Man paid Rs 1.73 crore for Gurgaon flat, waited over a decade without possession; builder alleges homebuyer bought it for commercial gain, consumer commission awards refund with 12% interest & Rs 4 lakh
Buying a home is a dream for many, but if the possession of the flat is delayed then it can turn into a nightmare. In one such case, a homebuyer booked a flat in Gurgaon and had to wait for over a decade but still did not get possession from the builder.The construction was found to be incomplete, with the builder failing to hand over the apartment to him. After waiting for seven years, the homebuyer decided to pursue the matter legally.
What the case is about:
The homebuyer booked a flat in Gurgaon and paid around Rs 1.73 crore for the apartment. He was assured that the flat would be handed over to him within three years. Instead, the promised possession remained elusive for years.In 2012, the man booked the 2,600 sq ft apartment in a project located in Sector 83, Gurgaon. The basic sale price was fixed at Rs 6,428.50 per sq ft, apart from other applicable charges. The basic sale price of the apartment was stipulated at Rs 1.67 crore.The Builder Buyer Agreement was signed in November 2012. Under its terms, the builder was required to complete construction within three years from the date on which the agreement was executed. Relying on the assurances given by the developer, the man obtained a home loan and ultimately paid Rs 1,72,93,048.76 towards the apartment.Facing prolonged delays, the homebuyer first approached the NCLT Chandigarh and later moved the Haryana Consumer Disputes Redressal Commission, where he eventually succeeded.In his complaint, the homebuyer alleged that the builder displayed a negligent and lethargic approach towards the project, which resulted in the construction not being completed.Before filing his case before the State Consumer Commission, the homebuyer had also sought a refund of the amount he had deposited, along with interest. He made this request to the developer through emails and a letter sent in 2018 and 2019.Following the issuance of notice, the builder claimed that the man had purchased the apartment for his “own commercial gain”. It further alleged that “the complainant had voluntarily invested in the said project keeping in view the profit viability on the resale of the said unit.”While acknowledging that the homebuyer had paid nearly Rs 1.73 crore towards the apartment, the proxy counsel appearing for the builder contended that the total sale price of the unit was Rs 1,89,54,500, according to an ET report. This figure, according to the builder, included additional charges such as electricity meter installation, PLC, Club Membership, EDC, IDC and IFMS.The developer also disputed the claim that the homebuyer had made all his payments on time. It alleged that he had delayed payment of installments and maintained that the dues were paid only after the builder issued several reminders.The builder did, however, acknowledge that there had been a delay in completing the project. It attributed the delay to circumstances beyond its control, including: initiation of the GAIL Corridor, non-removal or shifting of the defunct high-tension lines passing through the lands, Nnon-acquisition of sector roads by HUDA.
Why the homebuyer won refund with interest
After considering the facts presented in the case and hearing the arguments from both sides, the commission concluded that the builder was guilty of deficiency in service and unfair trade practice.It directed the developer to return the amount deposited by the homebuyer along with interest at 12% from the dates on which the respective payments were made until the amount is realised.The commission also awarded the homebuyer Rs 3 lakh as compensation for the mental harassment and physical agony suffered by him. A further Rs 1 lakh was granted towards his litigation costs.Gaurav Singh, Counsel at Clavius Legal, told ET that the matter represented a clear case of prolonged non-delivery. “The buyer had paid about Rs 1.73 crore, partly through a home loan, and had asked for a refund in writing in 2018 and 2019 before he litigated. The builder blamed the GAIL corridor, high-tension lines and sector roads that had not been acquired. The Commission granted a refund notwithstanding those explanations.”Singh added that a homebuyer cannot be expected to remain stuck indefinitely when possession has been delayed for almost 11 years and there is still no definite timeline for handover. According to him, this is in line with the principle recognised under settled consumer law.The builder maintained that the homebuyer had purchased the apartment with the intention of reselling it and earning a profit. However, the order does not expressly address this objection. According to Singh, the commission recorded the booking as being for personal residence, took note of the home loan and based its decision primarily on the prolonged failure to deliver possession.“The builder has to establish that the transaction falls within the commercial-purpose exclusion; simply asserting that a property was purchased as an investment is not enough. Buying one flat that may appreciate is not, by itself, the same as carrying on a business of trading in property,” he added.The fact that a homebuyer is an investor does not automatically remove the contractual or statutory responsibilities of the developer. However, where the purchase actually falls within the ‘commercial purpose’ exclusion, the purchaser may not be treated as a consumer and a complaint before the consumer forum may therefore not be maintainable.The right to seek a refund under Section 18 of the RERA Act, however, is not contingent on the property having been purchased for the allottee’s own use. The Supreme Court has also recognised an allottee’s right to seek a refund with interest when the promoter fails to hand over possession within the period agreed upon.
