Delhi State Commission Holds TDI Infrastructure Liable For Deficiency In Service Over Delay In Handing Over The Flat By More Than 15 Years

Brief Facts of the Case

The complainant booked a flat in the “TDI CITY” project developed by TDI Infrastructure and paid an advance registration fee of Rs. 3 lakhs. Subsequently, an allotment letter was issued by the builder, confirming that the Complainant had paid a total of Rs. 10,97,812 as requested. However, later, the Complainant was shocked to discover that the builder had completely altered the layout plan of the complex without providing a specified completion timeframe. Feeling aggrieved by this, the Complainant requested a refund of their deposit with interest at 18%, but the builder threatened to forfeit 50% of the deposited amount.

Contentions of the Opposite Party

The builder contested the case and raised preliminary objections regarding the maintainability of the complaint. The builder's counsel argued that there was no cause of action in favor of the Complainant to file the complaint. It was also claimed that there had been a default in making payments towards the said flat. The Complainant was obligated to pay Exytra Development Charges(EDC) at the time of booking, and despite various reminders being sent to pay EDC for the said flat, the Complainant failed to do so. Additionally, it was asserted that the layout plan was tentative and had to be finalized in accordance with the rules and regulations of the concerned authority.

Observations by the Commission

The commission, upon analysis of Section 24A of the Consumer Protection Act, 1986, observed that this commission is authorized to entertain a complaint if it is filed within two years from the date on which the cause of action arose. In the current case, neither possession of the flat in question, along with all agreed facilities, has been provided, nor has the deposited amount been refunded to the Complainant up to this date. Additionally, referencing the case of Mehnga Singh Khera and Ors. Vs. Unitech Ltd., it is established that the failure to deliver possession of a flat constitutes a continuous wrong and a recurrent cause of action. As long as possession is not handed over to the buyers, they retain the right to seek recourse through the consumer courts. Thus, based on this established legal principle, the commission observed that the failure to deliver possession constitutes a continuous wrong, and the Complainant is allowed to file the present complaint before this commission.

The commission further observed the concept of deficiency of service by referencing the ruling in Arifur Rahman Khan and Ors. vs. DLF Southern Homes Pvt. Ltd. and Ors. In this case, it was explained that a failure of the builder to fulfill the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period constitutes a deficiency. This deficiency entitles the buyer to compensation for the delay caused by the builder beyond the agreed possession period. In the present case, the Complainant asserted that the builder assured him possession of the flat by the end of the year 2009. However, the commission found no provision specifying the timeframe within which the builder was required to hand over possession of the flat to the Complainant. To address this issue, reference was made to the case of Ajay Enterprises Pvt. Ltd. and Ors. vs. Shobha Arora and Ors., where it was held that if no specific time limit is mentioned for the performance of a promise, it must be fulfilled within a reasonable time. Typically, builder-buyer agreements stipulate a period ranging from 24 to 48 months for completion of construction and delivery of possession, with a common agreement being for 36 months plus a grace period of six months. If possession is not delivered within 42 months or beyond 48 months, it constitutes a deficiency in service on the part of the builder. In the present case, it is evident that the builder failed to hand over possession of the flat even after more than fifteen years from the date of booking. The commission noted the builder's argument that the Complainant defaulted in making timely payments for Extra Development Charges (EDC), giving them the right to forfeit 50% of the deposited amount. However, upon reviewing the evidence submitted by both parties, no executed Builder Buyer Agreement was found in accordance with which the builder could cancel the allotment. Therefore, the commission concluded that the developer lacked the right to cancel the Complainant's allotted flat and forfeit 50% of the deposited amount.

The commission directed the builder to refund the entire amount paid by the Complainant, i.e., Rs. 10,97,812, along with interest @ 6% p.a. along with Rs. 1,00,000 as cost for mental agony and the litigation cost to the extent of Rs. 50,000.

Case Title: Mr. Praveen Chauhan Vs TDI Infrastructure Pvt. Ltd.

Case Number: C.C. No. 569/2019