Delay In Handing Possession And Failure To Refund : Delhi State Commission Holds J.M. Housing Ltd Liable For Deficiency In Service

Brief Facts of the Case

The complainant booked an apartment in JM Florence, Greater Noida, a project by J.M. Housing Ltd./builder. Subsequently, he paid ₹14,28,503 as demanded by the builder. An allotment letter was issued, stating possession would be given within 40 months, with a 6-month grace period. However, construction was delayed, and the complainant decided to cancel the booking. As per the terms, the builder was required to refund the amount after deducting 10% and service tax. Despite repeated requests and a legal notice, the builder failed to refund the amount. Consequently, the complainant approached the State Commission for relief. The complainant sought a payment of Rs. 14,28,053, Rs. 5,00,00 as compensation and litigation costs as prescribed by the commission's jurisdiction.

Contentions of the Builder

The builder argued that the complainant was not a 'Consumer' as the flat was booked for investment reasons, which makes it commercial in nature. It was further argued that the Arbitration clause in the builder-buyer agreement barred the Commission's jurisdiction and also disputed the Commission's pecuniary jurisdiction. The builder also argued that the complainant was a regular defaulter and further refuted any claims of deficiency on their part.

Observations by the State Commission

The State Commission observed that the complainant qualifies as a consumer under the Consumer Protection Act, as the builder failed to prove any commercial intent behind the purchase. Citing Aashish Oberai v. Emaar MGF Land Ltd. and Narinder Kumar Bairwal v. Ramprastha Promoters, the Commission reiterated that mere allegations of commercial purpose without evidence are insufficient. The builder's failure to deliver possession within the stipulated time constitutes a continuous wrong, granting the complainant a recurring cause of action, as supported by Mehnga Singh Khera v. Unitech Ltd. Despite the arbitration clause in the agreement, the Commission cited Emaar MGF Land Ltd. v. Aftab Singh to affirm its jurisdiction over consumer disputes. The Commission also clarified its pecuniary jurisdiction under Section 17 of the Act, as the claim value exceeded ₹20 lakhs but was below ₹1 crore. On the issue of service deficiency, the Commission cited Arifur Rahman Khan v. DLF Southern Homes to conclude that the builder's delay in possession and failure to refund violated the agreement. Hence, the builder was held deficient in service for failing to refund the complainant's amount after deducting earnest money, as per the terms. It also noted the builder's responsibility to bear brokerage charges from the forfeited earnest money. The complaint was allowed and the Commission directed the builder to refund an amount of Rs.11,19,689 [After deduction of 10% of the basic price of the apartment] at 6 % interest rate and pay Rs. 1,00,000 for mental agony/harassment along with Rs. 50,000 as litigation cost.

Case Title: Mrs. Vijaywati Tiwari Vs. M/S J.M. Housing Ltd

Case Number: C.C. No. 936/2017

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