NCDRC Holds Builder Liable For Delayed Possession, Grants Refund Or Possession To Homebuyers

The National Consumer Disputes Redressal Commission (NCDRC), comprising Air Vice Marshal Jonnalagadda Rajendra (Retd.) (Presiding Member) and Dr. Sadhna Shanker (Member), partly allowed a consumer complaint filed by Frontier Heights Residents Welfare Association on behalf of 53 homebuyers. Holding Frontier Shelters Pvt. Ltd. and others liable for deficiency in service for delaying possession of flats, the Commission directed refund with interest to buyers seeking exit and completion of the project with delay compensation for those opting to take possession. Brief Facts The complainant, Frontier Heights Residents Welfare Association, filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC) on behalf of 53 homebuyers against Frontier Shelters Pvt. Ltd., its Managing Director, and the landowner. The homebuyers alleged that despite booking flats in the Frontier Heights residential project in Bengaluru and paying substantial consideration, the developer failed to complete construction, obtain the Occupancy Certificate (OC), and hand over possession by the promised date of September 30, 2019. Although the developer repeatedly extended the possession timelines through emails, the project remained incomplete and possession was not delivered, prompting the homebuyers to approach the Commission alleging deficiency in service. The complainants sought completion of the project, delivery of possession, delay compensation, and other consequential reliefs. During the proceedings, the developer opposed the complaint, citing the COVID-19 pandemic, delay in extension of the project's RERA registration, family disputes, injunction orders, criminal proceedings, freezing of bank accounts, and multiple litigations as reasons for the delay. The NCDRC examined the rival contentions and proceeded to determine whether the delay amounted to deficiency in service and the reliefs to which the homebuyers were entitled. Opposite Parties' Contentions: The Opposite Parties challenged the maintainability of the complaint, contending that the Residents Welfare Association lacked locus standi to represent the homebuyers and that disputes arising from individual agreements could not be adjudicated collectively. On merits, they submitted that the delay was caused by force majeure circumstances, including the COVID-19 pandemic, delay in extension of the project's RERA registration, family disputes resulting in injunction orders, criminal proceedings, freezing of bank accounts, multiple litigations, and alleged payment defaults by certain homebuyers. They also relied on the arbitration clause in the agreements and alternatively expressed willingness to refund the amounts paid along with reasonable interest without admitting any deficiency in service. Observations and Decision The Commission held that the complaint filed by the Frontier Heights Residents Welfare Association on behalf of the homebuyers was maintainable and rejected the developer's objections regarding locus standi, arbitration, and force majeure. The Commission observed that the developer had admittedly failed to complete the project, obtain the Occupancy Certificate (OC), and hand over possession by the promised date of September 30, 2019. The Commission further held that repeated extensions of possession timelines, coupled with reliance on the COVID-19 pandemic, RERA-related delays, family disputes, litigation, and freezing of bank accounts, could not justify the prolonged delay, particularly when the default had commenced before the pandemic. The Commission concluded that the builder was guilty of deficiency in service. Accordingly, the Commission partly allowed the complaint and directed the Opposite Parties to refund the deposited amount with 9% interest to homebuyers opting for a refund. For those seeking possession, it directed the developer to complete the project, obtain the Occupancy Certificate, and hand over possession within 180 days, besides paying delay compensation at 6% per annum from the committed possession date until delivery. The Commission also restrained the developer from creating any third-party interest in the allotted units and awarded ₹10,000 as litigation costs to each complainant. Case Title: Frontier Heights Residents Welfare Association v. Frontier Shelters Pvt. Ltd. & Ors. Case No.: Consumer Complaint No. 57 of 2023 Click Here To Read/Download Order

NCDRC Holds Builder Liable For Delayed Possession, Grants Refund Or Possession To Homebuyers

Praveen Mishra

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Praveen Mishra

NCDRC Holds Builder Liable For Delayed Possession, Grants Refund Or Possession To Homebuyers

Praveen Mishra

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INR 1099+GST

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Praveen Mishra

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