Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(SCDRC) 38795

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
Sanjay Rana – Appellant
Versus
Parsvnath Builder Ltd. – Respondent
COMPLAINT CASE NO.- 1985/2017

Advocates:
For the Appellants/Petitioners: Sagar Shivam Jaiswal
For the Respondents: T. P. Chauhan, Tanvi Garg, Shambhani Singh

Failure of a real estate developer to deliver possession of a flat within the contractually stipulated period constitutes a continuous wrong, amounting to deficiency of service and providing a recurrent cause of action for the consumer to seek a refund along with compensation.

Headnote:(A) Consumer Protection Act, 1986 - Section 2(1)(d), 24A and 2(1)(g) - Deficiency of service - Real Estate - Non-delivery of possession - Complainant purchased a flat, but the builder failed to deliver possession within the stipulated 36-month period - The builder raised objections regarding the maintainability of the complaint, arguing it was for commercial purposes and barred by limitation - Held, failure to deliver possession constitutes a continuous wrong and a recurrent cause of action, hence the complaint is within limitation - Further, the burden of proving that the purchase was for a commercial purpose rests on the builder, who failed to produce evidence - The developer is directed to refund the deposited amount along with interest and compensation for mental agony and litigation costs. (Paras 12-15, 18-19, 30, 32, 35-37)

Facts of the case:
The complainant booked a flat with the opposite party in 2006, paying Rs. 18,98,592/-. Despite a contractual obligation to complete construction within 36 months, the builder failed to deliver possession or provide updates on the site status. The complainant served a legal notice in 2017, but was met with no response, leading to the filing of this consumer complaint.

Findings of Court:
The court rejected the builder's contentions that the complaint was time-barred or for a commercial purpose. It found the developer deficient in service for failing to complete the project within the stipulated time, thereby causing harassment and mental agony to the complainant.

Issues: 1. Whether the complainant is a 'consumer' under the Consumer Protection Act, 1986? 2. Whether the complaint is barred by limitation? 3. Whether the builder committed a deficiency in service warranting a refund of the amount paid?

Ratio Decidendi: Failure to deliver possession of a flat within the contractually stipulated period is a 'deficiency' in service. A builder cannot keep a consumer waiting indefinitely for possession. Because the failure to deliver possession is a continuous wrong, the limitation period does not bar the claim as long as the possession remains undelivered.

Result: Complaint allowed; Opposite party directed to refund the principal amount with interest, plus compensation for mental agony and litigation costs.

Table of Content
1. summary of facts involving non-delivery of possession by the builder. (Para 1 , 2 , 3)
2. preliminary objections regarding maintainability, limitation, and commercial status. (Para 4 , 5 , 6 , 7 , 8 , 9)
3. determination of consumer status and burden of proof for commercial usage. (Para 10 , 11 , 12 , 13 , 14 , 15)
4. application of limitation period where non-delivery is a continuous wrong. (Para 16 , 17 , 18 , 19)
5. jurisdiction of the commission for housing construction services. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27)
6. establishment of deficiency of service due to contractual breach. (Para 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35)
7. final orders for refund, interest, and compensation. (Para 36 , 37 , 38 , 39 , 40)

CORAM:

HON’BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)

HON’BLE MS. BIMLA KUMARI, MEMBER (FEMALE)

Present: Mr. Sagar S. Jaiswal, Counsel for the complainant appeared through VC.

Mr. T. P. Chauhan, Ms. Tanvi Garg and Ms. Shambhani Singh, Counsel for the OP (Email :tgarg@knm.in)

PER: HON’BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)

JUDGMENT

1. The present complaint has been filed by the Complainant before this commission alleging deficiency of service on the part of Opposite Party and has prayed the following reliefs:

(A) Pass an order directing the respondent / opposite party to hand over the possession of the flat bearing no. T-10/1101, Greater Noida, U.P. to the complainant, and / or,

(B) Award a sum of Rs.18,98,552/- (Rupees Eighteen Lakhs Ninety eight thousand five hundred fifty two only) alongwith an interest @ 24% p.a. from the date of booking till the realization of the amount, and / or,

(C) Award a sum of Rs.5,00,000/-towards the damages for loss suffered by the complainant on account of non delivery of the aforesaid flat, and /or,

(D) Award a sum of Rs.20,00,000/- as compensation towards the harassment and mental agony suffered by the complainant, and / or,

(E) award cost of the present proceedings in favour of the complainant which this Hon'ble Commission may deem fit and proper, and / or,

(F) Pass such other or further order as this Hon'ble Commission may deems fit and proper in the facts and circumstances of the case in favour of the complainant and against the opposite parties.

2. Brief facts necessary for the adjudication of the present matter are that on 02.05.2006, the Complainant booked a flat in the project “Parsvnath Privilege” of the Opposite Party, situated at Greater Noida, Uttar Pradesh by paying a booking amount of Rs. 10,00,000/-. The Opposite Party vide allotment letter dated 23.02.2007, allotted flat bearing no. T-10/1101 with a super area of 1855 sq. ft. for a basic sale price of Rs. 52,86,750/-. Thereafter, a Flat Buyer Agreement dated 16.06.2007 was executed between the parties. As per Clause 10(a) of the said Agreement, the Opposite Party was required to complete the construction of the flat within 36 months from the date of commencement of construction of the particular block in which the flat is located. However, till date, the Opposite Party has neither completed the construction of the said flat nor handed over possession to the Complainant. Furthermore, the construction of the said project has been extremely slow and presently the progress at the site has come to a standstill. The Complainant made several communications regarding the status of construction and possession but the Opposite Party failed to provide any satisfactory response.

3. The Complainant had opted for the construction-linked payment plan and paid a total amount of Rs. 18,98,592/- as and when demanded by the Opposite Party. However, the Opposite Party never disclosed the actual status of construction nor apprised the Complainant of the progress at the site. The Complainant also served a legal notice dated 22.09.2017 upon the Opposite Party seeking either possession of the flat or in the alternative; refund of the amount deposited along with interest but was of no avail.

4. The Opposite Par

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2025 Supreme(Online)(SCDRC) 38795

STATE CONSUMER DISPUTES REDRESSAL COMMISSIONSangita Dhingra Sehgal, President, Bimla Kumari, MemberSanjay Rana – AppellantVersusParsvnath Builder Ltd. – RespondentCOMPLAINT CASE NO.- 1985/2017

Failure of a real estate developer to deliver possession of a flat within the contractually stipulated period constitutes a continuous wrong, amounting to deficiency of service and providing a recurrent cause of action for the consumer to seek a refund along with compensation.

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
Sanjay Rana – Appellant
Versus
Parsvnath Builder Ltd. – Respondent
COMPLAINT CASE NO.- 1985/2017