Delhi High Court imposes ₹5 lakh fine on NBCC for causing homebuyer 'extreme mental agony'

The Delhi High Court recently directed the National Buildings Construction Corporation (NBCC) to pay ₹5 lakh to a homebuyer for putting him through “extreme mental agony”. [Sanjay Raghunath Piplani and Anr v National Buildings Construction Corporation and Anr]..Justice Subramonium Prasad said that mental distress was caused to the homebuyer after NBCC failed to refund his money with interest even though structural defects were found in the building project he had invested in.The Court thus directed the builder (NBCC) to refund the entire amount of ₹76 lakh paid by the homebuyer, along with interest at the rate of 12% from January 30, 2021, when the possession certificate was issued.The Bench observed that this is a classic case where a homebuyer has been made to run from pillar to post after having spent his entire life savings on buying a home.It termed the stand of the NBCC - a Central government owned public sector undertaking - as unfortunate. The judge said that a homebuyer like the petitioner has to fight with his back to the wall, as he has no accommodation and no life savings because it has all been sunk into a purchasing a house..The Court noted that the total consideration for the flat was paid in 2017, and that there are structural defects in the building constructed by the NBCC, because of which the homebuyer was left in the lurch.It said that NBCC cannot deny paying interest on the money which was paid by the homebuyer and such an act should be dealt with severely.Justice Prasad said that purchasing a house is one of the most significant investments an individual or family makes in their lifetime, and involves years of savings, meticulous planning and emotional investment.“When builders of such homes fail to deliver what was promised, they shatter the trust and financial security of homebuyers and also put homebuyers in a situation where they may face immense stress, anxiety, uncertainty and ultimately be forced to navigate legal channels for seeking recourse. The emotional toll of living in limbo, uncertain about the future of their investment and the stability of their living arrangements cannot be understated. Compensating wronged homebuyers is not just a matter of rectifying past injustices but also about deterring future misconduct,” the Court said..The Court passed the order in a plea filed by a homebuyer named Sanjay Raghunath Piplani stating that he is a flat owner in the NBCC Green View Apartments project launched by the NBCC in 2012.Piplani had argued that despite paying the entire sales cost of the flat, the flat was never handed over to him. He was not even handed over an alternative flat or given a refund with appropriate interest.The Court was told that the petitioner paid over ₹76 lakh to the builder and that a 'no dues certificate' was also given to him. However, structural defects were found in the construction after certain persons started occupying the flats..After considering the case, the Bench said that the pittance offered by the NBCC to only return the principal amount without any interest cannot be said to be an offer in the eyes of law, especially when the price of land is increasing by geometric progression in the National Capital Region (NCR).“A rent allowance of Rs.12.50/- per sq. ft. to the home buyer for six months and assisting in hiring flats in the nearby area cannot be said to be an adequate compensation. In fact, the Respondent [NBCC] has been exceedingly unfair in treating the home buyers in this manner.”The Bench further observed that NBCC is an instrumentality of the State and is duty bound to act reasonably and fairly.The Court rejected the NBCC’s objection that the petitioner was forum shopping.“Even though it is clear that while seeking legal recourse, the Petitioner did approach various forums, by filing impleadment applications before the NCDRC besides filing a complaint before the Haryana RERA for redressal of his grievances and it is well established, in various judgements of the Apex Court, that the act of forum shopping is condemned, this Court is of the opinion that in the facts of the present case, such an act of approaching various forums stems from desperation rather than a strategic pursuit of a favourable dictat. This behaviour of the Petitioner arises out of a sense of frustration, helplessness and lack of legal knowledge.”.Advocates Raghav Vij, GS Rana and Saurabh Kaushal appeared for the petitioner.Senior Advocate Arvind Minocha along with Advocates Ray Vikram Nath, Akshat Chaudhary, Harshvardhan Jha and Ravi Kiran Sriramoju appeared for the NBCC.Advocates Chiranjiv Kumar, Mukesh Sachdeva and Neelima represented the Union of India..[Read Judgment]