Builder directed to pay compensation for delayed flat delivery - India Consumer Forum

Builder directed to pay compensation for delayed flat delivery


Mrs Veena Khanna of New Delhi
M/s. Ansal Properties and Adharshila Towers, New Delhi

Before National Consumer Disputes Redressal Commission, New Delhi
Order dated 9th July 2007


Mrs. Veena Khanna(Complainant) of New Delhi had offered to purchase a flat for a total consideration of Rs.23,33,344/-from M/s. Ansal Properties and Adharshila Towers, New Delhi (Respondents) in response to their advertisement. The Complainant paid a total sum of Rs.15,12,000/- on different dates and stopped payment of the balance amount as there was no progress in the construction work. The Opposite Party had agreed to deliver the flat by 1.6.1999 but the flat was not delivered as it was not constructed.

The Complainant had demanded refund of the deposited amount with interest @ 18% which the Opposite party refused to pay. Complainant filed a petition on 13.09.2000 before the State Commission, Delhi. By judgement and Order dt.06-12-2005, the State Commission directed the Opposite Party to refund the amount of Rs.15,00,000 with interest @ 13% p.a. from the date of deposit of the last instalment till the date of payment of refund. In the alternative it also directed that if the Opposite Parties choose to handover the possession of the flat, the order of refund with interest will not come into operation.

Against the above Order of State Commission the Complainant Mrs. Veena Khanna filed an Appeal in the National Consumer Dispute Redressal Commission praying that the Opposite Parties be directed to deliver the possession of the flat and also compensation for delay in delivery or adequate compensation should be awarded so that she can purchase a flat of the size. It was argued that as the afore-quoted order passed by the State Commission gave preferable alternative to the Opposite Parties, and the builder took undue advantage of it and refunded the amount deposited by the complainant with interest, as directed, because of the rise in the prices of the immovable properties. Opposite Parties took advantage only because an option was given to either refund the amount or to hand-over possession of the flat and no adequate compensation was awarded.

The Opposite Party argued that it is wrong and is denied that any fixed time period was stipulated between the parties or that Respondents have failed to complete the construction. It is also wrong and is denied that any deficiency in service has been committed by Respondents. The correct position is that structure of the flat has already been completed and finishing jobs have already been taken in hand and are progressing rapidly. The flat is likely to be completed in all respects shortly and the possession will then be handed over to the Complainant. The Complainant is not entitled to resile from the concluded contract between the parties in a unilateral and arbitrary manner or to ask for refund of the amounts already paid to the Respondents or any Interest thereon. The Respondents have already invested a huge amount on the construction of the flat on the basis of construction agreement between the parties and it is too late in the day for Complainant to resile from the said construction agreements. It is wrong and is denied that the Complainant has suffered any damage as alleged or at all. It is also denied that the Complainant has suffered any mental agony, mental torture or harassment at the hands of the Respondents. The complainant is put to a strict proof of each and every allegations made by her.

With regard to allegations made in para 8 wrongly numbered as para 9. it is wrong and is denied that the Respondents are liable to pay Rs. 20,00,000/- or any amount whatsoever to the complainant. It is also wrong and is denied that there has been any deficiency of service on the part of any of the Respondents. The claimant is not entitled to any amount whatsoever nor any interest as alleged or at all. It is also wrong and is denied that the claimant is entitled to any costs as alleged. In fact, it is the respondents who should be awarded costs against the Complainant for filing false and frivolous complaint against the respondents.

From the allegations made in the complaint, it is crystal clear that the claimant wishes to resile from the agreements entered into between the parties for reasons best known to her. One such reason could be that in the recent past property prices have seen downward trend, as such, the claimant wishes to back out from the contract in a dishonest manner. Had the prices gone up, she would never have submitted any complaint or asked for refund or cancellation of the arrangements. The Very fact the complainant is seeking the cancellation of the agreement and refund of the amount paid, no allegations of deficiency of service survives on the face of it and on this ground alone the complaint is liable to be dismissed summarily.


After considering the arguments of the counsels representing both the parties the Commission decided that the Complainant is required to be compensated for delay in construction of the flat and for not allotting the same to the her. Because of the delay in construction and delay in deciding the matter, it is practically impossible for a retired Govt. employee to purchase a flat at the present price. Therefore, there are two alternatives – (a) one is to give adequate compensation for delay and to direct the Opposite Parties to hand-over possession of an alternative flat in the vicinity of the area where the flat was allotted to the Complainant; (b) or secondly, to pay adequate compensation to enable the Complainant to purchase a new flat of the same area in the same or similar locality.

In this view of the matter, this Appeal is allowed. The Opposite Parties are directed to pay a sum of Rs.7,50,000/- as compensation to the Complainant. This is on the presumption that the value of the flat has escalated.

However, if the builder considers that compensation of Rs.7,50,000/- (Rupees seven lakhs and fifty thousand) is more or excessive, it would be open to the builder to provide an alternative flat of the size and price agreed, in the same locality or near about, to the complainant for which an appropriate allotment letter will be issued by them in favour of the Complainant within a period of eight weeks from the date of the order. If the same is not issued, it shall pay compensation of Rs.7,50,000/- to the complainant, as directed.

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