National Consumer Commission Holds Universal Infrastructure Liable For Deficiency In Service

Contentions of the Complainant

The complainant booked a flat with Universal Infrastructure/Builder and paid Rs. 78,45,360 instead of the agreed-upon Rs. 65,60,000. It is alleged that the possession offer was invalid because the builder hadn't obtained a completion certificate, and construction was ongoing. The builder allegedly issued an account statement acknowledging only Rs. 68,45,360, though the person had paid Rs.78,45,360 according to the receipts, resulting in an excess payment of Rs.10,00,000. The person informed the builder about the overpayment, but the builder refused a refund, threatening to cancel the allotment. Additionally, Rs.2,85,360 was allegedly paid for service tax without providing a government department statement. The builder is accused of charging maintenance fees without an agreement, completion certificate, or promised facilities. The complainant filed a complaint before the State Commission of Punjab seeking compensation, including 9% interest on the deposited amount, a refund of Rs. 10,00,000, Rs. 73,000 for maintenance charges, Rs. 1,00,000 for mental distress, and Rs. 1,00,000 for litigation expenses. The State Commission allowed the complaint and ordered compensation to the complainant. The present complaint is a first appeal by the builder before this commission.

Contentions of the Opposite Party

The builder argued that the complainant is not a consumer under the Consumer Protection Act 1986 as she had purchased the flat to earn some profit from the open market. It was argued that the builder complainant was provided with the agreement to sell on the same date, but the complainant, an investor, refused to sign it as she intended to sell the flat in the open market for profit. The builder claimed the complainant didn't adhere to the payment plan, failed to sign the agreement, and was given possession of the flat with a request to clear the outstanding sale amount and a delayed payment interest. Regarding the completion certificate, the builder contended they applied within a reasonable timeframe, and the complainant's failure to make timely payments or sign the agreement is the cause of all issues, asserting there was no fault on their part.

Observations by the Commission

The commission observed the builder has not brought any evidence of record to prove that the complainant has purchased the said flat for commercial purposes and that there is a 'close and direct nexus' with any profit-generating activity. Therefore, in the absence of the same, the complainant is a 'consumer' within the definition under Section 2(1)(d)(ii) of the Consumer Protection Act, 1986. In so far as excess payment is concerned, from a perusal of the builder-buyer agreement, it is seen that the cost of the flat is Rs. 65,60,000, whereas the builder has nowhere stated that it has not received the payment of Rs. 78,45,36. The commission further observed that it is admitted by the builder that despite the physical possession of the flat being delivered, the Completion/Occupation certificate has not been received to this date. The commission referred to the Supreme Court ruling in Samruddhi Co-op Housing Society V. Mumbai Mahalaxmi Construction Pvt. Ltd., wherein the court held that the respondent is responsible for transferring the title to the flats to the society along with the occupancy certificate and the failure of the to obtain the occupancy certificate is a deficiency in service for which the respondent is liable. In this scenario, the builder did not give the complainant an occupation certificate, making him liable for deficiency in service.

The commission dismissed the appeal and stated that the State Commission had passed a well-reasoned order wherein the builder was directed to refund Rs.10,00,000 with 9% interest to the complainant, obtain a 'Completion Certificate' and 'Occupancy Certificate' within three months, and execute the conveyance deed. Additionally, the builder was instructed to refund Rs. 73,000/- for maintenance charges and abstain from charging maintenance fees until obtaining the required certificates while also paying Rs. 22,000 as litigation expenses within three months.