Fit-Out Possession Without Completion Certificate Illegal; Chandigarh State Consumer Commission Holds Omaxe Liable For Delay

The State Consumer Disputes Redressal Commission, U.T. Chandigarh, comprising Justice Raj Shekhar Attri (President) and Preetinder Singh (Member), has held Omaxe Chandigarh Extension Developers Pvt. Ltd. (now Omaxe New Chandigarh Developers Pvt. Ltd.) guilty of deficiency in service and unfair trade practice for failing to deliver lawful possession of a flat within the stipulated time and for issuing a mere “fit-out possession” letter without obtaining the mandatory Completion Certificate. The Commission directed the developer to hand over complete physical possession with all amenities, refund Pre-EMIs paid by the complainants, and pay interest and compensation.

Brief Facts:

The complainants, Pankaj Mahindra and Manisha Mahindra, booked a residential flat in 2015 in the project “The Lake” at Omaxe New Chandigarh. A booking amount of ₹5 lakh was paid and Unit No. TLC/VICTORIA-C/1901 was allotted, with possession promised by 18.03.2019. A housing loan of ₹68.88 lakh was arranged through Axis Bank under a subvention scheme, under which the developer undertook to pay EMIs till delivery of possession. The complainants paid a total of ₹68,46,999.

Despite the committed date having expired, construction remained incomplete. The developer stopped paying Pre-EMIs in November 2020. On 11.03.2024, Omaxe issued only a “fit-out possession” letter without obtaining the mandatory Completion Certificate. Although a Settlement Deed dated 14.06.2024 settled disputes up to that date, lawful possession was still not offered thereafter, as the Completion Certificate had not been obtained.

Alleging continued delay, illegal demands, and non-payment of Pre-EMIs, the complainants filed the consumer complaint in 2025 seeking possession, refund, and compensation.

Contentions of the Opposite Parties:

Omaxe argued that the complainants were not consumers but investors and that delays occurred due to the complainants' defaults. It relied on the Settlement Deed dated 14.06.2024, claiming that all disputes stood settled. The developer further stated that it had paid EMIs under the subvention scheme till the offer of possession and that after obtaining the Occupation Certificate on 11.10.2024, the complainants were called upon to execute the sale deed but failed to do so. It therefore denied any deficiency in service.

Observations and Decision of the Commission:

The Commission held that the complainants are consumers, as Omaxe failed to prove that the flat was purchased for investment purposes. It observed that although the Settlement Deed dated 14.06.2024 settled past disputes, it did not absolve Omaxe of its obligations thereafter.

The Commission found that the developer had issued only a “fit-out possession” letter and had not obtained the mandatory Completion Certificate, rendering the offer of possession illegal and invalid in law. It further held that Omaxe was bound to continue paying Pre-EMIs under the subvention scheme until lawful possession supported by a Completion Certificate was delivered, and that discontinuation of such payments amounted to deficiency in service.

Holding Omaxe guilty of deficiency in service and unfair trade practice, the Commission directed it to hand over complete physical possession of the flat with all promised amenities and a valid Completion Certificate within three months. It further directed refund of Pre-EMIs paid by the complainants and payment of delay compensation by way of interest at 9% per annum on the amounts paid (as specified in the order), along with ₹75,000 as compensation for mental agony and ₹35,000 towards litigation costs. The complaint against Axis Bank and HDFC Bank was dismissed.

Case Title: Pankaj Mahindra & Anr. v. Omaxe Chandigarh Extension Developers Pvt. Ltd. (now Omaxe New Chandigarh Developers Pvt. Ltd.)

Case No.: Consumer Complaint No. SC/4/CC/73/2025

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