Builder’s Failure to Deliver Flats Amounts to Deficiency in Service: NCDRC Directs Mantra Lifestyle Homes to Refund Buyers with 9% Interest
Pranav B Prem
The National Consumer Disputes Redressal Commission (NCDRC), comprising Justice Sudip Ahluwalia (Presiding Member) and Dr. Sadhna Shanker (Member), has directed Mantra Lifestyle Homes Pvt. Ltd. to refund the amounts deposited by seven flat buyers along with interest at 9% per annum for its failure to deliver possession and obtain occupancy certificates despite receiving substantial payments. The Commission held that such conduct amounts to deficiency in service and unfair trade practice.
Background of the Case
The complainants — Sumit Sharma; Sanjay Shripatrao Mali and Aparna Magar; Usha Sharma and Ravi Prakash; Mayank Agrawal and Palak Singhal; Suraj Mewara and Jaya Mewara; Arun Kumar Rao; and Shilpi Shyamsukha — had booked flats in a residential project being developed by Mantra Lifestyle Homes Pvt. Ltd. The total sale consideration for the flats ranged from ₹29,29,210 to ₹56,86,000, and the complainants collectively paid approximately ₹2,22,81,661 towards their respective units.
As per the Flat Buyers’ Agreements executed between 2013 and 2016, possession of the flats was to be handed over within six years from the date of each agreement, inclusive of a one-year grace period. However, despite the passage of several years, the opposite party neither completed the construction nor obtained the required occupancy certificates. The complainants alleged that they had been deprived of possession of their flats for an unreasonably long time, and despite repeated requests, no refund was made. Consequently, they approached the NCDRC seeking refund of their deposits along with interest and compensation.
Submissions of the Complainants
The complainants argued that the opposite party violated the terms of the Flat Buyers’ Agreements by failing to complete the project and deliver possession within the stipulated time. They stated that they had paid substantial amounts between 2012 and 2015, yet no progress was visible, and only repeated assurances were given. They contended that the inordinate delay, coupled with false promises and refusal to refund their money, constituted clear deficiency in service and unfair trade practices.
Defence of the Opposite Party
The builder, on the other hand, contended that the complainants had failed to adhere to the agreed payment schedules, which hampered the project’s cash flow and delayed construction. It was further submitted that complainants Mayank Agarwal and Palak Singhal had been offered “permissive possession” of flat B-601 but did not clear the remaining balance and therefore could not take valid possession. The opposite party also attributed the delay to force majeure events such as the COVID-19 pandemic and a ban on gravel (“bajri”) imposed by the High Court of Rajasthan. On these grounds, the builder claimed that there was no deficiency in service. It was also argued that the complaint lacked pecuniary jurisdiction and should therefore be dismissed.
Findings of the Commission
Upon perusal of the records, the Commission observed that all complainants had booked their flats and paid the requisite amounts within time, while the opposite party had failed to complete the construction or obtain occupancy certificates. It noted that the so-called permissive possession offered to complainants Mayank Agarwal and Palak Singhal could not be treated as valid possession since the occupancy certificate had not been obtained.
The Commission rejected the builder’s contention regarding lack of pecuniary jurisdiction, noting that the total deposit of ₹2,22,81,661 clearly fell within its jurisdictional limits. It also dismissed the plea of force majeure, observing that the first payments were made between 2012 and 2015, and the agreements were executed between 2013 and 2016 — long before the onset of the COVID-19 pandemic. Therefore, the delays were within the control of the opposite party. The Commission also noted that even after nine years from the date of the last agreement, the builder had failed to obtain the occupancy certificate.
The bench remarked that the complainants had been deprived of both their money and possession for an unreasonably long period, entitling them to seek refund with reasonable interest. Referring to the Supreme Court’s rulings in M/s Nexgen Infracon Pvt. Ltd. v. Manish Kumar Sinha and DLF Homes Panchkula Pvt. Ltd. v. D.S. Dhanda, the Commission held that refund with interest at 9% per annum was appropriate compensation in such circumstances.
In conclusion, the NCDRC partly allowed the complaint and directed Mantra Lifestyle Homes Pvt. Ltd. to refund the entire amounts deposited by all seven complainants along with interest at 9% per annum from the respective dates of deposit till realization. The payment is to be made within eight weeks from the date of the order, failing which the interest rate shall stand enhanced to 12% per annum. The builder was further directed to pay ₹50,000 to each complainant towards litigation expenses.
Appearance
For the Complainants: Mr. Chandrachur Bhattacharyya, Advocate
For the Opposite Parties: Mr. Rakesh K. Rajwania, Advocate
Cause Title: Sumit Sharma & Ors. V. Mantra Lifestyle Homes Pvt. Ltd. & Ors.
Case No: Consumer Complaint No. 54 Of 2024
Coram: Justice Sudip Ahluwalia (Presiding Member), Dr. Sadhna Shanker (Member)
