Giving False Assurances For Possession Of Apartment And Subsequent Cancellation Of Allotment Is 'Deficiency In Service' : Delhi State Commission

Brief background of the case:

An apartment was booked by the Complainant under a project- Cosmos Golden heights of the developer company situated in Ghaziabad, Uttar Pradesh. An allotment letter in respect of the apartment was issued by the company. According to the said letter, possession was to be handed over within 36 months of allotment. The Complainant stated that an amount of Rs. 17,52,757 was paid to the company from time to time. However, the construction of the said project got delayed and could not be completed on time. Thereafter, several communications were sent to the company inquiring about the status of construction. Instead of providing any adequate response, the developer company cancelled the allotment of the complainant. Therefore, the complainant filed a complaint before the consumer forum praying for appropriate compensation.

The company raised objections to the complaint on maintainability and other grounds. It was argued that the complainant did not disclose all material facts regarding timely payments before the commission. It was further argued that the company is not deficient in providing its services.

Issues and Observations:

The main issue for consideration was whether the company is deficient in providing its services. Reliance was placed on the decision of the Hon'ble Supreme Court in Arifur Rahman Khan & Ors. vs DLF Southern Homes [Civil Appeal 6239 of 2019] wherein it was observed that providing facilities in connection with housing construction is a service under the Consumer Protection Act. Thus, failure of the developer to comply with the contractual obligation to provide flat to the flat purchaser amounts to deficiency.

The bench also took note of Condition No. 16 stated in the allotment letter which provided for handover of possession within 36 months. It was observed that the construction of the project is not completed till date despite taking huge amounts of money from the complainant. Thus, the developer company gave false assurances to the complainant with respect to handover of possession. Accordingly, the company was held liable for providing deficient housing construction services.

Thus, the company was ordered to refund the amount of Rs. 16,76,700 along with interest @ 6% p.a. Additionally, Rs. 1,00,000 as compensation was awarded for mental agony and harassment. Litigation costs amounting to Rs. 50,000 were also directed to be paid.

Case name: Imroz Ahmed khan vs Cosmos Infra Engineering (I) Ltd.

Case number: Complaint Case No. 123/2013

Date of decision: 05.11.2024

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