Delhi State Commission Holds Air Force Naval Housing Board Liable For Delay In Delivery Of Flat To Indian Air Force Officer

The Delhi State Consumer Disputes Redressal Commission bench comprising Pinki, Judicial Member and Bimla Kumari, Member has held Air Force Naval Housing Board liable for deficiency in service for delay in handing over possession of housing flat to an Indian Air Force officer and sitting over his hard-earned money for an indefinite period. Brief facts: The complainant was a commissioned officer of the Indian Air Force and was posted at Air Force Station in Gwalior, Madhya Pradesh. The Air Force Naval Housing Board ('Housing board') came with a project for construction of flats for its officers. Accordingly, the complainant applied for an allotment of flat by paying Rs. 1,01,000/- as registration charges. An allotment letter was then issued to the complainant with a basic sale price of Rs.21,75,000/-. A contract was entered into between the Housing Board and Omaxe Infra and Constructions Ltd. ('Builder'). As per the complainant, the housing board in connivance with the builder, increased the cost of the flat from Rs. 21,75,000/- to Rs. 29,54,982/-. The complainant took a loan from various financial institutions to pay the above amount in installments but no possession was offered to him. Despite several calls made by the complainant to the Housing board, the issue was not resolved. Hence, he filed a complaint with the Delhi State Commission, demanding appropriate compensation. Submissions of the complainant: The complainant submitted that since he was a newly commissioned officer with inadequate funds, he had to take loans from different financial institutions and pay an interest @10%. It was further submitted by him that till 18.07.2014, he had paid a sum of Rs.25,85,079/- with no hope for delivery of possession. It was his contention that more than three years have passed from the promised date of possession and no possession has been delivered to him which amounts to unfair trade practice and deficiency in service. Submissions of the Housing Board: It was submitted that the Housing board does not have any funds of its own and collects all monies from the allottees. It was further submitted that as per the allotment letter, at the time of applying for the scheme, the total cost of the project was only tentative in nature. It was the specific contention of the housing board that since the area of the flat was increased from 1300 sq feet to 1450 sq feet, the cost was also increased from Rs. 21,75,000/- to Rs. 29,54,982/-. It was further argued that the complainant, instead of filing a complaint, should have referred the dispute to an arbitration in view of an arbitration clause being mentioned in the allotment letter. The board also placed on record a copy of the offer of possession letter dated 01.09.2020 without completion certificate. Observations of the commission: At the outset, the commission deleted the Builder- Omaxe Infra and Constructions Ltd. from the list of parties as it was not a necessary party. Hence, no order was passed against it. On the issue of existence of an arbitration clause, the bench placed reliance on the decision of the Supreme Court in Emaar MGF Land Ltd. vs Aftab Singh I (2019) CPJ 5 (SC) and observed that since the complainant has opted for a special remedy provided by law under the Consumer Protection Act, 1986, the commission can refuse to direct the complainant to go for arbitration. Thus, it was held that despite the existence of an arbitration agreement, the Commission is authorised to decide the complaint. Next, the bench examined the offer of possession letter dated 01.09.2020 and observed that there was no completion certificate at that time which shows the inordinate delay on the part of the Housing board in completion of the project. It also placed reliance on the decision of the Supreme Court in M/s Treaty Construction Vs. M/s Ruby Tower Housing Society AIR 2019 SC 3676 to hold that offer of possession without completion certificate is not legal and valid. It was further observed that since three years have passed from the promised date of delivery of possession, the complainant who is bearing the burden of loan amounts cannot be made to wait indefinitely for possession. Reliance was also placed on the decision of the Supreme Court in Fortune Infrastructure Vs. Trevor D‟Lima (2018) 5 SCC 442 to support the above findings. Thus, Air Force Naval Housing Board was held liable for deficiency in service since it neither handed over the possession of the booked unit nor refunded the amount of the complainant air force officer despite service of legal notice. The bench also held that the Housing board has no right to sit over the hard-earned money of the complainant which he spent for purchase of the unit. Hence, the complaint was allowed with the following reliefs: Refund of an amount of Rs.25,85,079/- to be paid by the Housing Board. Amount of...

Delhi State Commission Holds Air Force Naval Housing Board Liable For Delay In Delivery Of Flat To Indian Air Force Officer

Aakanksha Bajoria

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