No possession of flat for over a decade, builder told to refund ₹32 lakh to buyer

Ludhiana consumer panel orders 12% annual interest from dates of payment, imposes ₹50,000 costs; buyer had paid nearly the entire cost of a flat in Dream City project on Issewal-Deatwal Road

The District Consumer Disputes Redressal Commission, Ludhiana, has directed Phoenix Infra Pvt Ltd and its two directors to refund ₹32.05 lakh to a 66-year-old flat buyer, along with 12% annual interest from the respective dates of payment until the refund is made, after the developer failed to deliver possession of a flat for more than a decade. The commission also imposed ₹50,000 in costs on the developer and its directors, holding them jointly and severally liable.

The commission was presided over by Sanjeev Batra, with Monika Bhagat as member. (HT)

The order came on a complaint filed by Major Singh Sekhon, a resident of Fatehgarh Sahib, who booked a 1,350-square-foot ground-floor flat in Block N of the Dream City project on Issewal-Deatwal Road on December 27, 2012. The total sale consideration was fixed at ₹33.04 lakh.

According to the complaint, Sekhon paid ₹1.55 lakh at the time of booking. An agreement was executed on May 21, 2014, following which he paid a total of ₹32,05,634 in seven instalments by August 2014.

The agreement stipulated that possession would be handed over within 24 months, with an additional six-month grace period. However, the developer failed to complete construction and provide the promised facilities within the stipulated period.

Sekhon told the commission that he visited the project site several times to check the progress of construction. During a visit on November 7, 2022, he found no construction activity underway.

The commission observed that the agreement contained terms heavily tilted in favour of the developer. It held that one-sided and unreasonable contractual conditions could not be treated as binding on the consumer. Citing Supreme Court judgments, the commission ruled that the failure to deliver possession within the agreed period amounted to deficiency in service and an unfair trade practice.

Phoenix Infra, which has an office in Model Town Extension, Ludhiana, and its two directors, who are based in Toronto, Canada, did not contest the proceedings and were proceeded against ex parte. Gurugram-based AIPL Ambuja Housing and Urban Infrastructure Ltd and its managing director, Giriraj Damani, were also named in the complaint. However, the commission dismissed the complaint against them after accepting their contention that they had no direct contractual relationship with Sekhon and had not received any payment from him.

The commission directed Phoenix Infra and its two directors to refund ₹32,05,634 with 12% annual interest calculated from the respective dates of deposit until actual payment. It also ordered them to pay ₹50,000 in composite costs. The order must be complied with within 30 days of receipt of a copy.

The commission was presided over by Sanjeev Batra, with Monika Bhagat as member.