WTC Noida Held Liable By Delhi State Commission For Delay In Possession And Non-Payment Of Assured Returns
Pranav B Prem
The Delhi State Consumer Disputes Redressal Commission, led by Justice Sangita Dhingra Sehgal (President) and Mr. J.P. Agrawal (General Member), has held WTC Noida Development Company liable for deficiency in service due to its failure to deliver possession of a booked flat within the promised timeline and non-payment of assured returns under a 100% down payment plan. The Commission directed the developer to refund the amounts paid, release pending assured returns, and compensate the complainant for mental agony and litigation costs.
Background
The case arose from a complaint filed by Ms. Manpreet Sharma, who had booked a flat in the "World Trade Centre" project developed by WTC Noida Development Company. A Developer-Buyer Agreement was executed on 13th August 2014 after she paid a booking amount of Rs. 2 lakh. Opting for a 100% downpayment plan, she subsequently paid Rs. 82,27,052 between January 2014 and November 2014. Under the plan, the Developer assured her of assured returns till the possession was offered.
As per Clause 5.6 of the agreement, the construction was to be completed within four years with an additional grace period of six months, i.e., possession was due by 13.02.2019. However, construction was delayed, and possession was neither completed within the original period nor even by the extended date of February 2020. The Developer later unilaterally altered the assured returns arrangement, citing the COVID-19 pandemic, by offering only partial returns and deferring payments.
Despite a revised understanding wherein 50% of assured returns were to be paid and the balance adjusted, the Developer failed to make consistent payments beyond August, September, and October 2020. Left with no alternative, the Complainant sent a legal notice dated 25th August 2022 but did not receive satisfactory compliance. Consequently, she filed a complaint before the State Commission seeking refund, assured returns, and compensation.
Contentions of the Developer
The Developer contested the complaint, arguing that the Complainant did not qualify as a 'consumer' under Section 2(7) of the Consumer Protection Act, 2019, asserting that the purchase was for commercial purposes to earn profits. It further contended that the agreement stipulated limited remedies in case of delayed possession and that the delays were caused by force majeure events, specifically the COVID-19 pandemic.
Observations and Findings
Rejecting the Developer’s arguments, the Commission observed that the Complainant had paid the entire basic sale price and hence qualified as a 'consumer.' Relying on the Supreme Court’s judgment in Rohit Choudhary & Anr. v. M/s. Vipul Ltd. [Civil Appeal No. 5858/2017, the Commission emphasized that purchasing a property for self-employment or livelihood does not disqualify one from being a consumer. There was no evidence that the Complainant was engaged in regular buying and selling of properties for profit.
On the limitation issue, the Commission applied the settled principle that failure to deliver possession constitutes a "continuous wrong" and thus a "recurrent cause of action." Citing Mehnga Singh Khera v. Unitech Ltd. [I (2020) CPJ 93 (NC)], it held that the complaint, filed within two years of the last communication and unresolved possession, was well within the prescribed limitation period.
On deficiency of service, the Commission noted that the Developer was obligated to offer possession within four years plus a six-month grace period from the agreement date, which ended in February 2019, much before the COVID-19 outbreak. Despite this, the possession was not handed over, and even the construction remained incomplete as per the Developer’s own admission. No Occupation Certificate had been obtained, and no documentary evidence was produced showing that possession could soon be offered.
The Commission referred to Arifur Rehman Khan and Ors. v. DLF Southern Homes Pvt. Ltd. [2020 (3) RCR (Civil) 544], where the Supreme Court emphasized that delay in handing over possession amounts to deficiency in service. It reiterated that buyers cannot be made to wait indefinitely for the properties they have fully paid for, relying on Fortune Infrastructure v. Trevor D'Lima [(2018) 5 SCC 442]
Regarding assured returns, the Commission found that the Developer initially assured payment of returns till possession, and even after revising the terms during COVID-19, failed to adhere to the revised commitments. While partial payments were made for three months, no regular returns were thereafter paid despite repeated assurances. The Commission held that such discontinuation was unjustified and further amounted to deficiency in service.
Final Directions
In light of these findings, the State Commission passed the following directions against the Developer:
Refund Rs. 82,27,052/- to the Complainant, along with 6% interest per annum from the date of each payment till the date of the judgment (26.03.2025).
If the refund is not made within two months (i.e., by 26.05.2025), the Developer shall pay 9% interest per annum from the date of each installment until realization.
Pay Rs. 9,70,363/- towards outstanding assured returns from March 2020 till the filing of the complaint, in line with the revised agreement.
Pay Rs. 3,00,000/- as compensation for mental agony and harassment.
Pay Rs. 50,000/- towards litigation costs.
The Commission found the Developer guilty of gross deficiency in service and unfair trade practice, causing prolonged hardship to the Complainant. Accordingly, the complaint was allowed, and the judgment directed prompt compliance.
Appearance
For Complainant: Mr. Divjot Singh Bhatia & Mr. Shreesh Chadha, Advocates
For Opposite Parties: Mr. Vijay Kr. Sharma, Advocate
Cause Title: Ms. Manpreet Sharma V. WTC Noida Development Co. Pvt. Ltd. & 2 Ors.
Case No: Complaint Case No.191/2022
Coram: Hon’ble Justice Sangita Dhingra Dehgal [President], Hon’ble Mr. J.P. Agrawal [Member (General)]
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