NCDRC Orders Builder To Pay Rs.2.52 Crores To Homebuyer Who Was Not Delivered Flat As Promised [Read Order]

A homebuyer-couple who was not delivered a 60th floor flat as promised by Mumbai-based Lodha Crown Buildmart Pvt Ltd has been granted relief by National Consumer Disputes Redressal Commission(NCDRC), which directed the builder to pay Rs 2.52 crores with interest at the rate of 9%. 

Apart from the builder-company, the NCDRC also held its present directors Ramandas Pandey and Pranav Goel jointly and severally liable to pay the amount. 

The complaint was filed by Jagannath Hiray and Baby Hiray, who had booked a 3 BHK Flat at the 60th floor of proposed building named "LODHA DIORO priced at Rs4.46 crore by executing a registered agreement on 9 May 2012.

Later the builders informed the complainants that they can construct only 55 storied building because they failed to obtain required permission from Mumbai Metropolitan Region Development Authority (MMRDA). 

In 2015, the developer issued a letter canceling the allotment. In this backdrop, the complaint was filed seeking refund of the deposited amount plus damages. It was claimed in the complaint that even after receiving the commencement certificate, Lodha neglected to inform the buyer on reduction in number of floors and kept demanding balance amount as per agreement for a flat on the 60th floor.

The complainants, who contested the matter in person,  alleged that that the developer accepted payments for the 60th floor flat despite being fully aware that no permission would be granted by MMRDA for a building having more than 55 floors. Complainants further alleged that that the opposite parties are responsible for misrepresentation and suppressing the true and material facts in the registered agreement.

The builder opposed the complaint stating that the complainants were flat traders who booked the flat only for reselling. Since they had availed the service for commercial purposes, they cannot be regarded as 'consumer' within the meaning of Consumer Protection Act 1986. This contention was based on the fact that vouchers were issued in the name of Hiray Enterprises Ltd.

But the Commission discarded this contention, observing " The assertion of the learned counsel for the opposite parties may have some substance in his argument, but the question is whether the said booking was made for commercial purpose. It is seen from allotment letter dated 18.01.2012 that the allotment has been made in the name of Jagannath D. Hiray. Even, if the amount has been paid by the Hiray Enterprises Builders and Developers, the booking may be and is for the complainants". 

The NCDRC also noted that even a company can be regarded as 'consumer' as per Supreme Court precedents. "This(Hiray Enterprises) may be either a proprietorship concern or a partnership firm or a private limited company. All these three category of association of persons are covered under the definition of "persons" because the Hon'ble Supreme Court in Karnataka Power Transmission Corporation and Anr. Vs. Ashok Iron Works Private Limited, (2009) 3 SCC 240 has held that a company registered under the I Companies Act,1956 is the "person" within the meaning of person as given in of the Section 2(m) Consumer Protection Act, 1986 and partnership is exclusively covered under Section 2(m) of the Consumer Protection Act, 1986".

Lodha also stated that it had offered to refund the deposit amounts or a new flat in the same building (on the 50th floor) with the same carpet area, without any extra cost, but the complainant turned down the offer. However, it was later revealed that the builder did not have sanction to build beyond 45 floors due to height restriction by Airports Authority of India(AAI).

The Commission ordered to refund Rs.2,51,69,578/, which included stamp duty and registration expenses,  to the complainants along with 9% interest per annum within 45 days from the order.

Read Order

(Image sourced from here)