Chandigarh District Commission Holds Punjab State Federation Of Corporative Housing Building Society Liable For Unreasonable Delay, Unilateral Change In T&C

Brief Facts:

Mr Joginder Lal (“Complainant”), in response to an advertisement floated by the Punjab State Federation of Cooperative House Building Society Ltd. (“Housing Society”), applied for the allotment of a Category-II flat. The housing society, through an allotment letter, allocated a Category-II flat in the Group Housing Society to the Complainant for a total sale consideration of Rs. 14.92 lakh. The Complainant paid Rs. 8,98,000/- to the housing society. The Complainant received a possession intimation letter with the allotment of a Category II flat on the second floor with an increased outstanding payment of Rs. 15,76,119/- compared to the earlier tentative amount of Rs. 5,97,000/-. The Complainant contested the arbitrary price hike, expressing inability to pay the inflated amount and requested a refund, but the housing society did not accept the request. The Complainant formally sought a refund on Dec 2020, which was refused by the housing society in Feb 2021. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-I, Chandigarh (“District Commission”) and filed a consumer complaint against the housing society.

In response, the housing society argued that the Complainant did not make the payment despite multiple opportunities. It argued that the Complainant deliberately avoided possession due to insufficient funds and only sought a refund on 6.12.2020, five years after the possession offer. Therefore, it prayed for the dismissal of the complaint.

Observations by the District Commission:

The District Commission observed that the Complainant paid an initial amount of Rs. 9438/- for the allotment of the flat, followed by an additional payment of Rs. 8,98,000/-. However, the final cost of the flat was inordinately increased to Rs. 24.46 lakh, an escalation of Rs. 9.54 lakh from the tentative price of Rs. 14.92 lakh. The District Commission noted that the housing society collected money from consumers, including the Complainant, before obtaining necessary permissions from authorities. It held that builders should not collect money without the final sanction of the layout.

Further, the District Commission held that the arbitrary delay in construction and the unilateral change in terms and conditions by the housing society was unfair and unreasonable. It held the housing society liable for deficiency in services and unfair fair practices. Consequently, it directed the housing society to refund Rs. 9,00,500/- to the Complainant with interest at 9% P.A. from the date of deposit. Additionally, the housing society was instructed to pay Rs. 30,000/- as compensation for mental agony and harassment, along with Rs. 10,000/- as costs of litigation incurred by the Complainant.