Failing To Refund Advances As Per Agreed Terms: Delhi State Commission Holds TDI Infracorp Liable For Deficiency In Service

Brief Facts of the Case

The Complainant booked a residential apartment in the builder's project, 'TDI LakeSide Heights', located in Kundli, Sonepat, Haryana. The builder assured the Complainant that only 10% of the basic sale price was required upfront and that they would arrange a loan for the remaining 90%. The complainant paid Rs. 3,50,000 as booking amount and an extra Rs. 5,618 as loan processing charges. However, the builder did not provide or arrange the loan that was promised. The Complainant, alleging a deficiency in service, filed a complaint before the State Commission Commission. The complainant seeks the builder to refund the booking amount, pay Rs. 1,00,000 as compensation and Rs. 50,000 as litigation costs.

Contentions of the Builder

The builder argued that the complaint is not maintainable as the complainant is merely a speculative investor and not a “Consumer” as per the Consumer Protection Act. The builder also stated that the complainant had defaulted on payments on numerous occasions. Despite several notices and letters, the complainant failed to pay the outstanding amount, which is 90% of the total sale price. He denied deficiency on his part and urged for the dismissal of the complaint.

Observations by the State Commission

The State Commission observed that the main issues were whether the complaint was within the limitation period, whether the Complainant qualified as a “consumer,” and whether the builder was deficient in services. Under Section 24A of the Consumer Protection Act, the Commission noted that failure to deliver possession is a continuous wrong, creating a recurrent cause of action. Referring to the Mehnga Singh Khera v. Unitech Ltd. case, it held that the complaint was maintainable as possession had not been delivered, nor had the amount been refunded. Regarding whether the Complainant was a “consumer,” the Commission referred to Aashish Oberai v. Emaar MGF Land Limited and Narinder Kumar Bairwal v. Ramprastha Promoters, emphasizing that mere allegations of commercial intent without documentary proof are insufficient. Since the builder failed to provide evidence that the apartment was purchased for profit-making, the Complainant was deemed a “consumer.” On the issue of service deficiency, the Commission noted that the Complainant paid Rs. 3,50,000 as an advance but did not secure the promised loan. Despite the repeated refund requests from the complainant, the builder neither refunded the amount nor addressed the grievance but continued to issue demand letters. The Commission pointed out a clause that allows withdrawal before allotment with a 50% deduction, which the builder ignored. It was further clarified that the refund of Rs. 5,618 paid to “Tata” for loan processing could not be claimed from the builder. However, the builder was found deficient in service for failing to refund the advance as per the agreed terms. The State Commision directed the builder to refund Rs. 1,75,000 (50% of the total amount deposited by the Complainant) at 6% interest, Rs. 1,00,000 compensation for mental agony and Rs. 50,000 as litigation costs.

Case Title: Mr. R.P. Phulia Vs TDI Infracorp Ltd. And Ors.

Case Number: C.C. No. 875/2018

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