Delhi State Consumer Commission Holds Ansal Housing Liable

July 22, 2024

The Delhi State Consumer Disputes Redressal Commission, with Justice Sangita Dhingra Sehgal presiding as President and Mr. J.P. Agrawal as Member, found ‘Ansal Housing Ltd.’ responsible for service deficiency due to their failure to deliver a flat within the agreed contractual timeframe. The commission determined that reasons such as ‘demonetization’ and court orders prohibiting groundwater extraction were inadequate justifications for the delay.

Overview

The complainants sought allocation of a residential unit in the ‘Estella’ project, being developed by Ansal Housing (‘Builder’) in Gurgaon, Haryana. After 1.4 years, the builder allocated a unit to the complainants. Later, an ‘Apartment Buyer Agreement’ (‘Agreement’) was signed between both parties. As per Clause 30 of the Agreement, the builder was obligated to deliver possession of the unit within 36 months from the agreement’s execution or the date of obtaining the license.

Nevertheless, the Builder failed to hand over possession of the unit and was unable to commit to future delivery. Moreover, the clauses outlined in the Agreement were deemed unilateral, arbitrary, and heavily skewed in favor of the Builder. Despite having already paid a substantial amount of Rs. 29 lakh prior to signing the agreement, the Complainants felt compelled to proceed with it. They had opted for a construction-linked payment plan but continued to receive demand letters from the Builder without clarity on the actual progress of construction. Despite numerous inquiries about the construction status and expected delivery date of the unit, the Builder did not provide a satisfactory response.

Over the course of time, the Complainants disbursed a total amount of Rs. 96,46,580/- to the Builder as per their demands. Despite this, the Builder did not fulfill their obligation to deliver possession of the unit or offer any resolution even after receiving a legal notice from the Complainants. Frustrated by these developments, the Complainants filed a consumer complaint with the State Consumer Disputes Redressal Commission, Delhi (‘State Commission’).

Arguments presented by the Builder

The Builder argued that the Complainants do not qualify as consumers under the Consumer Protection Act, 2019, as they invested with the intention of earning a profit, which constitutes a commercial purpose. Additionally, since the Complainants reside in the USA, the Builder asserted that their intention was not genuine residence in Gurugram. The Builder also cited ‘force majeure’ circumstances beyond its control, such as demonetization, a ban on groundwater extraction by the Punjab & Haryana High Court, and a directive from the National Green Tribunal to halt construction in Delhi NCR to curb emissions, as reasons for the delay in handing over possession.

Findings of the Commission

Regarding the existence of a cause of action, the State Commission referred to the precedent set in Mehnga Singh Khera and Ors. Vs. Unitech Ltd. [I (2020) CPJ 93 (NC)], affirming that the failure to deliver possession constitutes a continuous wrong and a recurrent cause of action. According to Section 69 of the Consumer Protection Act, 2019, a complaint must be filed within two years from the date the cause of action arises, unless sufficient reasons for delay are provided. Since the Builder neither delivered possession of the unit with the agreed facilities nor refunded the amount, the State Commission determined that the Complainants had a recurrent cause of action.

The Commission also addressed the Builder’s contention that the Complainants were not consumers because they had invested for a commercial purpose. Citing Aashish Oberai Vs. Emaar MGF Land Limited [I (2017) CPJ 17 (NC)], the Commission held that ownership of multiple houses or plots does not inherently imply a commercial purpose, as such properties can also be acquired for personal use. Furthermore, referencing Narinder Kumar Bairwal and Ors. vs. Ramprastha Promoters and Developers Pvt. Ltd. and Ors. [CC-1122/2018], the Commission stressed that the burden of proof lies with the developer to establish commercial intent. In this case, the Commission found that the Builder failed to substantiate that the purchase was made for commercial purposes.

Regarding delays attributed to ‘force majeure’ events like demonetization and court orders on groundwater extraction and construction, the Commission dismissed these explanations as inadequate. It cited Sachin Goel & Anr. v. M/S. Ansal Housing & Construction Limited [Consumer Case no. 1624 of 2018], where similar claims were rejected due to the availability of alternative resources. Similarly, in Narinder Sachdeva & Anr. v. M/S. Ansal Housing & Construction Limited [C.C. No. 235 of 2018], the National Consumer Disputes Redressal Commission (NCDRC) ruled that such circumstances did not qualify as ‘force majeure’ in the absence of sufficient documentary evidence.

Consequently, the State Commission held the Builder liable for deficient service for failing to deliver the unit within the stipulated period. As a remedy, the Commission ordered the Builder to refund Rs. 96,46,580/- along with 6% interest. Additionally, the Builder was directed to pay Rs. 4,00,000/- for mental agony and harassment, and Rs. 50,000/- towards litigation costs.

Posted and reproduced in Public Interest by

Adv. Sulaiman Bhimani Legal Consultant

Expert in RERA & Consumer Matters, Co-operative Scty Matters,

Deem Conveyance, Family Matters, and Property Disputes.

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