Delayed Flat Possession: Maharashtra State Consumer Commission orders Shanklesha Constructions and Mutha Constructions to Pay Interest and Rs. 2.5 Lakhs Compensation

The Commission directed the construction companies to hand over possession of the reserved flat within two months and instructed them to pay interest at a rate of 9% per annum on the amount of Rs. 13,10,000/- until the possession is handed over. Furthermore, it also ordered to pay interest at a rate of 12% per annum on the sum of Rs. 34 lakhs, along with Rs. 2 lakhs as compensation for the emotional distress suffered by the complainants, and an additional Rs. 50,000/- as litigation costs.

Brief Facts:

The Complainants booked a flat in the 'Sai Narvana Project' and made payments using different bank cheques. Mutha Constructions issued an Allotment Letter to them. They were contacted by the Construction companies and asked to pay Rs. 3 Lakhs for parking charges and Rs. 3.5 Lakhs for amenities. The complainants were willing to pay but lacked funds and thus, applied for a home loan of Rs. 34 Lakhs from ICICI Bank, which required the approved project plan. Despite requesting the approved plan from the Construction companies, there was no response. One of the complainants acquired the approved plan through a Right to Information request from the local authority, revealing that the plans were sanctioned in 2015 after the Construction companies had already collected Rs. 13,10,000/- from the complainants.

Upon providing the approved plan, the ICICI Bank approved the loan at an interest rate of 8.60% per annum. The Construction companies assured them of executing the agreement and registered the Agreement to Sale in favor of the complainants. The Construction companies promised to deliver possession of the flat by December 2017. However, when the complainants followed up after that date, no possession was provided.

The Complainants sent multiple legal notices demanding possession of the flat, damages, compensation, and costs. Despite receiving the notices, there was no response or any information about the project's completion. As a result, the complainants filed a consumer complaint.

Observations of the Commission:

The Maharashtra State Commission allowed the complaint and noted that the complainants had paid 99% of the total amount for the reserved flat to the Construction companies. Despite having received the complete payment, the Construction companies did not provide possession of the flat until 2018. Additionally, the Construction companies did not respond to the legal notices they received.

The Commission found Shanklesha Constructions and Mutha Constructions liable for deficiency in service and unfair trade practices. It determined that the complainants have the right to obtain possession of the reserved flat, along with interest for the delayed delivery of possession, compensation for the mental and physical distress endured, and the costs incurred due to legal action.

As per the Commission's orders, the construction companies are required to transfer possession of the reserved flat within two months. They are also instructed to pay interest at a rate of 9% per annum on the amount of Rs. 13,10,000/- until the possession is handed over. Furthermore, they are ordered to pay interest at a rate of 12% per annum on the sum of Rs. 34 lakhs, along with Rs. 2 lakhs as compensation for the emotional distress suffered by the complainants, and an additional Rs. 50,000/- as litigation costs.

Case Title: Mr.Naresh Ambratlal Sahita vs. Shanklesha Constructions

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