Refund Rs 1.27 Crore With Interest: Delhi State Commission Holds Vatika Sovereign Liable For Failing To Complete Construction And Handover Apartment

Brief Facts:

The Complainant booked a plot in the 'Vatika India Next Plots' project located in Gurgaon, Haryana, with the Construction Firm in June 2012. She made an initial payment of Rs. 9.17 Lakhs as a booking amount and received an Allotment Letter. Until June 2015, she paid a total amount of Rs. 54,93,600. However, the Construction Firm failed to complete the construction of the project and deliver the possession as promised.

Due to this, the Complainant decided to transfer their booking and applied for an apartment in the 'Vatika Sovereign Park Limited' project, also situated in Gurgaon with the same Construction Firm. A Builder Buyer Agreement was executed and she paid a total amount of Rs. 1,26,65,504 by May 2016, against the overall apartment cost of Rs. 2,42,41,600. The construction company again failed to finish the construction and provide possession of the apartment to date. This led to the Complainant filing a consumer complaint before the State Commission alleging deficiency of service by the Construction Firm.

Observations of the Commission:

The State Commission allowed the complaint and held the Construction Firm liable for deficiency in service. It placed reference on the Supreme Court case of Arifur Rahman Khan and Ors. vs. DLF Southern Homes Pvt. Ltd. and Ors. on the concept of "Deficiency of Service” and highlighted that the term "deficiency" under Section 2 (1) (g) of the Consumer Protection Act, 1986, encompasses any fault, shortcoming, imperfection, or inadequacy in the quality, nature, or manner of performance that is mandated by law or contract in relation to a service. The failure of a developer to fulfill their contractual obligation of providing a flat to a buyer within the stipulated time constitutes a deficiency, representing a shortfall in the performance of the service as agreed upon in the contract. The term "service" in this context covers various services made available to potential users, including those associated with housing construction.

The Commission also pointed out that the jurisdiction of the Commission extends to directing the Construction Firm to rectify the deficiency in the service, as well as to provide compensation for any delay beyond the promised possession date. This compensation aims to address the inconvenience and distress experienced by flat buyers due to the developer's delay.

It further referred to Clause 13 of the Apartment Buyer Agreement which stipulated that the construction firm would complete the construction within 48 months of the agreement's execution. However, the Construction Firm failed to complete construction and did not hand over possession within the agreed-upon timeframe. The Commission held that the Construction Firm had misled the complainant regarding the possession timeline and retained the complainant's hard-earned money without fulfilling their obligations.

In conclusion, the Delhi State Commission ordered the construction firm to refund the entire amount paid by the complainant, which was Rs. 1,26,65,504, along with interest. The interest rate was set at 6% per annum, calculated from the date of receiving each payment until the date of the judgment. This interest rate was conditional on the construction firm making the full payment by October 25, 2023. However, if the firm failed to refund the amount by that date, the interest rate would increase to 9% per annum from the date of receiving each payment until the actual realization of the amount.

Additionally, it directed the construction firm to pay the complainant Rs. 6 Lakhs as compensation for mental distress and Rs. 50,000 to cover litigation costs.

Case Title: Nupur Gupta vs. Vatika Sovereign Pvt. Ltd. & Anr.

Counsel for Complainant: Ms. Kashish Sareen, Advocate

Counsel for Opposite Parties: Mr. Naveen, Advocate

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