Delhi State Consumer Commission Orders Parsvnath Developers To Refund ₹4 Lakh For Failure To Deliver Flat

The Delhi State Consumer Disputes Redressal Commission, presided over by Justice Sangita Dhingra Sehgal (President) and Member Bimla Kumari, has directed Parsvnath Developers Ltd. to refund ₹4,00,000 with interest to flat buyers for failing to commence construction and deliver possession of the allotted flat in Parsvnath Palacia, Greater Noida, terming the conduct as deficiency in service and unfair trade practice Brief facts of the Case: The complainants, Ms. Madhu and Mr. Sanjay Kumar, had booked a flat with M/s Parsvnath Developers Ltd. in its housing project “Parsvnath Palacia” at Greater Noida, Uttar Pradesh. They paid ₹4,00,000 as an advance in 2006, and the builder subsequently allotted them Flat No. B1-705 on 22 June 2007, promising possession by 2010. However, construction never commenced, and through a letter dated 11 September 2010, the builder extended the possession timeline to June 2012. Despite repeated visits to the builder's office, the complainants received no satisfactory response. A legal notice seeking refund was sent on 22 December 2014, but the builder neither replied nor returned the money. The case was initially filed before the District Consumer Commission but was returned due to pecuniary jurisdiction limits, and later re-filed before the Delhi State Consumer Disputes Redressal Commission under Section 17 of the Consumer Protection Act, 1986, seeking refund of ₹4,00,000 with interest and ₹5,00,000 as compensation for mental agony and inconvenience caused by the builder's failure to deliver the flat. Contentions of the Complainant: The complainants submitted that they had paid ₹4,00,000 in 2006 for booking a flat, with an assurance that possession would be handed over by 2010. However, the builder neither commenced construction nor delivered the flat, despite repeated visits and reminders. Even after sending a legal notice in December 2014 seeking refund, there was no response from the builder. Alleging deficiency in service and unfair trade practice, the complainants sought a refund of ₹4,00,000 with interest, along with ₹5,00,000 as compensation for mental agony and hardship. Contentions of the Opposite Parties: The opposite parties contended that the complainants did not fall within the definition of “consumers” under the Consumer Protection Act, 1986, as the booking was allegedly made for commercial investment. They argued that the dispute involved complicated questions of fact and law, which were more appropriately triable by a civil court rather than a consumer forum. The builder further attributed the delay in construction to the global recession and asserted that its liability was limited as per the terms of the agreement. It was also argued that the complaint was barred by limitation and therefore liable to be dismissed. Observation and Decision of the Commission The Commission observed that the complainants had paid ₹4,00,000 to the opposite parties towards booking a flat, but the builder failed to commence construction or hand over possession despite repeated assurances. It held that the complainants qualified as “consumers” under Section 2(1)(d) of the Consumer Protection Act, 1986, as there was no evidence to suggest that the flat was booked for any commercial purpose. It further ruled that the failure to deliver possession amounted to a continuous wrong, giving the complainants a recurring cause of action, and thus the complaint was not barred by limitation. Rejecting the builder's plea that the dispute involved complex questions fit for a civil court, the Commission clarified that consumer fora are competent to adjudicate such matters. Finding that the builder had neither commenced construction nor executed any Flat Buyer Agreement, the Commission held that the opposite parties were guilty of deficiency in service and unfair trade practice. The argument that the delay occurred due to the global recession was dismissed as untenable, as there was no evidence of any legal, natural, or external event preventing construction. Accordingly, the Commission allowed the complaint and directed the opposite parties to: 1. Refund ₹4,00,000 to the complainants with interest @ 6% per annum from the date of each payment till 15.10.2025. 2. If the refund was not made by 15.12.2025, the interest rate would increase to 9% per annum till actual realization. 3. Pay ₹1,00,000 as compensation for mental agony and harassment. 4. Pay ₹50,000 as litigation costs. Case Title: MS. MADHU & ANR. VS. PARSVNATH DEVELOPERS LTD Case No.: CC. NO./608/2019 Click Here To Read/Download The Order

Delhi State Consumer Commission Orders Parsvnath Developers To Refund ₹4 Lakh For Failure To Deliver Flat

Praveen Mishra

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