ERA & Omkar Realtors Held Liable For Deficiency In Service Over Delay In ‘Omkar Alta Monte’ Project: Maharashtra Consumer Commission
Pranav B Prem
The Maharashtra State Consumer Disputes Redressal Commission, Mumbai, comprising Hon’ble Mr. Mukesh V. Sharma (Presiding Member) and Hon’ble Ms. Poonam V. Maharshi (Member), held ERA Realtors Pvt. Ltd. (Opposite Party No.1), Omkar Realtors & Developers Pvt. Ltd. (Opposite Party No.2), and ICICI Home Finance Company Ltd. (Opposite Party No.3) liable for deficiency in service and unfair trade practices due to the inordinate delay in handing over possession of a flat in the “Omkar Alta Monte” project located in Malad (East), Mumbai.
Background
The complainants — Vivek Saxena, Mayadevi Saxena, and Shaily Saxena — were Mumbai residents who booked Flat No. 1103 on the 11th Floor, Wing “B” of the Omkar Alta Monte project after receiving a promotional email from ICICI Home Finance Company Ltd. acting as a marketing partner for the project. The total consideration for the flat was ₹1,67,30,500, of which the complainants paid ₹1,42,25,627. Despite multiple assurances, the developer and landowner failed to execute the Agreement for Sale and did not hand over possession of the flat within the stipulated timeline. The complainants contended that the promised possession date of March 2018 was unilaterally extended first to March 2019 and later to December 2020 without consent. They further alleged that the builder changed the main contractor from Larsen & Toubro (L&T) to a local contractor, thereby compromising construction quality.
The complainants also alleged that the MahaRERA possession dates were revised without their approval and that the Opposite Parties ignored a legal notice dated 16.03.2021, prompting them to file the complaint under Section 47 read with Sections 2(6) and 2(47) of the Consumer Protection Act, 2019.
Contentions
The Complainants argued that the Opposite Parties failed to execute the sale agreement, repeatedly extended possession dates without valid justification, and misled buyers with false assurances and promotional materials. They sought possession of the flat or an equivalent alternative, along with interest at 18% per annum, compensation of ₹20 lakhs for mental agony, and ₹1 lakh as litigation cost.
The Opposite Parties opposed the complaint, asserting that it was not maintainable due to the arbitration clause and was barred by limitation. They claimed that the delay resulted from force majeure events such as delays in environmental clearance, litigation, and the COVID-19 pandemic. They also alleged that certain buyers, including the complainants, had defaulted in payments, leading to a shortage of construction funds.
ICICI Home Finance Company Ltd. contended that it acted merely as a marketing facilitator with no contractual obligation and was wrongly impleaded as a party.
Findings of the Commission
The Commission rejected the objection regarding limitation, holding that the cause of action was continuous, as the possession had not yet been delivered. On the issue of misjoinder, the Commission observed that although ICICI Home Finance Company Ltd. had included a disclaimer in its promotional email, its role as a marketing partner in introducing the project to consumers could not absolve it of responsibility. The Commission held that the promotional email fell within the ambit of a “misleading advertisement” under Section 2(28) of the Consumer Protection Act, 1986, as it materially influenced the complainants’ decision to book the flat.
With respect to delay, the Commission noted that the possession date as per the allotment letter was December 2018, and the prolonged delay of nearly five years could not be justified by citing the pandemic or other procedural delays. The Commission observed:“The Opposite Parties cannot take the shield of COVID crisis to be the reason for delay. The registration validity date of a project and the agreed date of possession are two distinct aspects.”
Relying on the judgments of the Supreme Court in M/s Imperia Structures Ltd. v. Anil Patni (AIR 2021 SC 70) and Arifur Rahman Khan v. DLF Southern Homes (2020 (3) RCR (Civil) 544), the Commission reiterated that failure to hand over possession within the contractual timeline constitutes deficiency in service, and that unilateral extension of possession dates amounts to an unfair trade practice. The Commission also took note that despite receiving over 70% of the consideration, the Opposite Parties failed to execute the Agreement for Sale as required under Section 4 of the MOFA Act, and their conduct reflected a clear deficiency in service.
Final Order
The Commission partly allowed the complaint, directing ERA Realtors Pvt. Ltd. (OP-1) and Omkar Realtors & Developers Pvt. Ltd. (OP-2) to jointly and severally:
Execute the registered Agreement for Sale and hand over possession of Flat No. 1103, 11th Floor, Wing “B”, in the Omkar Alta Monte project at Malad (East), along with the Occupancy Certificate and all promised amenities, within two months from the date of receipt of the order.
Pay interest at 8% per annum on ₹1,42,25,627 from 01.04.2018 till the actual date of possession.
Further, ERA Realtors, Omkar Realtors, and ICICI Home Finance Company Ltd. were directed to jointly and severally pay ₹1,00,000 as compensation for mental agony and ₹25,000 towards litigation costs. The complainants were directed to clear any balance consideration at the time of possession, and both sides were permitted to adjust mutual dues at that stage.
Accordingly, the Commission held all three Opposite Parties liable for deficiency in service and unfair trade practice. The complaint was partly allowed, with specific directions to the builders to deliver possession, pay delayed interest, and compensate the complainants for mental distress and litigation expenses.
Caus Title: Vivek Saxena & ors Vs. ERA Realtors Pvt. Ltd. & ors
Case No: CC/21/172
Coram: Hon’ble Mr. Mukesh V. Sharma (Presiding Member), Hon’ble Ms. Poonam V. Maharshi (Member)
