Delhi State Commission Holds Air Force Naval Housing Board Liable for Deficiency in Service; Orders Refund and Compensation to Indian Air Force Officer for Delay in Flat Possession
Pranav B Prem
The Delhi State Consumer Disputes Redressal Commission, comprising Ms. Pinki (Judicial Member) and Ms. Bimla Kumari (Member), held the Air Force Naval Housing Board (AFNHB) liable for deficiency in service for its failure to hand over possession of a housing flat within the promised time frame to an Indian Air Force officer. The Commission observed that the complainant, being an allottee and consumer, cannot be made to wait indefinitely for possession while continuing to bear the financial burden of loan installments and rent, and ordered the refund of the entire amount paid along with compensation for mental agony and litigation costs.
Factual Background
The complainant, Sqn Ldr Pushpendra Kumar, a commissioned officer in the Indian Air Force, had applied for a flat under the AFNHB housing scheme at Shatabdi Nagar, Meerut in 2009 by paying ₹1,01,000 as registration charges. As per the allotment letter dated 13.10.2009, a Type A-II flat measuring 1300 sq. ft. was allotted to him for ₹21,75,000, with a promised possession date of mid-2012.
However, the Housing Board, in alleged connivance with the builder (Omaxe Infra & Constructions Ltd.), kept increasing the cost of the flat on various pretexts—first due to increase in super area and later based on alleged suggestions from allottees. By 2014, the final cost communicated to the complainant rose to ₹29,54,982. Later, this cost was further increased to ₹34,52,329 as per the letter dated 21.08.2020. Meanwhile, the complainant paid ₹25,85,079 by 18.07.2014 through loans taken at an interest rate of approximately 10%, but no possession was delivered.
The complainant repeatedly followed up with the Housing Board and also issued a legal notice dated 22.07.2015 seeking refund or possession. However, no resolution was offered, compelling him to file the present consumer complaint, demanding possession or refund with interest, ₹10 lakh as compensation for mental agony, and ₹20,000 as litigation costs.
Contentions of the Parties
The Housing Board objected to the maintainability of the complaint on grounds of pecuniary jurisdiction and the existence of an arbitration clause. It contended that the price escalation was due to an increase in the super area from 1300 sq. ft. to 1450 sq. ft., and that the costs incurred were on a “no profit no loss” basis for the welfare of defence personnel. The Board argued that being a registered welfare society, it was not engaged in “commercial services” and hence did not fall under the purview of the Consumer Protection Act. It also emphasized that the complainant should have pursued arbitration as per the agreement.
In response, the complainant contended that the repeated cost escalation and indefinite delay without justification amounted to deficiency in service. He asserted that despite paying the major portion of the cost, no possession was given, forcing him to bear loan liabilities and rental expenses.
Observations and Findings of the Commission
The Commission overruled the preliminary objections raised by the Housing Board. It clarified that as per the Consumer Protection Act, a society or organization engaged in providing housing falls within the definition of “service provider” and the complainant qualifies as a “consumer.” It also relied on the Supreme Court judgment in Emaar MGF Land Ltd. vs. Aftab Singh [I (2019) CPJ 5 (SC)] to reject the argument that the presence of an arbitration clause ousted its jurisdiction, holding that a consumer forum is competent to entertain such disputes.
On merits, the Commission noted that despite receiving substantial payments exceeding ₹25.85 lakhs, the Housing Board failed to hand over possession even by 2020, nor did it obtain a completion certificate. The possession offer made in September 2020 was invalid in the absence of this certificate, as per the judgment in M/s Treaty Construction vs. M/s Ruby Tower Housing Society [AIR 2019 SC 3676]. The delay was thus found to be unjustified and inordinate.
Further, the Commission relied on Fortune Infrastructure vs. Trevor D'Lima [(2018) 5 SCC 442], where the Supreme Court held that a flat purchaser cannot be made to wait indefinitely, and that failure to deliver possession constitutes clear deficiency in service. The Commission observed that the complainant was not only deprived of possession but also had to bear heavy interest on loans and rental losses due to this delay. The actions of the Housing Board were thus held to be unfair and deficient in service, warranting a refund along with compensation.
Final Decision
In light of these findings, the Delhi State Commission directed the Air Force Naval Housing Board to:
Refund ₹25,85,079 to the complainant.
Pay interest at 6% per annum from the date of each installment received till the date of the judgment (26.05.2025), provided the entire amount is refunded by 26.07.2025.
If the amount is not refunded by 26.07.2025, the interest rate shall increase to 9% per annum until the actual realization of the amount.
Additionally, pay ₹1,00,000 as compensation for mental agony and harassment.
Pay ₹50,000 towards litigation costs.
Accordingly, the complaint was allowed with the above reliefs, and all pending applications were disposed of.
Appearance
Complainant in person
Mr. Bhupinder Kumar, AGM Legal for the Opposite Party No. 1.
Cause Title: SQN LDR Pushpendra Kumar V. Air Force Naval Housing Board
Case No: Complaint Case 1195/2015
Coram: Hon’ble Ms. Pinki [Member (Judicial)], Hon’ble Ms. Bimla Kumari [Member (Female)]
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