Delhi State Commission Holds Emaar MGF Liable For Failure To Deliver Flat Within Stipulated Time

Brief Facts:

The Complainants booked a flat in the project 'Gurgaon Green/Group Housing Colony' to be manufactured by Emaar MGF Land Ltd. (“Builder”). After a delay of almost 15 months from the application date, a Builder Buyer's Agreement was executed between the Complainants and the Builder. As per the agreement, the Builder assured the Complainants that possession of the flat would be offered on or before 31^st December 2018. However, the Builder failed to deliver possession within the assured time frame, providing various excuses for the delay.

Subsequently, an executive of the Builder informed the Complainants that they would receive the Occupation Certificate by the end of May 2019, which was later extended to August 2019. The Complainants continued making payments according to the schedule attached to the Agreement, totalling Rs. 14,67,574/-, with the remaining amount of Rs. 78,52,107/- to be paid upon intimation of possession. Despite this, the Builder continued to delay the possession on different pretexts while raising undue claims against the Complainants.

The Complainants requested for the termination of the Builder Buyer's Agreement and sent a legal notice to the Builder, demanding a refund of the Rs. 14,67,574/-. However, the Builder did not provide a satisfactory response. Feeling aggrieved, the Complainants filed a consumer complaint in the State Consumer Disputes Redressal Commission, Delhi (“State Commission”). In response, the Builder contended that the Complainants had no cause of action and that there was no deficiency in service on its part.

Observations of the Commission:

The State Commission referred to Section 24A of the Consumer Protection Act, 1986, which states that a complaint must be filed within two years from the date on which the cause of action arose. In this case, the Builder had assured possession of the flat by 31^st December 2018 but failed to deliver within that time frame. Relying on the case of Mehnga Singh Khera and Ors. vs. Unitech Ltd. [I (2020) CPJ 93 (NC)], the State Commission noted that failure to deliver possession is a continuous wrong, constituting a recurrent cause of action. Thus, it was held that the Complainants had a cause of action against the Builder.

Further, the State Commission referred to Arifur Rahman Khan and Ors. vs. DLF Southern Homes Pvt. Ltd. and Ors. [2020 (3) RCR (Civil) 544], where it was held that a developer's failure to provide a flat within the contractually stipulated period amounts to a deficiency in service. The State Commission also examined Clause 7 of the Builder Buyer's Agreement, which assured the Complainants that possession would be offered within 60 days from the issuance of the Occupation Certificate, and no later than 31^st December 2018. The Occupation Certificate in this case was issued on 16^th July 2019, and the Builder had applied for it only on 11^th February 2019, a month after the assured date of possession. The State Commission noted that this delay, coupled with the lack of explanation and documentary evidence from the Builder, demonstrated a deficiency in service.

The State Commission also perused Clause 7(b) of the Agreement, which stated the allottees had the right to seek termination of the agreement if the Builder failed to issue an offer of possession by the assured date. The Complainants exercised this right through an email, requesting termination and a refund. However, the Builder arbitrarily cancelled the flat and forfeited the amount paid.

Regarding the amount to be refunded, the Builder's statement of accounts indicated that Rs. 14,45,830/- had been paid by the Complainants. Therefore, the State Commission directed the Builder to refund Rs. 14,45,830/- with 6% interest. Additionally, the Builder was directed to pay Rs. 1,00,000/- for mental agony and harassment and Rs. 50,000/- for litigation costs.

Case Title: Mrs Jakkidi Lakshmi Reddy and Anr. vs Emaar MGF Land Limited

Case No.: Complaint Case No. 145/2020

Advocate for the Complainants: Mr Anurag Pratap and Rishiraj

Advocate for the Opposite Party: Lawyers Inc.

Date of Order: 08.07.2024