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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
A.P Sahi, President and Bharatkumar Pandya, Member
Arunima Palace Residents Welfare Association (Regd.) – Complainant
versus
Tarunika Gaur Housing & Constructions Ltd. – Opp. Parties
Consumer Case No. 287 of 2013
Decided on 10.12.2025
(A) Consumer Protection Act, 1986 – Sections 2(1)(d), 12 and 14 – Housing – Deficiency in Service – Unfair Trade Practice – Locus Standi of Residents Welfare Association (RWA) – Limitation – Continuing Cause of Action – Completion Certificate – Binding Nature of Brochure Promises – Complaint Partly allowed.
(B) Consumer Protection Act, 1986 – Section 2(1)(d) – ’Consumer’ – Locus Standi of RWA – Privity of Contract – Voluntary vs. Statutory Association – Held, an Association of Apartment Owners (RWA), whether formed voluntarily or under statutory mandate (e.g., U.P. Apartment Act), acts as the statutory custodian and beneficiary of common areas and facilities – It is competent to file a complaint regarding deficiencies in common amenities in its own right – The fact that some original allottees have sold their units does not disqualify the RWA from representing the collective interest.
(C) Limitation – Section 24-A – Continuing Cause of Action – Possession vs. Statutory Obligations – Held, mere handing over of possession does not extinguish the limitation period if statutory obligations remain unfulfilled – The failure to obtain a Completion Certificate constitutes a “continuing wrong” and a “continuing cause of action” – Furthermore, the execution of a Memorandum of Understanding (MOU) between the Builder and RWA acknowledging pending works extends the limitation period.
(D) Deficiency in Service – Brochure Promises vs. Allotment Letter – The “Enticement” Doctrine – Held, representations made in a brochure are “foundational enticements” that induce buyers to invest – A Builder cannot escape liability for unfulfilled brochure promises (e.g., Green Area, Sports Courts, Club facilities) by arguing that the subsequent Allotment Letter or Agreement was silent on them or reserved the Builder’s rights – The Builder must be held accountable to its representations.
(E) Housing – Specific Amenities – Evidence – Held – Failure to provide 80% green area and promised Tennis/Badminton courts constitutes deficiency. Compensation of Rs.8.6 Lakhs awarded – Non-provision of specific facilities (Steam, Sauna, Library) promised in the brochure amounts to Unfair Trade Practice – Compensation of Rs.45 Lakhs awarded. Claim rejected as Complainant failed to prove that ECE lifts were inferior or not “equivalent” to OTIS as promised – Failure to provide two guest houses (on payment basis) is a deficiency – Nominal compensation of Rs.5 Lakhs awarded – Direction issued to Builder to obtain and hand over the certificate within 6 months.
Result: Complaint Partly allowed.
Key Points: - The judgment holds that an RWA has consumer status and locus standi to file complaints on behalf of its members for common facilities (!) (!) (!) . - It treats non-provision of completion certificate as a continuing wrong/continuing cause of action, extending or interrupting limitation (!) (!) (!) . - It establishes that brochure promises are binding enticements and cannot be fully nullified by allotment letters or MOUs; brochure promises regarding common amenities remain actionable (!) (!) (!) . - The MOU dated 20.01.2013 is interpreted as extending obligations to complete promised facilities and upgrade deficiencies by a specified date (!) (!) (!) . - The complaint’s allegations of deficiencies in amenities like green area, sports facilities, and club, and the awarding of compensation are upheld in part, with specific monetary awards and directions to obtain completion certificates (!) (!) (!) . - The Commission directs the builder to pay compensation and to obtain/hand over the Completion Certificate within six months (!) . - The decision discusses the "Enticement Doctrine" where brochure representations create a liability for unfulfilled promises, notwithstanding later contractual modifications (!) (!) . - The tribunal confirms that the association may be the recipient of common-area benefits and acts as custodian of those amenities (!) (!) . - It rejects certain defences (limitation, privity, and lack of consumer status) based on statutory protections and the ongoing nature of promised facilities (!) (!) (!) . - The order culminates in payment of Rs.60 lakhs plus interest and completion certificate within six months (!) (!) .
JUDGEMENT
Bharatkumar Pandya, Member.—Heard Mr. Sunil Kumar, Advocate for the Complainant and Mr. Karunesh Tandon, Advocate, for Opposite Parties. The present consumer complaint arises out of alleged deficiency in service and unfair trade practices committed by M/s Tarunika Gaur Housing & Construction Ltd. (hereinafter “OP”) in connection with the housing project Arunima Palace, situated at Plot No. GH-4, Sector-4, Vasundhara, Ghaziabad, U.P. The complainant, Arunima Palace Residents Welfare Association is a society registered under the Societies Registration Act, 1881, for safeguarding the interests of its members who are the residents and allottees of flats in the said project. Complainant has approximately 180 members, all of whom purchased flats in the project. Shri H.L. Bhandari, the Secretary of the Complainant Society, has been duly authorized under its bye-laws as well as through an Executive Body Resolution dated 10.08.2013 (Annexure P-1) to file this complaint. In 2007, OP builder widely advertised and launched the booking for its residential project, promising modern amenities, recreational facilities, green open spaces, and a healthy living environment. During 2007-2008, the members of the Complainant-society, lured by the attractive brochure and layout plan, booked their flats under various payment plans. It was represented that the project would consist of well-developed infrastructure, including a community centre, swimming pool, poolside restaurant, guest houses, health club, library, sports facilities, jogging tracks, children’s play area, and uninterrupted power and water supply. The OP got its layout plan sanctioned from U.P. Avas Vikas Parishad, and subsequently, on 25.02.2010, the compounded map was approved after payment of regularization charges. As per the sanctioned plan, the plot area measured 7,559.26 sq. mtrs. with an FAR of 1.5, and an additional 0.5 FAR was purchasable, bringing the total saleable area to 14,353.90 sq. mtrs. The building plan sanction as approved permitted construction of only 151 units, but the OP allegedly constructed 180 flats, thus breaching statutory norms. Despite handing over possession of flats during 2009-2010, OP failed to develop the promised amenities, did not complete statutory obligations such as obtaining completion certificate, and also engaged in unauthorized construction and encroachment on open areas, fire escape zones, and parking spaces.
2. Over the time, the residents and the complainant realized that the promises made in brochures and advertisements were not being fulfilled. The Complainant addressed multiple representations and grievances to the OP. A letter dated 21.12.2009 (Annexure P-6) was written to Mr. Sanjeev Gaur, the Managing Director of the OP, demanding completion of the community facilities. Similarly, a letter was sent to the District Magistrate, Ghaziabad, on 20.05.2011 (Annexure P-7), seeking intervention to ensure the completion of the pending works. In 2010, the residents formed the Arunima Palace Residents Welfare Association. On 06.08.2012, Complainant approached the Vice-Chairman of Ghaziabad Development Authority (GDA) under the U.P. Apartment Act, 2010, for enforcement of legal obligations of the OP. Consequently, on 21.11.2012, the Competent Authority directed the OP to hand over the community facilities, complete pending works, and submit a Deed of Declaration as per law. The authority also asked the Executive Engineer, Vasundhara Zone, U.P. Avas Vikas Parishad, to ensure the issuance of a completion certificate. However, OP failed to comply with these directions.
2.1 Subsequently, a meeting was held between the Complainant and the OP on 10.12.2012, minutes were drawn up and signed by both parties (Annexure P-8).In this meeting, OP assured that necessary documents would be handed over and all pending facilities would be completed. A Memorandum of Understanding (MOU) dated 20.01.2013 (Annexure P-9) was executed between the parties, wh
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