12-year-long delay costs builder dear: National consumer commission orders Rs 1.4 crore refund with 18 per cent interest

“The conduct of the Opposite Parties (Greentech IT City Private Limited) clearly amounts to deficiency in service within the meaning of the Consumer Protection Act. Considering the long delay and the fact that possession has not been delivered till date, the Complainant cannot be compelled to wait indefinitely,” the national consumer commission said on March 20.

Allowing the consumer complaint, the NCDRC issued stringent directions including the full refund of Rs 1.4 crore. (Image generated using AI)

Deficiency in service: NCDRC

The commission dismantled the developer’s objections point by point.

On limitation:

• The national consumer commission held that delay in handing over possession constitutes a “continuing cause of action,” meaning the complaint remained maintainable despite the passage of time.
• “Possession has not been delivered till date, the Complaint cannot be held to be barred by limitation.”

On ‘investor’ tag:

• Rejecting the allegation outright, the consumer commission noted the absence of any evidence suggesting speculative intent.

On Deficiency in Service:

• The commission found it undisputed that the entire Rs 1.4 crore had been paid and yet possession was not delivered even after several years.
• This, it held, squarely amounted to deficiency in service under consumer law.

Issues before commission

• Whether the complaint is barred by limitation.
• Whether the complainant is a ‘Consumer’ under the Act.
• Whether there is deficiency in service on the part of the opposite parties.
• Whether the complainant is entitled to refund and interest.

Final blow: Refund with escalating interest

• Allowing the complaint, the NCDRC issued stringent directions including the full refund of Rs 1.4 crore.
• “In the facts and circumstances of the present case, refund of the deposited amount along with interest would meet the ends of justice. Since the Opposite Parties themselves agreed to pay interest @18% per annum in case of delay, the Complainant is entitled to the same rate of interest,” the commission said.
• Interest at 18 per cent per annum from dates of deposit.
• Payment within eight weeks.
• Default will trigger enhanced interest at 21 per cent per annum.
• Rs 50,000 awarded as litigation costs.

Deal that never materialised

• Complainant Bimala Garodia had booked a “Golf Villa” in a Rajarhat-based project in West Bengal, with an agreement for sale executed on April 30, 2013.
• The total amount was fixed at Rs 1.4 crore, which she paid in full.
• Under the contract, possession was to be delivered within 15 months, with a six-month grace period effectively by late 2014.
• However, even by 2026, possession remained elusive.
• Despite repeated follow-ups, including a formal letter in December 2018 and a legal notice in February 2019, the developer neither handed over the villa nor completed registration formalities.

Builder’s stand falters in court

• Advocate Harish Pant, appearing for the developer attempted to resist the complaint on multiple grounds, arguing that the claim was barred by limitation since possession was due in 2014.
• The buyer was an “investor” and not a consumer, said the counsel.
• He submitted that the construction was completed in 2017.
• Advocate Pant said that an alternative villa was offered, subject to additional charges.
• However, these contentions failed to convince the consumer commission.
• The developer also failed to file its written statement within the statutory period, leading to closure of its right to rebut the allegations effectively leaving the complainant’s claims unrebutted on record.

Contractual promise turns against builder

• A crucial factor that weighed against the developer was its own contractual clause where it had agreed to pay 18 per cent interest in case of delay in handing over possession.
• The consumer commission held this commitment to be binding.
• “Once such a contractual commitment has been made by the Developer, the same becomes binding and enforceable,” the commission said.

Backed by Supreme Court precedents

• The commission leaned heavily on established Supreme Court rulings, reiterating that homebuyers cannot be forced into endless waiting.
• Inordinate delay entitles buyers to refund with interest.
• Builders cannot retain “hard-earned money” without delivering possession.
• These principles, the commission said, applied squarely to the present case.

Why this ruling matters

• The order sends a strong signal to errant developers.
• Contractual obligations, especially on timelines and compensation will be strictly enforced.
• It also reinforces a consistent judicial stance that buyers are not captive investors and cannot be left at the mercy of indefinite project delays.
• For homebuyers across India, the ruling strengthens a critical legal safeguard: if possession is unreasonably delayed, refund with substantial interest is not just a remedy, it is a right.