Suman Jindal & Ors. v. Adarsh Developers
(2019) 16 SCC 806
In the Supreme Court of India
Civil Appeal 4284/2019
Before Justice (Dr) DY Chandrachud and Justice Hemant Gupta
Decided on April 25, 2019

Relevancy of the Case: Agreement over email between a buyer and the developer for the sale of residential apartments

Statutes and Provisions Involved

• The Consumer Protection Act, 1986 (Section 2(d))
• The Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management, and Transfer) Act, 1972
• The Registration Act, 1908

Relevant Facts of the Case

• There is a disagreement over a residential apartment that the appellants reserved with the respondent developer. There was a novation in which the booking fee was cut to 15% from 25%. This discussion took place over email.
• In line with this agreement, the appellant paid the required sum to the respondent. The respondents had explicitly acknowledged in their email that the booking amount was 15% of the total selling consideration.
• Moreover, as per the Karnataka Ownership Flats Act, 1972, Section 4 requires the petitioner to enter into a sale agreement before accepting any advance payment.
• In addition, the appellants repetitively requested to enter into the necessary documentation to get a loan sanctioned.
• The State Consumer Disputes Redressal Commission had dismissed the appellant’s complaint ruling that they are not consumers under the Consumer Protection Act, 1986. Also, they had not paid the booking amount. However, they could still pay the full sale price and seek an allotment from the builder.
• The National Consumer Disputes Redressal Commission confirmed the SCDRC order in part. The National Commission held that the appellants failed to make the payment for the flat, and hence, there was no service defect.

Prominent Arguments by the Advocates

• The appellant’s counsel submitted that email communications clearly show that the agreed booking amount is 15% of the total consideration, and this email exchange took place in February 2008.
• The respondent’s counsels submitted that the original agreement was in February 2005. However, the appellant did not pay the booking amount until February 2008. The respondent terminated the agreement due to non-payment.

Opinion of the Bench

• The email documentation shows that the respondent issued the allotment letter in February 2005. Further, the parties entered into the agreement of 15% consideration in February 2008. The developer has categorically accepted this position.
• Also, the records show that the appellants have continuously insisted on executing the agreement to facilitate the loan.

Final Decision

• The appellants shall pay the balance amount at the rate of 9% per annum to the respondent.
• On the other hand, the respondent shall execute all necessary agreements for completing the sale deed and transfer the title to the appellants.