Understanding the law of limitation

Builders seldom give possession of the flat on time. There are also instances when they refuse to hand over possession due to disputes with flat purchasers. The law of limitation differs for delayed possession and denied possession, as distinguished by the National Commission in its order dated February 1, 2018 delivered by the B C Gupta for the Bench along with S M Kantikar in the case of Saroj Kharbanda versus Bigjo’s Estates. Saroj had booked a residential plot in Bigjo’s project at Gannaur in Sonipet District. The tentative area of the plot was 250 sq yards and its tentative cost was ~1.57 million.

Saroj deposited ~700,000 with the builder. In July 2008, the builder informed her that necessary permissions had been obtained from the Haryana State Government, and development work would commence soon, and thereafter allotments would be finalised.

The builder sought further payments, including external development charges. The amount was paid. Subsequently, there was no further communication nor demand for payment. In 2014, Saroj filed a complaint before the State Commission seeking a direction to the builder to accept the balance amount and hand over possession of the plot. She also claimed interest and compensation.

The builder contested the case. The delay in completing the project was admitted, but attributed to errors committed by the authorities while sanctioning the layout plans. The main defence was that the last instalment had been paid in 2008 whereas the complaint was filed in 2014, so it was time barred. The builder stated that the amount deposited by Saroj had been forfeited for failure to make further payments after 2008.

The State Commission rejected Saroj’s application stating that there was no explanation to justify the delay. Saroj appealed against the order.

The National Commission differentiated between refusal to give possession and delay in possession. It observed that the law of limitation was well settled. If possession is refused, the clock of limitation would begin from that date. So a complaint would have to be filed within two years from the date of refusal, otherwise it would be time barred. In contrast, when possession is delayed, there is a continuing wrong which gives rise to a recurrent cause of action. So there would be continuing cause of action. In such a situation, a purchaser would be entitled to approach the consumer forum at any point of time.

It also noted that Saroj had deposited approximately half of the total consideration. Thereafter, no further payment was demanded by the builder. Saroj too did not correspond with the builder.

The Commission also observed that when the builder has not raised a demand, he cannot blame the consumer for not making payment and use this as a ploy to forfeit the amount paid by the purchaser. With these observations, the National Commission set aside the order and remanded the matter back to the State Commission for deciding the case on merits.

When possession is delayed, there is a continuing wrong. A buyer would be entitled to approach the consumer forum at any point of time