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2026 Supreme(Online)(SCDRC) 2772

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Poonam Maharshi, Presiding Member, Nisha Amol Chavhan, Member
Kunal Teejesh Gandhi – Appellant
Versus
Rainbow Constructions – Respondent
CONSUMER COMPLAINT NO.CC/604/2018



Advocates:
For the Appellants/Petitioners: Jain
For the Respondents: Patwardhan

A purchaser of a residential flat qualifies as a 'consumer' if the developer fails to prove the purchase was for commercial/investment purposes, and prolonged failure to deliver possession despite payment constitutes a 'deficiency in service' and 'unfair trade practice' entitling the complainant to specific performance or full refund with interest.

Headnote:(A) Consumer Protection Act, 1986 - Sections 2(d), 2(g), 2(r), 12(1)(A), 17, and 26 - Consumer dispute - Delay in delivery of residential flat - Complainant paid 70% of consideration but developer failed to deliver possession for over a decade - Opponents argued complainant was investor - Held, onus is on builder to prove commercial purpose, which was not discharged - Failure to deliver possession within promised time constitutes deficiency in service and unfair trade practice - Complainant entitled to possession or refund with interest and compensation. (Paras 18-24)

Facts of the case:
Complainant booked a residential flat with the Opponents and paid 70% of the consideration. Possession was promised by February 2015, but was not delivered even after a decade. Complainant filed a consumer complaint for possession or refund.

Findings of Court:
The Commission found that the Opponents were deficient in service, the transaction was personal rather than for investment, and the Complainant is entitled to the relief sought.

Issues: Whether the complainant is a 'consumer' and whether there was a deficiency in service by the opponents.

Ratio Decidendi: A purchaser is a consumer unless the builder proves the transaction was for a commercial/investment purpose. Failure to deliver a residential flat within the agreed period despite substantial payment constitutes a deficiency in service and an unfair trade practice.

Result: Complaint allowed with alternatives for possession or refund with 12% interest, plus compensation for mental agony and costs.

Table of Content
1. basis of consumer complaint regarding non-delivery of possession of flat. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10)
2. defence arguments regarding investment nature of transaction and maintainability. (Para 13 , 14 , 15 , 16 , 17)
3. determination of 'consumer' status in real estate bookings. (Para 18 , 19)
4. deficiency in service for non-delivery and liability for fund refunds. (Para 20 , 21 , 22 , 23)
5. granting specific performance or refund with interest as final relief. (Para 24 , 25)

JUDGEMENT

(Delivered on 08/04/2026)

Per : Mrs. Dr. Nisha Amol Chavhan, Member.

1. The Present Consumer Complaint No. CC/203/2017 is filed under Section 17 Read with Section 12(1)(A) of the Consumer Protection Act, 1986 by the complainant against opponents. The Complainant presently working abroad and has executed a General Power of Attorney on dated 22nd July, 2015 in favour of his father viz. Mr. Teejesh V. Gandhi, thereby authorizing him to file, verify, sign complaints & other relevant documents before any appropriate Court of Law/Authority as the case may be.

2. It is the case of the complainant that, the Opponent No.1 is a registered partnership firm and the Opponent No.2 and No.3 are Partners of the Opponent No.1.

3. The complainant submitted that the said Opponents have undertaken the construction/development of the Project known as "Govind Niwas" bearing Survey No.146, Hissa No.3 & 4 and bearing CTS No. 1023,1024/1 to 1024/11 (Pt.) of Village Kandivali, Taluka Borivali.

4. The complainant submitted that he was in search of a residential Flat for his and his family personal use in and around the year 2014, and through his social circle became aware of the building project known "Govind Niwas" which was being constructed by the opponents herein on the said property. The Complainant visited the booking office of the opponents, represented to the Complainant, that the title with respect to the said Property is clear and that they have obtained right and interest with respect to the said property and further informed the following details as such of the said property. That following persons namely (i) Smt. Sulochana Govind Manwacharya; (ii) Smt. Premila Prabhakar Manwacharya; (iii) Smt. Laxmikant Prabhakar Manwacharya; & (iv) Shri. Manish Prabhakar Manwacharya (hereinafter referred to as the "said Original Owners") are the joint owners of the plot of Land bearing Survey No.146, Hissa No.3 & 4 and bearing CTS No. 1023, 1024/1 to 1024/11 (Pt.), admeasuring 835.65 Sq. Yards ie. 698.70 Sq. Mts. of Village Kandivali, Taluka Borivali in the Registration District and sub-district of Mumbai Suburban. The said Original Owners and the said opponents /the Developers entered into a Development Agreement on dated 13th March, 2007, duly registered with the sub-registrar of assurances Borivali No.6 at Bandra under No.BDR-12-1984-2007. By virtue of the said Development Agreement, the said Original Owners have granted in favour of the opponents, the development rights in respect of the said property and have authorized the Developer to demolish the existing structures on the said property and to construct on the said property a new multistore building and further on such terms and conditions as agreed therein.

5. The complainant further submitted that the said Original Owners have also executed in favour of the opponents a duly registered Irrevocable Power of Attorney dated 15th March, 2007 authorizing them to do various acts, deeds, matters and things in respect of the said Property, as more particularly set out therein. In view of the aforesaid, the opponents became entitled to develop the said property and to sell and market the premises in the new building to be constructed by the opponents on the said land. Accordingly, opponents commenced construction on the said property and assured that the possession of the flats will be handed over on or before 28th February 2015.

6. The complainant further submitted that Believing upon the v

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