Why Delhi consumer court ordered NCR housing society to refund over Rs 80 lakh to two flat buyers

“The opposite party failed to hand over the possession of the flat in question even after the passing of more than 15 years from the date of the agreement dated July 25, 2013,” the bench said on June 8.

Highlighting the demanded amount by society paid by buyers by availing a loan, the order held that the opposite party was deficient in rendering services to the complainants by failing to hand over possession of the flats within a reasonable period and kept the amounts deposited by the Complainants for almost sixteen years from the date of the agreements.

15 years and still chasing physical possession of flat

The matter originated from a complaint filed by the complainants in March 2024 before the commission alleging deficiency of service and unfair trade practice on the part of the opposite party, Sahkari Awas Samiti Ltd, which is a society registered under the Uttar Pradesh Cooperative Societies Act, 1965 and engaged in the development and construction of residential flats for its members in Delhi NCR.

The complainants became members of the society in March and September, 2010, respectively. Initially, the society launched a housing project situated at NH-24, opposite Hi-Tech City, Sector-62, Noida and advertised the construction of residential flats for its members.

Relying upon the representations and assurances made by the officials of the opposite party, the complainants applied for allotment of 3BHK flats measuring approximately 1500 sq ft by paying membership fees of Rs.10,000 each.

The opposite party assured that possession of the flats would be delivered by the year 2012 at the agreed cost of Rs 24 lakh for Complainant No 1 and Rs 26.60 lakh for Complainant No 2, but disputes arose regarding the land of the original project.

Shift of project from Noida to Ghaziabad

The allegations were that the opposite party compelled the complainants and other members to shift their bookings to another project, namely “Palm Wood Enclave”, Plot No GH-01, Wave City, NH-24, Ghaziabad, upon payment of an additional amount. The complainants accepted the transfer on the assurance that the amount already deposited in the earlier project would be adjusted in the new project.

The opposite party revised the cost of the flats in the new project at Rs 28.78 lakh approximately for both complainants for 3BHK flats of admeasuring 1599 sq ft super area. Thereafter, agreements in July 2013 and undertakings dated November 2013 were executed between the parties. Based on the said undertakings, the complainants availed home loan facilities from financial institutions for payment of the demanded consideration amount.

Hard-earned money spent, delivery delayed

However, despite repeated assurances regarding completion of construction and delivery of possession, the opposite party continuously delayed the project and repeatedly extended the expected date of completion.

The opposite party kept revising and escalating the cost of the flats by imposing additional charges under various heads such as parking charges, escalation cost, GST, service tax, mechanical ventilation charges, smoke detector charges and other miscellaneous charges. Thus, the complainants were compelled to avail additional and top-up loans in the years 2018.

The allegation is that, finally, in 2019, the opposite party allotted the flats in the project; however, the allotments existed merely on paper, and physical possession of the flats has not been handed over to date.

The complainant claimed that during 14 years from the date of the becoming the members of the society, i.e., 2010, the opposite party continued making payments under pressure and coercion.

Demand for full return from flat buyers

They were seeking the relief, including direction to the opposite party to refund to the complainants with the same interest the amount which the Complainants with the same interest have deposited with the opposite party, i.e., Rs 39.8 lakh to Complainant No 1 and Rs 40.34 lakh to Complainant No 2. In total, Rs 79.43 lakh along with compensation in the form of simple interest at 18 per cent per annum from the date of deposit till the date of actual refund to each complainant.

The complainants were also seeking direction to pay the same interest, a sum of Rs. 10 lakh each, on account of mental harassment and trauma.

‘Complainants made payments by availing loan’

• It is clear that failure to deliver possession, being a continuous wrong it constitutes a recurrent cause of action and, therefore, so long as the possession is not delivered to the complainants.
• The complainants are within their right to file the present complaint before this commission.
• If the possession is delivered beyond the 42 months or beyond the 48 months, the deficiency in service on the part of the opposite party shall stand proved.
• The counsel for the opposite party submitted that the complainants had failed to clear outstanding payments as demanded by the society and had themselves sought cancellation of their memberships/allotments.
• He further submitted that although the cancellation was approved by the opposite party, the complainants failed to complete the necessary formalities for processing the refund; therefore, the opposite party cannot be held liable.
• It is clear that the complainants made timely payments of the agreed consideration amount in terms of the agreements.
• While the complainants duly fulfilled their obligations by making payments as demanded and by availing loan facilities for the said purpose, the opposite party failed to fulfil its obligation of delivering possession of the flats within a reasonable period of 42 to 48 months from the date of the agreements, despite receipt of the aforesaid substantial amount.

• The agreements between the parties were executed in the year 2013.
• The contention regarding COVID-19 raised by the opposite party to justify the inordinate delay in handing over possession is devoid of merit and is accordingly rejected.

‘Person who buys is consumer’

• The counsel for the opposite party contended that the complainants are not “consumers” within the meaning of Section 2(7) of the Consumer Protection Act, 2019, as the opposite party is not a commercial builder or service provider but a merely cooperative housing society constituted for the construction of affordable housing for its members.
• Analysis of Section 2(31) of the Consumer Protection Act, 2019 clearly reflects that the definition of the person includes a firm, whether registered or not; or a Hindu undivided family; or a co-operative society and every other association of persons, whether registered under the Societies Registration Act, 1860 or not.
• Though the Opposite Party in the present case is a society registered that comes under the definition of “person‟ as defined in the statutory provision of the Consumer Protection Act, 2019.
  it clear that a person who buys goods and hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment is a consumer.