Pranav B Prem

The Delhi State Consumer Disputes Redressal Commission, comprising Justice Sangita Dhingra Sehgal (President) and Ms. Pinki (Member Judicial), has held M/s K.D.P. Infrastructure Pvt. Ltd. liable for deficiency in service after the builder failed to hand over possession of an apartment within the stipulated time under the Apartment Buyer Agreement. The Commission also found that the builder had wrongfully retained the complainants’ money for an inordinately long period despite receiving substantial payments.

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The complainants, Reena Aggarwal and Dr. R.S. Gupta, had booked Apartment No. A-203 on the second floor of Tower-A in the “Grand Savana” project at Raj Nagar Extension, Ghaziabad. The Apartment Buyer Agreement was executed on 24.09.2009, under which the builder was required to deliver possession within 36 months, i.e., by 24.09.2012. A Tripartite Agreement with Axis Bank (Opposite Party No. 2) was also executed for a loan component.

The complainants paid a total of ₹54,21,210, including a loan amount of ₹49,85,000 disbursed by Axis Bank. Despite these payments, when the complainants visited the site in April 2017, they discovered that the project was significantly behind schedule, and no satisfactory explanation was offered by the builder. They then requested a refund through an affidavit dated 08.04.2017, and, being unable to continue paying EMIs without progress, surrendered their rights to the bank. However, the builder failed to refund the money either to the complainants or to the bank, compelling them to approach the Commission.

Opposite Party No. 1 contended that the complaint was not maintainable due to alleged lack of territorial and pecuniary jurisdiction and attributed delays to the complainants’ alleged default in payment. Axis Bank submitted that no cause of action existed against it as its role was confined to loan disbursement. Both parties denied any deficiency in service.

The Commission first addressed jurisdictional objections. It held that territorial jurisdiction was established because the registered office of the builder is located within Delhi. As for pecuniary jurisdiction, the Commission found that the total monetary claim of ₹48,77,633 fell within the limits prescribed under Section 17 of the Consumer Protection Act, 1986.

On merits, the Commission examined the contractual obligations under the Apartment Buyer Agreement. Under Article 11.5, K.D.P. Infrastructure was required to deliver possession within 36 months. The Commission noted that the builder had received ₹40,62,346 from the complainants as per the payment receipts and yet failed to complete the project even years after the stipulated date. This prolonged delay, coupled with failure to refund the amount, was held to be a breach of contractual duties and a clear case of deficiency in service within the meaning of Section 2(1)(g) of the Consumer Protection Act, 1986.

The Commission relied on the Supreme Court’s decision in Arifur Rahman Khan & Ors. v. DLF Southern Homes Pvt. Ltd., where delay in possession was held to constitute a shortcoming in performance amounting to deficiency in service. Following this reasoning, it held that retaining the complainants’ hard-earned money for years without delivering possession violated statutory and contractual obligations.

Ultimately, the Commission directed K.D.P. Infrastructure to hand over physical possession of the apartment to the complainants by 28.12.2025, or, in the alternative, refund ₹40,62,346 with 6% interest from the dates of respective payments till 28.10.2025. If the builder failed to make the payment by 28.12.2025, the interest rate would increase to 9% per annum until realization. The Commission also awarded ₹2,00,000 for mental agony and harassment and ₹50,000 towards litigation costs, holding the opposite parties jointly and severally liable.

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The complaint was accordingly allowed, reaffirming that builders who fail to meet contractual timelines cannot withhold consumers’ money indefinitely and must face legal consequences for delayed possession.

Cause Title: Mrs. Reena Aggarwal Vs M/S. K.D.P. Infrastructure Pvt. Ltd

Case No: CC/342/2017

Coram: Justice Sangita Dhingra Sehgal (President), Ms. Pinki (Member Judicial)