) In all Refund cases, the award of interest @ 9% would be
payable in respect of deposits from the day they were made till
the date of refund.
(b) In cases where, upon transfer, a subsequent purchaser had
stepped into the shoes of the original allottee and had prayed for
B Refund, the reckoning date for computing the interest be from the
date of his transfer in respect of all the amounts that were deposited
by the original allottee and if any subsequent deposits were made
by the transferee, from the dates of such deposits;
(c) In cases where Possession was sought, the period available
to the Developer under the agreement being three years (that is
C to say original period of two years which was extendable, at the
option of the Developer, by further period of one year) ought not
to be computed while calculating compensation in the form of
interest. Therefore, the period to be reckoned shall be after expiry
of three years from the date of agreement and in respect of such
D period the compensation shall be at the same rate of 9%.
(d) In Possession cases, if there was any transfer and the
transferee had stepped into the shoes of the original allottee, the
compensation shall be paid from the date of expiry of three years
from the agreement as aforesaid or from the date of transfer,
E whichever is later.
10. The matter was, thereafter, adjourned so that the parties could
check and reconcile all the concerned amounts and present a mutually
acceptable statement of figures. Accordingly, the Chart has been
presented which is appended to this Judgment as Annexure-A.
11. Column No.13 of the tabulated chart denotes element of interest
F
@ 9% while Column No.16 denotes the amount that had been received
by the Developer. Column No.14 shows the amounts of FDRs deposited
by the Developer in respect of every Complainant, while Column No.17
shows amount payable to every Complainant or recoverable from such
Complainant wherever excess amount was deposited. According to the
G Chart, Serial Nos.1 to 17 are Refund cases where Possession was not
prayed for. Out of these 17 cases, those at serial nos. 9 and 16 were
already settled and as such their cases4 shall not form part of this group
of appeals. Case at serial no.17 was a transfer case in the category of

4
H SLP (C) No. 931 and 939 of 2019
DLF HOMES PANCHKULA (P) LTD. THR. ITS AUTH. SIG. 745
MR. SHIV KUMAR v. SUSHILA DEVI [UDAY UMESH LALIT, J. ]

Refund cases and as such would be governed by principle (b) as stated A
hereabove. Rest of the cases in the Refund category will be governed
by principle (a) stated hereinabove except the case of Colonel Naresh
Kumar Kohli, whose name is at Serial No.14 which will be subject to
modification as stated hereafter.
12. According to Colonel Kohli, the fact that he had deposited B
Rs.62,04,014/- was not disputed at any juncture either before the State
Commission or the National Commission and in fact FDR in that sum
already stood deposited by the Developer. However, in his case
Column No.16 wrongly mentioned figure of Rs.60,54,812/- and
consequently the amount payable in Column No.17 was wrongly shown
as Rs.24,60,356/-. We heard learned counsel for the Developer and C
Colonel Kohli on this issue and find that the submission made by Colonel
Kohli deserves acceptance. We, therefore, correct the figures in Column
Nos.16 and 17 to be Rs.62,04,014/- and Rs.26,09,558/- respectively. He
shall be entitled, over and above the amount deposited in FD namely
Rs.62,04,014/-, an amount of Rs.26,09,558/- as well. D
13. We now turn to Possession cases which are tabulated from
serial nos. 18 to 48 (except case at serial no. 32). Let the case of
Mr. Gautam Kashyup at Serial No.32, namely Special Leave Petition
(Civil)No. 968 of 2019 be listed before a regular Court. All other matters
in Possession category stand disposed of in terms of the directions (c)
and (d) as issued above. E
14. Except to the extent any exception or modification stated in
this Judgment every person in Refund and Possession categories is
aggregable to the disposal of their matters in terms of the understanding
as above and the governing principles set out earlier.
15. It is directed that, on the strength of this order and upon proper F
identification to the satisfaction of the State Commission, the amounts
standing in Fixed Deposit Receipts against each of the Complainant along
with interest, if any, accrued thereon be made over to said complainant
within six weeks from today. We also direct the Developer to make
over to each complainant the amount in Column No.17 marked as G
“Amount Recoverable/Payable” within six weeks. In two cases i.e. in
appeals arising out of Special Leave Petition (Civil)Nos.928 of 2019 and
936 of 2019 where the excess amount has been deposited, the Developer

H
746 SUPREME COURT REPORTS [2019] 2 S.C.R.

A will be entitled to have such excess amount recovered from the amounts
presently lying in deposit.
16. In respect of the matter at serial No.8 relating to original
allottee named Arun Yadav, certain additional directions are called for.
Said original allottee is no more. While making the booking he had
B mentioned the name of his wife as a nominee. He has left behind his
widow, two children and mother. The widow and the mother are
individually claiming refund of the amount deposited by him. At this
stage, the entitlement of either side cannot be gone into and the parties
must be left to agitate this issue in a properly instituted matter before a
C competent court. However, considering the fact that the mother, the
widow and two children, going by normal law relating to intestate
succession for Hindus, would share the property of the deceased person
equally, we direct ¾ of the sum to be made over to the widow who shall
take said sum for herself and on behalf of two children while the
remaining ¼ of the sum shall be made over to the mother. They must
D
however execute indemnity bonds agreeing to return the sum that they
had received in whole or in part, in case a declaration as to their
entitlement by a competent court were to go against them.
17. Since, the matters are being disposed of on an agreed
understanding and since no order of compensation was passed in
E
Himanshu Arora, no compensation other than what has been dealt with
earlier, need be paid to the Complainants.
18. Finally, we direct:-
(a) SLP(C) Nos.931 and 939 of 2019 stand disposed of as having
F been settled by the parties.
(b) SLP(C) No.968 of 2019 be listed for consideration before
appropriate Bench in due course.
(c) All the appeals stand disposed of in terms indicated above.
(d) No costs.
G

H
DLF HOMES PANCHKULA (P) LTD. THR. ITS AUTH. SIG. 747
MR. SHIV KUMAR v. SUSHILA DEVI [UDAY UMESH LALIT, J. ]

A

B

C

D

E

F

G

H
748 SUPREME COURT REPORTS [2019] 2 S.C.R.

A

B

C

D

E

F

G

H Kalpana K. Tripathy Appeals disposed of.