Page 59 - Insurance Times December 2020

vehicle in a head-on collision, killing all four passengers in building would not have a 15th floor, and offered to allot
it. Both farmers died on the spot. The truck driver fled the another flat. This offer was not accepted because the flat
scene. on the 15th floor was specifically chosen by paying a pref-
The insurance company had denied the claims for compen- erential location charge. The company sought a refund
sation and said that the negligence was not on the part of along with 21 per cent interest. The builder was willing to
the truck driver, but on the part of the car driver. give a refund but refused to pay any interest. So, Aerostar
filed a complaint before the National Commission.
A police inspector who had lodged the FIR in the case de-
posed before the Tribunal and concluded his evidence stat- Aerostar argued that it was entitled to a higher rate of
ing that the accident was caused due to negligence of the interest to compensate for the escalation in the price of
truck driver. He also told the Tribunal that the truck driver the flat, as observed by the Supreme Court in Ghaziabad
had fled leaving the dead and injured at the spot without Development Authority vs Balbir Singh. It was also pointed
medical aid. Noting this conduct of the driver immediately out that the agreement stipulated that 18 per cent inter-
after the accident, the Tribunal said that if he had been est would be payable by the purchaser to the builder in case
innocent, he would not have done so. It concluded that the of delay in payment, so the minimum interest for default
mishap took place due to the negligence of the truck driver. by the builder must correspond to the same rate of 18 per
cent per annum.
Tribunal member HB Hedaoo while calculating the compen-
sation for the farmers said that one must put himself in the The builder contested the case, questioning the maintain-
position of the Indian farmer as only the wearer knows ability of the complaint by a company under the Consumer
where the shoe pinches. The compensation in matters of Protection Act. On merits, the builder relied on the book-
death of farmers needs to be decided with some sensitiv- ing application and the agreement in which it was men-
ity, if not with emotions, with a good blend of law, he said. tioned that if possession could not be given for any reason,
an alternative flat could be allotted, or the entire amount
Calculating the compensation on the basis of the earnings would be refunded without damages, interest or compen-
from produce from the farmers' land and the crops they sation. The builder pointed out that the agreement also
grew, the tribunal said it would be an unjust and inappro- provided for a grace period of six months, and that an al-
priate approach to calculate compensation only on a no- ternative apartment was offered before the expiry of this
tional income of the labour the farmer was rendering on period, so there was no deficiency in service.
his own farm and ignore what he was earning from his field
property. Further it stated that it is painful and disturbing The National Commission observed that a company would
that as compared to the case of death of a middleman or also be a consumer in respect of goods or services purchased
trader in farm production, the compensation would have for its own use and not for trading or profit generation. So,
been calculated on tax returns or statements and thus a the complaint was held to be maintainable. It also observed
person in a better position economically and socially would that a one-sided clause incorporated by the builder in the
get better compensation. agreement cannot be invoked to compel a flat purchaser
to accept alternative accommodation. It held that Aerostar

Company, too, can file consumer com- was entitled to a refund. Regarding the claim for interest,
the National Commission observed that even though the
plaint agreement provided that interest was not payable, it could
Aerostar Helmets, a private limited company, had booked still be claimed as the builder was enjoying the use of the
an apartment in a complex being constructed by Adani M2K flat purchaser's money. Considering the current interest
Project, a limited liability partnership firm. An agreement rate, the Commission held that 8 per cent interest would
was executed on August 31, 2013, by which Adani agreed be reasonable.
to sell flat no. G-1502 for Rs 2,34,24,181, which included Accordingly, by its order of November 18, 2020, delivered
Rs 12 lakh towards preferential location charge for a flat by the Bench of Prem Narain and C Viswanath, the National
on the 15th floor. Commission allowed the complaint and ordered the builder

The agreement stated that possession would be given by to refund the entire amount of Rs. 2,34,24,181 along with
September 1, 2017. Even though the entire amount was simple interest of 8 per cent per annum. Additionally, an
paid, construction was completed only up to the 10th floor. amount of Rs. 50,000 was also awarded as litigation cost.
On October 6, 2017, the builder informed Aerostar that the A period of 45 days was given for compliance.
The Insurance Times, December 2020