Builder Liable for Delay, Construction Defects & Illegal Pre-Possession Maintenance Fees: State Consumer Commission - 2025-09-01

Builder Ordered to Compensate Homebuyers for Delays, Construction Defects, and Unfair Trade Practices

Chandigarh : The State Consumer Disputes Redressal Commission, U.T., Chandigarh, has delivered a significant ruling in favor of homebuyers, holding Ambika Realcon Developers Pvt. Ltd. accountable for a series of violations including delayed possession, severe construction defects, and unfair trade practices. The Commission, comprising President Justice Raj Shekhar Attri and Member Mr. Rajesh K. Arya, ordered the developer to pay substantial compensation, rectify defects, and execute sale deeds for aggrieved homeowners.

---

Case Background

The Commission passed a consolidated order disposing of four separate complaints filed by homebuyers, including Sunil Kumar Bhandari, against Ambika Realcon Developers Pvt. Ltd. The complaints pertained to units in the developer's projects, primarily "La Parisian" in Mohali.

The homeowners raised a litany of grievances, alleging:

- Inordinate delays in handing over possession of their flats.

- Significant construction defects and use of inferior quality materials.

- Unauthorized structural deviations from the approved building plans.

- Illegal charging of maintenance fees before the issuance of completion certificates and handing over possession.

- Failure to provide promised amenities like a clubhouse and proper service lifts.

- Delay in executing sale deeds, depriving buyers of government rebates.

Arguments Presented

The complainants, represented by their counsel, submitted a detailed assessment report from a government-approved engineer. The report meticulously documented "patent defects," including miscalculation of carpet area, structural flaws, poor workmanship, unauthorized construction of ducts restricting light and ventilation, and violation of setback norms between towers.

Ambika Realcon Developers contested the claims, arguing that the delays were attributable to the COVID-19 pandemic. They also contended that the homebuyers had waived their right to compensation by accepting possession. The developer raised preliminary objections, stating that the disputes should be adjudicated by RERA or through arbitration, not the Consumer Commission. Furthermore, they defended the structural changes as "compoundable" deviations for which they had paid a fee to the authorities.

Commission's Legal Analysis and Findings

The Commission systematically dismantled the developer's arguments, reinforcing the primacy of consumer rights.

On Jurisdiction: The Commission firmly rejected the developer's preliminary objections, citing landmark Supreme Court judgments. It relied on Imperia Structures Ltd. v. Anil Patni & Another to hold that the RERA Act does not bar homebuyers from seeking remedies under the Consumer Protection Act. Citing Aftab Singh Vs. Emaar MGF Land Limited , it reiterated that an arbitration clause cannot oust the jurisdiction of a consumer forum.

On Construction Defects: The Commission gave significant weight to the expert Assessment Report, noting that the developer failed to rebut its findings. The judgment highlighted the builder's admission regarding structural deviations, stating that paying a compounding fee does not absolve them of liability to the homebuyers for the inconvenience caused. The Commission observed:

"The candid admission of the opposite party no.1... and also the Assessment Report... itself proves the case of the complainants that there was a gross violation of building code on the part of the opposite parties and also that the construction work of the unit in question was defective and of inferior quality."

On Delayed Possession and Unfair Practices: The Commission found the developer guilty of causing unreasonable delays. While granting a six-month grace period for projects affected by the COVID-19 lockdown, it ruled that compensation was payable for the remaining period of delay. It awarded interest at 9% per annum on the entire amount deposited by the buyers, in line with Supreme Court precedents.

Critically, the Commission deemed the practice of demanding maintenance charges before offering possession and obtaining a completion certificate an "unfair trade practice." It directed the builder to refund any such amounts collected, with interest.

Final Decision and Relief Granted

The Commission partly accepted the complaints and ordered a multi-faceted relief package for the homebuyers. For the "La Parisian" project homeowners, the key directives include:

1. Rectification of Defects: The developer must rectify all defects in common areas, provide the promised service lift and amenities like a clubhouse within three months.

2. Compensation for Defects: A lump sum of ₹5 lakhs is to be paid to each complainant to rectify the defects within their individual units.

3. Delayed Possession Interest: Compensation at 9% p.a. on the total deposited amount for the period of delay.

4. Execution of Sale Deed: The conveyance deed must be executed within 30 days, failing which a penalty of ₹500 per day will be imposed.

5. Mental Agony and Costs: A compensation of ₹75,000 for mental agony and harassment, plus ₹35,000 towards litigation costs.

6. Refund of Maintenance Charges: Any maintenance fees collected before possession must be refunded with 6% interest.

This judgment serves as a strong reminder to real estate developers of their obligations and reinforces the robust protection afforded to consumers under the law.