Delhi Consumer Court Orders Housing Society to Refund Rs 79 Lakh to Homebuyers for 15-Year Possession Delay

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NEW DELHI: The Delhi consumer court has held Ghaziabad based housing society for delaying the possession of the flat for over 15 years and directed them to refund over Rs 79 lakh to two homebuyers along with an compensation of Rs 5 lakh.

The complainants became the members of the housing society in 2010 and applied for 3BHK flats in a residential project planned in Noida. The society had promised to hand over the possession of the flat by 2012, as per a report by Bar and Bench. After a land dispute, the society shifted the project to Ghaziabad and increased the cost of the flats from around Rs 24 lakh to about Rs 28.7 lakh for a 1599 sq ft 3BHK unit.

The homebuyers said they kept paying lakhs of rupees, partly through home loans, as the society repeatedly asked for more money over the years. In the end, they paid Rs 39,08,865 and Rs 40,34,234 respectively, which was much more than the price they had originally agreed to. The society sent them allotment letters in June 2019, nearly six years after the agreement, but they never actually handed over the flats to the buyers.

What did the consumer commission rule

A bench comprising Justice Sangita Dhingra Sehgal (President) and Bimla Kumari (Member) said the housing society was guilty of deficiency in service. The society had argued that, as a cooperative society, it couldn't be treated as a service provider and the case shouldn't apply to it. But the commission said the law clearly counts a cooperative society as a "person" that can provide services — so since the buyers paid money for their flats, they count as consumers, and the society can be held responsible.

The society further argued that the case shouldn't be heard because the project was registered under RERA. The commission rejected this too, citing a Supreme Court ruling that said "there is nothing in the RERA Act which bars" consumer cases, and that buyers can choose to go to either the consumer court or RERA.

On the delay, the commission said that if possession isn't given within 42 to 48 months, it counts as deficiency in service. It rejected the society's excuses of land disputes, rising costs, environmental rules and COVID-19, saying the society failed to file any documentary evidence to explain the delay, and that the project was already delayed even before the pandemic started.

The commission concluded that the society "kept the amounts deposited by the complainants for almost sixteen years" without handing over the flats.

As a relief, the society was ordered to refund Rs 39,08,865 to the first complainant and Rs 40,34,234 to the second, with 8.25 per cent annual interest from the date of each payment till June 8, 2026, the date of the order. If the society doesn't pay the full amount by August 8, 2026, the interest rate goes up to 11.25 per cent until the money is actually paid. The commission also ordered Rs 2 lakh each for mental agony and Rs 50,000 each for legal costs, bringing the total compensation to Rs 5 lakh.