Delhi State Commission Holds BPTP Builders Liable For Deficiency In Service

Brief Facts of the Case

The complainant, receiving an Allotment Letter, booked a 3-BHK residential flat in the Opposite Party's project. Subsequently, a Buyer's Agreement was entered, with the Opposite Party assuring possession within 42 months. To meet the demands, the complainant obtained a housing loan of Rs. 82,00,000 and paid Rs. 1,09,56,755 to the Opposite Party per the Construction payment plan. Despite this, possession of the flat has not been provided. After serving a legal notice, the complainant, alleging deficiency of service and unfair trade practice, approached the Commission.

Contentions of the Opposite Party

The Opposite Party raised preliminary objections regarding the maintainability of the complaint, arguing that an arbitration clause in the agreement mandates any dispute to be referred to an arbitrator. They asserted that the purchased flat was solely for investment, categorizing it as a "Commercial Purpose" and contending that the complainant does not qualify as a Consumer under the Consumer Protection Act 2019. Additionally, the Opposite Party claimed that the complainant failed to demonstrate any service deficiency and requested the dismissal of the Consumer Complaint.

Observations by the Commission

The bench put rest to the controversy relating to the existence of the arbitration clause by citing the Supreme Court judgment, namely Emaar MGF Land Limited vs. Aftab Singh, which states that the judicial authority can decline to direct the parties to arbitration only in situations where an aggrieved individual chooses specific or special remedies for which provisions are outlined. In this case, the complainant has chosen the specific remedies available under the Consumer Protection Act 2019, indicating that this Commission can adjudicate the case. Despite the existence of an arbitration clause in the agreement, the Commission is not obligated to relegate the case to arbitration, and its jurisdiction remains unaffected. To determine whether the complainant is a consumer as defined under the CPA, the bench highlighted the previously established dicta in Kavit Ahuja vs. Shipra Estate Ltd. & Ors and Aashish Oberai Vs Emaar MGF Land Ltd. wherein the Court emphasized that classifying house acquisition as a commercial activity solely based on quantity is inappropriate unless there is evidence of consistent engagement in buying and selling houses. The ownership of multiple houses or plots does not automatically imply a commercial purpose; the context, such as acquiring separate houses for family members, must be considered in each case. Moreover, in Aloke Anand Vs. M/s. Ireo Pvt. Ltd. & Ors. the Court ruled that the onus is squarely on the opposite party to prove that the complainant is conducting the business of buying and selling flats.

Therefore, from the aforesaid dicta, the Opposite Party must provide documentary evidence proving the commercial purpose of the purchased flat, and simply booking more than one flat with the Opposite Party does not exclude the Complainant from being defined as a consumer under Section 2(7) of the Consumer Protection Act, 2019.

Having discussed the preliminary objections raised on behalf of the OP, the bench discussed whether the OP is deficient in providing its services to the complaint. As per the precedent established in Arifur Rahman Khan and Ors. vs. DLF Southern HomesPvt. Ltd. and Ors. the bench ruled that a builder failing to provide possession within the agreed timeframe constitutes a clear deficiency of service under the Consumer Protection Act, 2019. In the present case, the complainant asserts a 42-month possession period, expecting possession by July 2016. However, the Buyer's Agreement lacks a specified timeframe for delivering the flat. In such cases, legal precedent, as discussed in Ajay Enterprises Pvt. Ltd. vs. Shobha Arora, establishes that the property must be handed over within a reasonable time.

The commission directed the opposite party to refund the entire amount paid by the Complainants, i.e., Rs. 1,09,56,755/- along with an interest rate of 6% p.a. calculated from the date on which the Opposite received each installment till the date of the judgement. In addition to the aforesaid relief, the OP is directed to pay a sum of Rs. 4,00,000 as compensation and Rs. 50,000 as litigation costs.

Counsel for the Complainant: Adv. Pardeep Mahajan & Adv. Sudhir Mahajan

Counsel for the Opposing party: Adv. Sargam Aggarwal & Adv. Arun Prakash

Case Title: Mr. Aurangzeb Khan Vs. M/S Bptp Ltd.

Case Number: C.C. No.- 71/2021

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