Delhi State Consumer Commission Directs Cooperative Society To Refund Homebuyers For 15-Year Delay In Flat Possession

The Delhi State Consumer Disputes Redressal Commission, comprising Justice Sangita Dhingra Sehgal (President) and Ms. Bimla Kumari (Member), has held Sanchar Nest Sahkari Awas Samiti Ltd. guilty of deficiency in service for failing to hand over possession of residential flats to two homebuyers even after nearly 15 years. Observing that non-delivery of possession constitutes a "continuous wrong" giving rise to a recurring cause of action, the Commission directed the cooperative housing society to refund the amount deposited by the complainants with interest, besides awarding compensation for mental agony and litigation costs. Facts The complainants became members of Sanchar Nest Sahkari Awas Samiti Ltd. in 2010 after the society launched a residential housing project near Sector 62, Noida. They paid membership fees and applied for 3BHK flats based on the society's assurance that possession would be delivered by 2012. Subsequently, due to disputes relating to the original project land, the society shifted the complainants to another project, Palm Wood Enclave at Wave City, Ghaziabad, assuring them that the amounts already deposited would be adjusted. Fresh agreements were executed in 2013, following which the complainants availed home loans and continued making payments. The complainants alleged that, the society repeatedly delayed construction, revised the project cost and imposed several additional charges, including parking charges, GST, service tax and other miscellaneous charges. Although allotment letters were issued in June 2019, the flats were never handed over. The complainants submitted that over a period of nearly 14 years they had paid ₹39,08,865 and ₹40,34,234, respectively, yet the project remained incomplete. Even after cancelling one complainant's membership in November 2023, the society neither refunded the deposited amount nor paid interest, compelling them to approach the Consumer Commission. Contentions of the Opposite Party The opposite party objected to the maintainability of the complaint, contending that the complainants were members of a cooperative housing society and not "consumers" under the Consumer Protection Act. It further argued that disputes involving cooperative societies were governed by the Uttar Pradesh Cooperative Societies Act and that the complaint was barred by limitation. The society also contended that the complainants themselves had sought cancellation of their allotments, that no interest was payable under the membership agreement, that the complaint amounted to forum shopping after dismissal of proceedings before the RERA Authority, and that the delay was attributable to land disputes, the COVID-19 pandemic and environmental restrictions. Observations & Decision The Commission rejected the preliminary objections and held that a cooperative housing society engaged in construction of residential flats for consideration provides a "service" under the Consumer Protection Act, 2019, and that the complainants are "consumers" within the meaning of the Act. It further held that failure to deliver possession constitutes a continuous wrong, giving rise to a recurring cause of action, and therefore the complaint was not barred by limitation. Rejecting the society's objection based on the complainants' earlier proceedings before the RERA Authority, the Commission relied on M/s Imperia Structures Ltd. v. Anil Patni to reiterate that remedies under the Consumer Protection Act are in addition to those available under the Real Estate (Regulation and Development) Act, 2016. On merits, the Commission observed that despite receiving substantial payments from the complainants, the society failed to hand over possession of the flats even after nearly 15 years.It noted that fresh agreements had been executed in 2013, yet the project remained incomplete. The Commission found the society's reliance on the COVID-19 pandemic and environmental restrictions to justify the delay devoid of merit, observing that the project had already been delayed for several years before the pandemic and that no documentary evidence had been produced to explain the prolonged delay. Holding that the society had failed to fulfil its contractual obligations within a reasonable time, the Commission concluded that it was guilty of deficiency in service. Allowing the complaint, the Commission directed the society to refund ₹39,08,865 to the first complainant and ₹40,34,234 to the second complainant, together with interest at their respective home loan rates, subject to a maximum of 8.80% per annum, from the dates the respective installments/payments were received by the opposite party till realization. The Commission also awarded ₹2,00,000 to each complainant towards mental agony and harassment and ₹50,000 to each towards litigation costs. Case Title: Manjit Singh & Anr. v. Sanchar Nest Sahkari Awas Samiti Ltd. Case No.: Consumer Complaint No. CC/162/2024 Click here to read/download the order

Delhi State Consumer Commission Directs Cooperative Society To Refund Homebuyers For 15-Year Delay In Flat Possession

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Delhi State Consumer Commission Directs Cooperative Society To Refund Homebuyers For 15-Year Delay In Flat Possession

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