Karnataka Consumer Commission Directs Frontier Shelters to Deliver Flat; Holds Builder Liable for Delay Despite Receiving 95% Payment
Pranav B Prem
The Karnataka State Consumer Disputes Redressal Commission (Principal Bench, Bengaluru), comprising Justice T.G. Shivashankare Gowda (President) and Ms. Divyashree M. (Lady Member), has held Frontier Shelters Pvt. Ltd. and its Managing Partner liable for deficiency in service for failing to deliver a flat within the promised time despite receiving 95% of the total sale consideration. The Commission directed the developer to complete the project and hand over possession, besides awarding compensation to the homebuyer.
The complainant, Ruma Mohandas Gopani, booked a 3+Study BHK apartment (Flat No. 5091, measuring 1937 sq. ft.) in the “Frontier Heights” project and paid a booking amount of ₹3,00,000. A sale and construction agreement dated 26 August 2019 fixed the total consideration at ₹96,71,522, and required the developer to hand over possession by 31 March 2020, with a six-month grace period. The complainant paid instalments totalling ₹91,87,717, i.e., 95% of the sale consideration. To fund the payments, she availed a loan of ₹20,00,000 from HDFC Bank and repaid it with ₹2,65,128 in interest.
Despite receiving almost the entire payment, the Opposite Parties failed to complete the flat, provide amenities or obtain an occupancy certificate. Photographs produced on record showed the construction was still incomplete. The complainant alleged deficiency in service and unfair trade practice, pointing out that the agreed delay compensation of ₹5 per sq. ft. per month was unreasonably low compared to the market rent of around ₹80,000 per month for similar flats. She sought possession, enhanced compensation, repayment of interest, and litigation costs.
The developer argued that the delay was due to a wrongful RERA extension and a High Court stay order restricting the sale of 54 flats. It claimed most of the construction was completed and expressed readiness to hand over possession once remaining payments were made. It also denied having received ₹91,87,717 and opposed the claim for delay compensation. The counsel sought time until March 2026 to complete the project.
After examining evidence, the Commission found that the developer had indeed received ₹91,87,717 and failed to adhere to the contractual timeline. It rejected the defence based on the High Court stay order, noting that the restriction applied only to 54 out of 266 flats and did not prevent the Opposite Parties from completing construction. The Commission held that the Opposite Parties could not indefinitely delay possession after collecting 95% of the consideration, and their conduct amounted to clear deficiency in service.
The Commission upheld the agreed delay compensation clause of ₹5 per sq. ft. per month, observing that when parties have contractually fixed a rate, the complainant cannot seek a higher amount without evidence showing the agreed rate is unreasonable. However, it held that the Opposite Parties’ delay caused mental agony and financial hardship.
The Commission partially allowed the complaint. It directed Frontier Shelters Pvt. Ltd. and its Managing Partner to complete the project and hand over legal possession of Flat No. 5091 with all agreed amenities and the occupancy certificate within three months. They were further directed to pay delay compensation at ₹5 per sq. ft. per month on 1937 sq. ft. from 1 October 2020 until delivery, as well as ₹10,00,000 for mental agony and ₹1,00,000 towards litigation costs.
Cause Title: Ruma Mohandas Gopani vs Frontier Shelters Pvt., Ltd.
Case No: SC/29/CC/69/2024
Coram: Justice T.G. Shivashankare Gowda (President), Ms. Divyashree M. (Lady Member)
