Pranav B Prem

The Delhi State Consumer Disputes Redressal Commission, presided over by Hon’ble Ms. Bimla Kumari (Presiding Member), has set aside the District Commission’s dismissal order and held Uppal Chadha Hi-Tech Developers Pvt. Ltd. liable for deficiency in service for failing to execute the Buyer’s Agreement and for unlawfully withholding the homebuyer’s money. The Commission directed the developer to refund ₹3,83,166/- with interest, along with compensation for mental agony and litigation costs.

Also Read: Delhi State Consumer Commission: Parsvnath Developers Directed To Refund ₹4 Lakh With Interest For Failing To Deliver Flat In Greater Noida Project

The dispute arose when the complainant, Nitin Sachdeva, booked Flat No. 730 in Tower-8 of the “Dream Homes” Group Housing Project located in Wave City, Ghaziabad (NH-24). He paid a sum of ₹3,83,166/- between June and July 2013, which was duly acknowledged through receipts issued by the builder. Despite receiving almost the entire booking amount, the developer did not execute the mandatory Buyer’s Agreement within the reasonable period promised at the time of booking. The complainant waited nearly two years but was neither provided with an agreement nor given any concrete update on the project’s status. Moreover, the builder unilaterally changed the unit number and super area, which further increased the complainant’s concerns about the transparency of the project.

The complainant repeatedly attempted to contact the developer and sent emails dated 15.04.2015 and 20.05.2015 requesting either an update or a refund. However, the developer failed to respond or take any corrective action. After waiting for a considerable time, he approached the District Forum seeking a refund, interest, and compensation. The District Forum dismissed the complaint, accepting the builder’s argument that the complainant had defaulted on further payments and therefore was not entitled to a refund.

Challenging this view, the complainant filed an appeal before the State Commission. During the appellate proceedings, the Commission noted that the developer had not produced a single document to show any progress in construction, nor had it placed on record any demand letters calling upon the complainant to make additional payments. The absence of these essential documents indicated that the developer’s version regarding payment defaults was unsubstantiated. The Commission observed that when a builder chooses not to execute the Buyer’s Agreement or fails to provide updates on the construction status for years, such conduct constitutes clear deficiency in service. Merely alleging that the buyer defaulted in payments cannot be accepted unless supported by concrete documentary evidence.

The Commission also addressed the preliminary issues raised by the developer with respect to jurisdiction and limitation. It held that the builder maintained its registered offices in New Delhi and therefore the State Commission had the territorial jurisdiction to entertain the complaint. On the issue of limitation, the Commission relied on the principles laid down in Mehnga Singh Khera & Ors. v. Unitech Ltd., wherein it was held that failure to deliver possession or execute an agreement constitutes a continuing cause of action. Since the developer never refused in writing and continued to remain silent despite repeated requests, the Commission held that the complaint was filed within the period of limitation.

The Commission referred to the Supreme Court’s decision in Arifur Rahman Khan & Ors. v. DLF Southern Homes Pvt. Ltd. (2020), which held that failure by a builder to fulfil contractual obligations amounts to deficiency in service. Applying this principle, the Commission held that withholding the complainant’s hard-earned money for years without offering possession, without executing the agreement, and without issuing demand or progress notices was not only unjustified but also amounted to unfair trade practice.

Also Read: Delhi Consumer Commission Grants Relief To Homebuyer; Raises Refund Interest To 12% Against Ahluwalia Contracts Ltd

After evaluating the material on record, the Commission concluded that the developer had no justifiable basis to retain the complainant’s money. It held that the District Commission had erred in dismissing the complaint without appreciating the absence of evidence from the developer’s side. The State Commission therefore allowed the appeal and directed Uppal Chadha Hi-Tech Developers Pvt. Ltd. to refund ₹3,83,166/- to the complainant with interest at 6% per annum from the date of each payment until 30.10.2025, provided the refund is made by 30.12.2025. If the developer fails to refund the amount within this time, the interest rate will automatically increase to 9% per annum until final realization. The Commission further directed the developer to pay ₹50,000 as compensation for mental agony and harassment and an additional ₹50,000 towards litigation costs. 

Appearance

Mr. Gaurav Dua, counsel for the Complainant

Mr. Anurag Ranjan, counsel for the Opposite Party

Cause Title: Nitin Sachdeva vs Uppal Chadha Hi-Tech Developers Pvt. Ltd. & Anr.

Case No: CC No. 1130/2018

Coram: Hon’ble Ms. Bimla Kumari (Presiding Member)