Mohali: Failed to start construction, developer to refund ₹6 lakh

The builder denied receiving the entire amount and disputed the authenticity of the receipts. He claimed that one receipt was forged and argued that the signed document was only a quotation, not a construction agreement

The district consumer disputes redressal commission directed SS Builders Mohali to refund ₹6 lakh to a woman after accepting the amount for constructing a two-storey building for her clinic-cum-health centre at Wave Estate, Sector 85, but failing to start the work.

On June 13, 2023, the parties signed a quotation setting out the terms and conditions for construction at an estimated cost of ₹44 lakh. (HT File)

The commission, comprising president SK Aggarwal and member Paramjeet Kaur, directed the builder to refund the amount with 9% annual interest from the respective dates of payment. It also ordered the builder to pay ₹30,000 as compensation for harassment, inconvenience, and litigation expenses.

The complainant, Maninder Kaur, wife of Navjot Singh Gandhi and a resident of Phase 11, said she approached builder Jagdeep Singh Somal, proprietor of SS Builders Mohali, to construct a two-storey building on her plot, SCO 13, in Wave Estate. She intended to use the premises as a clinic-cum-health centre for her livelihood.

According to her complaint, the parties entered into an oral arrangement on June 5, 2023, and she paid ₹3 lakh as advance in two instalments of ₹1.5 lakh each. The builder issued a receipt for the amount. She subsequently paid another ₹3 lakh and received a second receipt.

On June 13, 2023, the parties signed a quotation setting out the terms and conditions for construction at an estimated cost of ₹44 lakh.

Maninder alleged that the builder did not start work despite receiving ₹6 lakh. He initially cited a shortage of labour, but the construction did not begin despite her repeated requests. She approached the consumer commission seeking a refund with 12% annual interest, ₹3 lakh for mental agony and harassment, and ₹50,000 towards litigation expenses.

The builder denied receiving the entire amount and disputed the authenticity of the receipts. He claimed that one receipt was forged and argued that the signed document was only a quotation, not a construction agreement.

The builder also told the commission that the plot required repairs and chemical treatment because water had accumulated at the site. He claimed to have spent money on materials and equipment. He further alleged that the complainant had a financial dispute with a previous builder, who had refused to allow further construction or issue a no-objection certificate until his alleged dues were cleared.

The commission examined the receipts and the signed quotation and held that the documents, read together, established the construction arrangement and payment of ₹6 lakh to the builder.

It observed that the builder had failed to explain satisfactorily why he retained the money without commencing construction. If the dispute with the previous builder prevented work from starting, he should have informed the complainant clearly and taken steps to resolve the issue before retaining her money, the commission said.

The commission held that the builder was required either to carry out the agreed work or refund the advance if construction could not proceed. His failure to do either amounted to deficiency in service. The commission partly allowed the complaint and ordered the refund, interest and combined compensation and litigation costs of ₹30,000.