Builder Ordered to Refund Homebuyer Rs 36 Lakh: Consumer Court Upholds Rights

The District Consumer Disputes Redressal Commission, Chandigarh, has ruled in favor of a homebuyer, ordering a real estate developer to refund over Rs 36 lakh. The commission found that the developer failed to hand over possession of a flat and defaulted on a settlement agreement meant to compensate for the delay.

A bench of President Amrinder Singh Sidhu and Member Brij Mohan Sharma observed that the buyer cannot be made to wait indefinitely for possession and is entitled to seek a refund of the amount paid, along with interest. “The buyer to have a comfortable life and having paid her hard-earned money to have possession of a unit is not supposed to wait indefinitely for possession,” the commission noted in its order dated June 11.

Possession Delayed

The complainant alleged that she booked a ready-to-move two-bedroom flat in the developer’s project in 2020, with possession scheduled for October 2021. She initially paid Rs 4 lakh as a booking amount and later deposited Rs 30.34 lakh towards the sale consideration. In September 2023, she also paid Rs 2.02 lakh towards tiling charges demanded by the builder.

Despite repeated assurances, possession was never handed over. After approaching the Real Estate Regulatory Authority (RERA), the parties entered into a settlement agreement on August 31, 2024. The builder agreed to pay monthly rent of Rs 24,000 until June 30, 2025, with a 7% increase thereafter if possession was not offered. However, the builder stopped paying the agreed rent from December 2025, citing financial difficulties, while construction at the project also came to a standstill.

The complainant was compelled to repeatedly follow up for payment of rent and possession updates, causing considerable inconvenience and harassment. Despite service of notice, the builder did not appear before the commission and was proceeded against ex parte.

Unfair Trade Practice

The commission observed that the non-appearance of the builder drew an adverse inference against it. “The non-appearance of the OP shows that it has nothing to say in its defence against the allegations made by the complainant. Therefore, the assertions of the complainant go unrebutted and uncontroverted,” the commission noted.

The material on record proved that, despite repeated assurances, the builder continuously postponed the possession schedule and failed to complete the project within the promised period. The commission observed that under the sale agreement, possession was due on January 15, 2022, but had not been delivered even by the date of the order. It also found that the builder had failed to honor its obligations under the settlement agreement.

The commission held that the failure to deliver possession of a residential unit within the committed period amounts to a deficiency in service and unfair trade practice. “The conduct of the OP in retaining the complainant’s hard-earned money for years without delivering possession and thereafter defaulting in its obligations under the Settlement Agreement clearly constitutes deficiency in service,” the commission held.

Commission’s Order

The commission noted that the complainant was entitled to a refund of the amount deposited with reasonable compensation for the delay, mental agony, and harassment suffered by her. The commission directed the builder to refund the entire amount of Rs 36.36 lakh, pay delay compensation in terms of the settlement agreement, after adjusting any amount already paid, until the refund is made, and pay Rs 50,000 towards compensation for harassment and litigation expenses.

Why This Order Matters

The ruling reiterates that homebuyers cannot be compelled to wait indefinitely for possession when a builder repeatedly misses delivery timelines and even defaults on a settlement meant to compensate for the delay. It emphasizes that failure to honor possession commitments as well as subsequent settlement obligations amounts to deficiency in service and unfair trade practice. Consumers facing grievances may contact their respective state consumer helplines (Chandigarh helpline: 1800 300 11 007) or call the National Consumer Helpline at 1915 for assistance.