Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(SCDRC) 3034

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
Mukesh Kumar Aggarwal – Appellant
Versus
Suncity Projects Pvt. Ltd. – Respondent
COMPLAINT CASE NO.- 64/2017

Advocates:
For the Appellants/Petitioners: Akhil Mittal
For the Respondents: Amit Agarwal

A developer cannot forfeit more than 10% of the total sale consideration as earnest money absent proof of actual loss, and failure to deliver possession of a booked plot constitutes a continuous wrong and recurring cause of action.

Headnote:(A) Consumer Protection Act, 1986 - Section 2(1)(d), 2(1)(g) and 24A - Housing project - Deficiency of service - Failure to handover possession - Forfeiture of earnest money - Limitation - Complaint filed within two years from the date of cancellation of allotment is within limitation - Failure to deliver possession constitutes a continuous wrong and recurrent cause of action (Paras 19, 21)

(B) Consumer - Complainants booking residential plot - Allegation of commercial purpose by Opposite Party - Onus to prove commercial purpose lies on the Opposite Party - Mere assertion that purchase is for investment without documentary evidence is insufficient (Paras 14-16)

(C) Forfeiture of Earnest Money - Reasonable amount - Forfeiture exceeding 10% of total sale consideration is unreasonable in absence of proof of actual loss - Direction for refund after deduction of 10% of total price of the plot (Paras 39-41)

Facts of the case:
Complainants booked a residential plot with the Opposite Party in 2011. Despite payment of substantial consideration, the Opposite Party failed to handover possession within the agreed timeline. The Opposite Party claimed the Complainants defaulted on payments, sent reminder notices, and eventually cancelled the allotment in October 2016. Complainants denied receiving notices and sought possession or refund of the amounts deposited.

Findings of Court:
The Commission held that the Complainants are consumers as no evidence of commercial activity was provided by the Opposite Party. The complaint was found to be within limitation as the failure to deliver possession is a recurring cause of action. The Commission found the Opposite Party deficient for failure to deliver possession, but also noted default by the Complainants in clearing dues. It restricted the forfeiture to 10% of the total price, ordering a refund of the balance with interest.

Issues: Whether the purchase was for commercial purpose; whether the complaint was barred by limitation; and the reasonableness of the forfeiture amount.

Ratio Decidendi: A developer cannot forfeit more than 10% of the total sale consideration as earnest money in the absence of proof of actual loss; furthermore, the failure to hand over possession constitutes a recurring cause of action within the scope of consumer protection laws.

Result: Complaint partly allowed.

Table of Content
1. complaint details regarding deficiency of housing service. (Para 1 , 2 , 3 , 4)
2. opposite party's defense and preliminary objections. (Para 5 , 6 , 7 , 8 , 9)
3. status of the complainant as a consumer. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16)
4. limitation period and recurring cause of action. (Para 17 , 18 , 19 , 20 , 21)
5. commission's jurisdiction over housing construction services. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29)
6. determination of service deficiency and receipt of reminders. (Para 30 , 31 , 32 , 33 , 34 , 35 , 36)
7. rationality of earnest money forfeiture and final relief. (Para 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45)

CORAM:

HON’BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)

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

Present: Mr. Akhil Mittal, counsel for the Complainant.

Mr. Amit Agarwal, counsel for the OP appeared through VC.

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

JUDGMENT

1. The present complaint has been filed by the Complainants before this Commission alleging deficiency of service by the Opposite Party and has prayed the following reliefs:

a) Direct the OP to handover the possession of the plot no. B-266, measuring 502.32 Sq. Yds. in block no. B Sector 35, 'SUNCITY ROHTAK I situated at Sector 34(Part), 35,36, Rohtak-Sonipat Road, Rohtak, Haryana upon receipt of remaining payment from the complainant as per the Payment Plan A dated 26.04.11.

b) Direct the OP to not to allot the said plot to any third party or to create any third party interest in the said plot during the pendency of this complaint.

c) Direct the OP to pay compensation for harassment, financial loss and mental agony in the sum of Rs.5,00,000/-.

d) Direct the OP to pay the cost of the present litigation.

e) Pass any other order as this Hon'ble Forum may deem fit and proper in the facts and circumstances of the case.

2. The brief facts necessary for the adjudication of the present complaint are that the Complainants had originally booked a plot measuring 250 sq. yds. with the Opposite Party in a proposed township at Ghaziabad by paying an amount of Rs.5,62,500/-. However, the said project could not be started as the necessary permissions were not granted by the concerned authorities. Thereafter, upon the assurance of the Opposite Party, the Complainants vide application dated 07.06.2010, booked a residential plot bearing No. B-266, measuring 502.32 sq. yds., in the project namely “Suncity Rohtak” of the Opposite Party, situated at Sectors 34, 35, and 36, Rohtak-Sonipat, Haryana. The Complainants paid a sum of Rs.17,87,178/- towards the booking of the said plot and the earlier amount of Rs.5,62,500/- paid for the original plot was duly adjusted in the said project. Subsequently, an Agreement dated 26.04.2011 was executed between the parties with respect to the said plot for a total basic sale consideration of Rs.23,88,532/-. The Opposite Party assured that possession of the said plot would be handed over within 12 months from the date of execution of the said Agreement. However, the Opposite Party failed to hand over possession within the stipulated period.

3. Moreover, after a delay of more than 20 months, the Opposite Party vide letter dated 17.12.2012, offered possession of the said plot to the Complainants subject to payment of the balance amount. The Complainants had already paid a total sum of Rs.26,51,998/- till the date of the said offer of possession, whereas the outstanding amount was stated by the Opposite Party to be Rs.9,98,864/-. The Complainants were provided with incomplete and unclear details regarding the interest and other charges allegedly payable on account of delay in payment. Therefore, the Complainants requested the Opposite Party to furnish the correct and detailed statement of their liability so that they could proceed with the payment. The Complainants also visited the office of the Opposite Party; however, no further communication was received after the issuance of the possess

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2026 Supreme(Online)(SCDRC) 3034

STATE CONSUMER DISPUTES REDRESSAL COMMISSIONSangita Dhingra Sehgal, President, Bimla Kumari, MemberMukesh Kumar Aggarwal – AppellantVersusSuncity Projects Pvt. Ltd. – RespondentCOMPLAINT CASE NO.- 64/2017

A developer cannot forfeit more than 10% of the total sale consideration as earnest money absent proof of actual loss, and failure to deliver possession of a booked plot constitutes a continuous wrong and recurring cause of action.

Cases Referred (1)

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
Mukesh Kumar Aggarwal – Appellant
Versus
Suncity Projects Pvt. Ltd. – Respondent
COMPLAINT CASE NO.- 64/2017