The National Commission Holds Premium Acres Infrastructure Liable For Deficiency In Service Due To Arbitrarily Cancelling Allotment

Brief Facts of the Case

The complainant booked a flat in the “TDI City” project of the Premium Acres Infrastructure/builder company. They were allotted a flat for a sale consideration of Rs. 28,46,800. Subsequently, a buyer's agreement was signed, stipulating possession within 24 months from the agreement date. Opting for a construction-linked payment plan, the complainant made a total payment of Rs.15,76,000. Due to a lack of construction progress, no further payments were made despite no demand letters being issued. After over three years, the builder sent payment default notices. Upon visiting the site, the complainant found incomplete construction, lacking essential amenities. Despite this, the builder persisted in sending payment default notices and eventually canceled the allotment of the flat. The complainant approached the State Commission of Chandigarh with a complaint, and the commission allowed the complaint. The builder company, aggrieved by the order, approached this commission with a revision petition.

Contentions of the Opposite Party

The builder argued that the State Commission lacked territorial jurisdiction because the agreement specified Delhi courts as the appropriate forum, and their Chandigarh branch had been closed for years. They claimed that the complainant had purchased the flat for investment purposes. They pointed out that 75% of clients had already obtained possession and settled their dues, suggesting satisfaction with their services. They contended that no cause of action had arisen for the complainant as they hadn't paid their dues, with Rs.30,99,345 pending against them for the flat. The builder emphasized that possession was to be handed over within 24 months from the agreement date, subject to force majeure circumstances and punctual payment, which the complainant failed to adhere to despite multiple demand notices. They argued that the total sale consideration mentioned in the agreement was subject to final sale area adjustments, tax fluctuations, inflation, and charges as per the buyer's agreement clauses. Hence, no unfair trade practice occurred.

Observations by the Commission

The Commission observed that the main issue in this case concerned whether the builder failed to deliver physical possession of the flat within the stipulated time frame. It was evident from the records that the agreement stipulated possession within 24 months, yet the builder took no action to ensure possession within that timeframe. The builder only sent default payment notices after the prescribed period expires. Hence, there was a clear deficiency on the part of the builder. Additionally, upon receiving legal notice from the complainant, the builder's cancellation of the flat allotment was deemed arbitrary and unsustainable in legal terms. Regarding the builder's argument about jurisdiction, it was established that since the cause of action arose in Chandigarh, where the agreement was executed, and payments were made, the State Commission had the rightful jurisdiction over the matter. Therefore, the builder's jurisdictional objection was dismissed. Furthermore, the assertion that the complainant was not a consumer under the Consumer Protection Act lacked substantiation, as the burden of proof rested on the builder, which they failed to discharge. It was undisputed that the builder failed to deliver possession within the agreed timeframe, and instead of addressing the issue, they arbitrarily canceled the allotment. Therefore, the commission concluded that there was a clear deficiency on the builder's part. The commission cited several relevant case laws, including Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra and DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Assn., to support the buyer's right to receive fair compensation for undue delays in possession. These cases emphasized that buyers cannot be expected to wait indefinitely for possession and are entitled to reasonable compensation for delays.

The commission upheld the state commission's order and the complainant to pay the builder the residual amount and further directed the builder company to hand over the possession of the flat pay. The commission also directed the builder to pay interest @6% per annum on Rs.15,76,000 from the date of deposit till the date of handing over the possession of the unit, along with Rs. 50,000 as the litigation cost.

Case Title: MS. Premium Acres Infratech Pvt Ltd Vs. Devinder Singh Cheema

Case Number: R.P. No. 305/2017