The Delhi State Consumer Disputes Redressal Commission upheld the complainant’s status as a consumer under the Consumer Protection Act, 1986 and directed the builder to refund the amount paid for a flat along with interest and compensation for mental agony, holding that unilateral change of allotment and failure to possess the apartment within a reasonable period constitute deficiency in service.
Background & Facts
The Dispute
The complainant, Mr. Sunil Kumar Malkani, booked a residential apartment in the project "Omaxe North Avenue -II, Bahadurgarh" and paid a total consideration of Rs.5,52,838/-. The opposite party, M/s Omaxe Ltd., allotted an apartment but later changed the allotment without the complainant’s consent and failed to hand over possession within a reasonable time, leading to the present complaint alleging deficiency of service.
Key Facts
- The complainant submitted an application dated 12.11.2007 and paid a booking amount of Rs.2,71,250/- via cheque No. 022982 dated 12.11.2007.
- Thereafter, he paid another sum of Rs.2,96,670/- to the opposite party towards the booking.
- On 01.10.2008, the opposite party allotted Apartment No. 1003 on the 10th floor of Express Tower to the complainant.
- The opposite party assured possession of the apartment by the end of 2009.
- Without obtaining the complainant’s consent or approval, the opposite party changed the allotment vide letter dated 02.08.2010 to Apartment No. 404 on the 4th floor of Tulip Tower, approximately two years after the first allotment.
- The opposite party issued a payment schedule letter dated 15.10.2010 showing an outstanding amount of Rs.2,76,418.75/- payable at commencement of construction.
- The complainant visited the site and found that no construction had commenced till September 2012.
- The opposite party issued reminders and letters demanding payment on 18.04.2012, 03.05.2012, 23.05.2012, 01.06.2012, 19.06.2012, 07.07.2012 and 20.07.2012, with final notices on 07.07.2012 and 20.07.2012 threatening cancellation and forfeiture.
- Despite the reminders, the complainant did not make the payments.
- The opposite party cancelled the allotment vide letter dated 21.08.2012 and forfeited the amount paid by the complainant under Clauses 5 and 6 of the Basic Terms and Conditions.
- The original complaint was filed before the District Commission and returned by its order dated 11.01.2019 on the ground of lack of pecuniary jurisdiction.
- The complainant instituted the present complaint before the Delhi State Commission on 19.02.2019.
Procedural History
- 12.11.2007: Application for booking and payment of Rs.2,71,250/- (cheque No. 022982).
- Thereafter: Payment of Rs.2,96,670/- towards booking.
- 01.10.2008: Allotment of Apartment No. 1003, Express Tower.
- 02.08.2010: Letter changing allotment to Apartment No. 404, Tulip Tower.
- 15.10.2010: Payment schedule letter showing outstanding dues.
- September 2012: Site visit confirming no construction had commenced.
- 18.04.2012 to 20.07.2012: Series of reminder letters and final notices demanding payment.
- 21.08.2012: Cancellation of allotment and forfeiture of amount paid.
- 11.01.2019: District Commission order returning the complaint for lack of pecuniary jurisdiction.
- 19.02.2019: Date of institution of the present complaint before the Delhi State Commission.
- 15.09.2026: Date of hearing and decision.
Relief Sought
The complainant prayed for: (a) Direction to the opposite party to accept the balance consideration for flat No. 404 in Tulip Tower in 20 equal interest-free quarterly instalments/construction-linked payment; (b) Alternatively, refund of Rs.5,52,838/- paid by the complainant with interest @24% per annum from the date of booking; (c) Compensation for harassment, mental agony and sufferings to the tune of Rs.4.00 Lakhs; (d) Payment of costs of the present complaint; (e) Any other further orders/deemed fit.
The Legal Issue
The central questions were: (1) Whether the complainant qualifies as a "consumer" under Section 2(1)(d) of the Consumer Protection Act, 1986 despite purchasing the flat for investment purposes; (2) Whether the complaint is maintainable within the limitation period prescribed by Section 24A of the Act; and (3) Whether the opposite party’s conduct - changing the allotment without consent and failing to possess the apartment within a reasonable period - amounts to deficiency in service under Section 2(1)(g) of the Act.
Arguments Presented
For the Petitioner
The complainant contended that he purchased the apartment for residential use and not for commercial profit, relying on precedents such as Aashish Oberai Vs Emaar MGF Land Limited and Narinder Kumar Bairwal vs. Ramprastha Promoters to assert consumer status. He argued that the cause of action arose on the date of cancellation of allotment (21.08.2012) and that the complaint filed in 2013 was well within the two-year limitation under Section 24A. He further submitted that the opposite party’s unilateral change of allotment and failure to commence construction constituted deficiency in service, entitling him to refund of the amount paid with interest and compensation for mental agony.
For the Respondent
The opposite party argued that the complainant was not a "consumer" as he had purchased the flat for investment/commercial purpose, citing his British nationality and intent to earn profit. It contended that no cause of action existed because the complainant had failed to adhere to the payment schedule, and that the complaint involved complicated questions of fact and law requiring civil court adjudication. The opposite party also maintained that mere allegation of commercial purpose could not be rejected without documentary evidence, and that the delay in filing the complaint was not sufficiently explained.
The Court's Analysis
The Commission first examined the definition of "consumer" under Section 2(1)(d) and held that ownership of more than one property does not ipso facto render the purchase commercial, citing Aashish Oberai Vs Emaar MGF Land Limited and Narinder Kumar Bairwal vs. Ramprastha Promoters. It concluded that the opposite party bore the onus to prove commercial purpose, which it failed to discharge. On limitation, the Commission noted that the cause of action arose on 21.08.2012 (cancellation of allotment) and that the complaint filed on 19.02.2019 was within two years, thus maintainable. Regarding deficiency, the Commission relied on Sections 2(1)(g) and 2(1)(o) to state that any fault in performing contractual obligations amounts to deficiency. It found that changing the allotment without consent and failing to commence construction within a reasonable period (despite assurances) constituted such fault. The Commission further referred to Narne Construction P. Ltd. vs. Union of India to affirm that housing construction is a "service" under the Act. Consequently, it held the opposite party liable for refund with interest and compensation.
The Verdict
The complainant succeeded. The Commission directed the opposite party to refund the entire amount paid by the complainant, namely Rs.5,52,838/-, along with interest @6% per annum calculated from the date each installment/payment was received by the opposite party till 15.09.2026 (date of judgment), provided the opposite party pays the entire amount on or before 15.11.2026. In the event of failure to pay by 15.11.2026, the entire amount shall be refunded along with interest @9% per annum calculated from the date each installment/payment was received till actual realization. Additionally, the opposite party was ordered to pay Rs.1,00,000/- as cost for mental agony and harassment and Rs.50,000/- towards litigation costs. The complaint was allowed and all pending applications stood disposed of.
What This Means For Similar Cases
Consumer Status Not Defeated by Investment Intent
Practitioners must note that a purchaser’s ownership of multiple properties or intent to earn profit does not automatically exclude them from the definition of "consumer" under Section 2(1)(d). The burden lies on the opposite party to prove commercial purpose through documentary evidence; a bare assertion is insufficient.
Limitation Period and Sufficient Cause
The complaint is maintainable if filed within two years from the date of cause of action. Here, the cause of action was the cancellation of allotment on 21.08.2012, and the filing on 19.02.2019 was within the period. Practitioners should identify the precise date of cause of action (e.g., cancellation, denial of possession) and ensure timely filing; delay may be condoned only upon showing sufficient cause.
Deficiency in Service Encompasses Unilateral Changes and Delay
Any unilateral alteration of contractual terms (such as allotment change) without the consumer’s consent, coupled with failure to perform core obligations (like handing over possession within a reasonable time), constitutes deficiency in service under Sections 2(1)(g) and 2(1)(o). Builders must adhere to agreed timelines and obtain consent for any deviations; otherwise, they face refund liability with interest and compensation.
