Civil Appeal No(s). 3533-3534 0f 2017
Facts of the case:
In 2011, M/s Fortune Infrastructure had launched a residential housing project under the name “Hicons Onyx” AKA Fortune Residency in which the respondent booked a flat by paying a sale consideration amount of Rs 1,87,00,000/-. The appellant transferred the construction project to another company, M/s Zoy Shelcon Pvt. Ltd. because the former company could not suffice the cost of construction. In 2015, a consumer complaint was filed in the National Consumer Disputes Redressal Commission (NCDRC) against the appellant (M/s Fortune Infrastructure) as they failed to deliver the flat to the aggrieved party. The NCDRC held the appellant liable and ordered the appellant to (a) refund the amount of sale consideration, (b) as compensation to pay a sum of Rs. 3,65,46,000/- plus Rs. 10,000 as cost of litigation and (c) 10% pa of the aforesaid amount from the day of the judgment. The appellant not satisfied with the order, approached the Supreme Court through civil appeals. They reasoned that it was no breach of contract as they have transferred the construction of the building to another company, and they should not be held liable in the present case in a deficiency of service.
Hearing both the parties and examining pieces of evidence on record, the Hon’ble court raised two issues:
- Whether in the following issue there is a deficiency of service or contractual breach on the part of the appellants?
- Whether the awarded compensation was just and reasonable or not?
The Hon’ble court upheld the impugned order of NCDRC giving reasoning that the appellant did not give any valid reason as to why the delay happened concerning the transfer of the flat to the respondent, they have waited for a reasonable amount of time for the completion of contract. There was a contractual obligation between the parties and, the compensation should be awarded to the respondent based on the deficiency of service.
About the second issue, there is no airtight formula for awarding the compensation. But considering the circumstances of the case, the respondent was deprived of increment of the price of the flat because the appellant failed to deliver it or substitute another property. So, the breach results in damages deem fit and reasonable in the case by fixing the market rate as not to exceed the amount of compensation as gain-based and not actual-loss-based. The court ordered the appellant to (a) refund the sale consideration amount, (b) to pay a sum of Rs. 2,27,20,000/- plus Rs. 20,00,000 compensation of the parking unit, and (c) Rs. 10,000 the cost of litigation within six weeks.
The Hon’ble court’s discretion while awarding compensation made sure to award an appropriate amount without being unjust to the other party. When there is no set formula present, facts and circumstances of the case decide the quantum of compensation as it should solely be based on an actual-loss formula.