National Consumer Commission Holds Anant Raj Ltd Liable For Deficiency In Service

Contentions of the Complainant

The complainant booked a flat with Anant Raj Ltd (builder) and signed a flat buyer agreement. The agreement promised possession within 36 months, with a grace period of 6 months. The complainant paid Rs 1,13,62,173 in installments, almost the entire sale consideration. Construction did not happen, and possession was not offered as promised. The complainant issued a Legal Notice seeking a refund with 18% interest, citing financial loss due to bank loan interest they had taken to pay the flat. Alleging deficiency in service and unfair trade practices, the complainant seeks a refund with compensation, future interest, and amounts for mental torture, litigation costs, and more. The complainant requests the Commission to direct the builder to refund Rs 1,13,62,173 for the flat's cost with 18% annual interest, along with Rs 26,59,298 for bank loan interest and future interest at Rs 63,794 per month until the full amount is recovered. Additionally, seeking Rs 10,00,000 for mental distress and Rs 10,00,00 to cover litigation costs.

Contentions of the Opposite Party

The builder rejected the complainant's claims and raised preliminary objections, arguing that the complainant was not a consumer under Section 2(1)(d) of the Act, having booked the flat for commercial purposes. Additionally, the builder claimed that the complaint was time-barred, as the complaint exceeded the two-year limitation period. Furthermore, the builder contended that the complainant failed to demonstrate any negligence, deficiency in service, or unfair trade practice, suggesting the complaint was an attempt to avoid contractual obligations and extract money. It was argued that construction delays were due to the complainant's late payments, and the builder had offered an alternative unit of the same size and cost, which the complainant declined, suggesting the flat might not be for personal use. Acknowledging the issuance of a demand letter for a specific amount, the builder claimed the complainant paid later with a delay charge waiver request. The builder contended that the complainant sought to benefit from their mistakes and argued against being liable for the bank's interest.

Observations by the Commission

The commission referenced the judgment in Meerut Development Authority Vs. Mukesh Kumar Gupta to support its assessment of the preliminary objections raised by the builder regarding time limitations and the complainant's classification as a 'consumer.' Emphasizing the ongoing and recurring nature of the cause of action, the commission highlighted that, in line with the Supreme Court's decision, the “failure to deliver possession of the plot constitutes a recurrent/continuing cause of action.” Furthermore, regarding the builder's contention that the complainant is not a 'consumer' under the provisions of the Act, the Commission referred to its decisions in Kavita Ahuja Vs. Shipra Estates Ltd. and Sanjay Rastogi Vs. BPTP Limited & Anr. In these cases, it was established that the burden of proving that the unit was purchased for resale or a commercial purpose of buying and selling lies with the builder. The Commission noted that the builder failed to meet this burden, merely asserting that the non-acceptance of the alternate unit indicated speculative motives for booking the unit. However, the claim of the complainant that it be compensated for the amount paid to the bank and future interest and other compensations cannot be considered in view of the law laid down by the Supreme Court in DLF HomePanchkula Pvt., Ltd., Vs. D S Dhanda and Ors., which held that a singular default cannot be compensated under multiple heads.

The commission directed the builder to refund Rs.1,13,62,173 with interest @ 9% p.a. from the respective deposit dates to the complainant, along with Rs.25,000 as the cost of proceedings.