Legal Provisions Involved: Section 67 of the Consumer Protection Act, 2019

Judgement by: Supreme Court of India

Judge/Bench: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe

Facts

The landowners entered into a Joint Development Agreement with the developer in 2012 and executed a General Power of Attorney (GPA) in the developer’s favour. The developer entered into Sale Agreements with flat buyers, promising possession within 36 months, however, the project remained incomplete even after the expiry of the grace period. The Appellants filed a complaint before the NCDRC alleging deficiency in service. 

Key Legal Provisions

Section 67 of the Consumer Protection Act, 2019.

Issues raised

Whether landowners can be held jointly and severally liable with the developer for delay in delivering possession of flats. 

Arguments of the case

The Appellants argued that the Sale Agreement clauses indicate joint and several responsibility of landowners and developers while the Respondent argued that liability for construction and delivery vested entirely with the developer. 

Judgement

The Court held that landowners cannot be held liable for deficiency in service when the developer has indemnified them against acts of commission or omission in construction. 

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