Delhi State Commission Holds Ansal Housing Liable For Failure To Deliver Flat Possession Within Stipulated Time

Brief Facts:

The Complainants applied for the allotment of a residential unit in the project 'Estella,' to be constructed by Ansal Housing (“Builder”) in Gurgaon, Haryana. After 1.4 years, the Builder allotted a unit to the Complainants. Subsequently, an 'Apartment Buyer Agreement' (“Agreement”) was executed between both parties. According to Clause 30 of the Agreement, the Builder was supposed to hand over possession of the unit within 36 months of the agreement's execution or the date of obtaining the license.

However, the Builder neither handed over possession of the unit nor was in a position to deliver it in the future. Further, the various clauses of the Agreement were unilateral, arbitrary, and one-sided. However, the Complainants had paid a substantial amount of Rs. 29 Lakh before the execution of the agreement, leaving them with no choice but to sign the agreement. The Complainants also opted for a construction-linked payment plan but were receiving demand letters from the Builder without knowing the stage of construction. Despite making various inquiries regarding the construction stage and the delivery date of the unit, the Builder failed to provide a satisfactory response.

Over time, the Complainants paid a total sum of Rs. 96,46,580/- to Builder as demanded. However, the Builder failed to deliver the possession of the unit or provide a recourse after receiving a legal notice from the Complainants. Feeling aggrieved, the Complainants filed a consumer complaint in the State Consumer Disputes Redressal Commission, Delhi (“State Commission”).

Contentions of the Builder:

The Builder contended that the Complainants are not consumers under the Consumer Protection Act, 2019, as they invested money to earn a profit, amounting to a commercial purpose. Additionally, since the Complainants reside in the USA, they never intended to own the unit for bona fide residence in Gurugram. It further submitted that the delay in handing over possession was due to 'force majeure' (unexpected event) circumstances beyond its control, including demonetization, a ban on groundwater extraction by the Punjab & Haryana High Court, and a directive from the National Green Tribunal to stop construction in Delhi NCR to prevent emissions.

Observations of the Commission:

On the question of whether the Complainants had a cause of action, the State Commission referred to the case of Mehnga Singh Khera and Ors. Vs. Unitech Ltd. [I (2020) CPJ 93 (NC)], where it was held that the failure to deliver possession constitutes a continuous wrong and a recurrent cause of action. Further, as per Section 69 of the Consumer Protection Act, 2019, a complaint must be filed within two years from the date the cause of action arises, unless there is a sufficient reason for delay. Since the possession of the unit with the agreed facilities was not delivered, nor was the amount refunded, the State Commission observed that the Complainants had a recurrent cause of action.

The State Commission also considered the argument of the Builder that the Complainants were not consumers since they invested money for a commercial purpose. The State Commission referred to Aashish Oberai Vs. Emaar MGF Land Limited [I (2017) CPJ 17 (NC)], where it was held that owning multiple houses or plots did not automatically imply a commercial purpose, as houses could be purchased for family use also. Furthermore, in Narinder Kumar Bairwal and Ors. vs. Ramprastha Promoters and Developers Pvt. Ltd. and Ors. [CC-1122/2018], the NCDRC held that the burden of proof was on the developer to show the purchase was for commercial purposes. The State Commission held that the Builder failed to prove that the purchase was for commercial purposes.

The Builder also claimed that the delays were due to 'force majeure' circumstances such as demonetization and court orders banning groundwater extraction and construction. However, the State Commission found these reasons inadequate. Reliance was placed on Sachin Goel & Anr. V. M/S. Ansal Housing & Construction Limited [Consumer Case no. 1624 of 2018], where similar claims were rejected as the developer could have used alternative resources. Similarly, in Narinder Sachdeva & Anr. V. M/S. Ansal Housing & Construction Limited, [C.C. No. 235 Of 2018], the NCDRC held that such reasons did not fall within force majeure, as adequate documentary evidence was lacking.

The State Commission held that the Builder was deficient in service by failing to deliver the unit within the stipulated period. Thus, the State Commission ordered the Builder to refund Rs. 96,46,580/- with 6% interest. Additionally, the Builder was directed to pay Rs. 4,00,000/- for mental agony and harassment and Rs. 50,000/- for litigation costs.

Case Title: Mr Vikas Jain and Anr. vs Ansal Housing Ltd.

Case No.: Complaint Case No. 146/2022

Advocate for the Complainants: Mr Pawan Kumar Ray

Advocate for the Opposite Party: Intellection Law Offices

Date of Order: 05.07.2024