Delhi State Consumer Commission Grants Relief To Homebuyer; Enhances Refund Interest To 12% Against Ahluwalia Contracts Ltd

The Delhi State Consumer Commission, led by Ms. Bimla Kumari, allowed complaintant's appeal against Ahluwalia Contracts Ltd., holding the builder liable for deficiency in service for not delivering the flat on time. The Commission increased the refund interest from 6% to 12% per annum as per the Builder Buyer Agreement and directed the builder to pay ₹3,24,000 with 12% interest from the date of complaint till realization. Brief Facts of the Case: The complainant, Vijay Kumar, had booked a residential flat bearing No. 410 (4th Floor, 1305 sq. ft.) in the project “Ahlcon Apartment” being developed by Ahluwalia Contracts (India) Ltd. (the Opposite Party). The total sale consideration of the flat was ₹6,26,400, out of which the complainant paid ₹3,24,000 between 1989 and 1992. Despite receiving the payments, the Opposite Party failed to complete construction and did not hand over possession within the stipulated period. The builder, instead of delivering the flat, demanded additional charges, escalation costs, and interest at 24% through a letter dated 14.04.2000, while it was itself responsible for the delay. Later, without giving physical possession, the builder issued a maintenance bill and even threatened to cancel the allotment. Subsequently, in March 2006, the Opposite Party sold the same flat to a third person, Arvind Panwar, through a registered sale deed. Aggrieved by this, the complainant filed a consumer complaint before the District Consumer Disputes Redressal Forum, alleging deficiency in service and seeking refund of the amount paid along with interest and compensation for the delay. The District Consumer Disputes Redressal Forum had partly allowed the complaint filed by Vijay Kumar, directing Ahluwalia Contracts Ltd. to refund ₹3,24,000 to the complainant, along with simple interest at the rate of 6% per annum from the date of filing the complaint until the realization of the amount, finding deficiency in service for the builder's failure to deliver possession within the stipulated period. Dissatisfied with the District Forum's decision to award only 6% interest and not the higher 12% interest stipulated in the Builder Buyer Agreement, Vijay Kumar filed an appeal before the Delhi State Consumer Commission. Contentions of the Parties: The complainant contended that he had booked a flat in the Opposite Party's project “Ahlcon Apartment” for ₹6,26,400 and had paid ₹3,24,000 between 1989 and 1992. Despite repeated assurances, the Opposite Party failed to complete construction or deliver possession within the stipulated time and later raised arbitrary demands, including escalation charges and 24% interest, without handing over the flat. He argued that the builder's conduct amounted to clear deficiency in service and unfair trade practice, and sought refund of his deposited amount with 12% interest as per the Builder Buyer Agreement. The Opposite Party, on the other hand, claimed that the complainant himself was a defaulter who failed to make timely payments as per the schedule. It asserted that several opportunities were given to him to take possession, the last one being through a letter dated 01.06.2005, but he showed no interest. It further submitted that the flat was sold to another buyer, Arvind Panwar, in 2006, and hence the complainant was not entitled to allotment. The company denied any deficiency in service and maintained that it was only liable to refund the principal amount without higher interest. Observation and Decision of the Commission: The Commission observed that the District Forum had rightly held there was deficiency in service on the part of the Opposite Party for failing to complete construction and deliver possession of the flat within the stipulated period. However, it noted that the District Forum had awarded only 6% interest on the refund amount, which was contrary to the Builder Buyer Agreement that clearly provided for refund with 12% simple interest if the builder failed to hand over the unit. The Commission held that the complainant's right to refund with 12% interest had accrued under the contract terms and that the lower Forum erred in reducing the rate. Accordingly, the Commission modified the District Forum's order and directed the Opposite Party to refund ₹3,24,000 to the complainant with simple interest at 12% per annum from the date of filing of the complaint till realization. It also noted that the respondent had already paid ₹4,58,190 (principal plus 6% interest) and directed payment of the remaining balance towards the enhanced interest. The appeal was thus allowed, with parties bearing their own costs. Case Title: VIJAY KUMAR VS. AHULUWALIA CONTRACTS LTD. Case No.: FA-448/2016 Click Here To Read/Download The Order

Delhi State Consumer Commission Grants Relief To Homebuyer; Enhances Refund Interest To 12% Against Ahluwalia Contracts Ltd

Praveen Mishra

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