Maharashtra Consumer Commission Orders Mumbai Builder to Hand Over Long-Delayed Flat or Refund ₹39 Lakh

The Maharashtra State Consumer Disputes Redressal Commission (MSCDRC) has granted relief to a homebuyer who has been waiting over a decade for possession of a flat booked in Mumbai. The commission directed Kandivali-based Rainbow Constructions and its partners to complete the project, obtain the necessary certificates, and hand over possession of the flat after receiving the balance consideration.

If possession cannot be given, the developer has been directed to provide a flat of similar size and configuration in the same building or locality and execute the necessary sale documents within three months. Alternatively, the builder must refund Rs 39 lakh paid by the complainant, along with 12% annual interest from the date of payment until realisation.

The commission held the builder guilty of deficiency in service and unfair trade practice. It also awarded Rs 2 lakh as compensation for mental agony, harassment, and inconvenience suffered by the complainant, along with Rs 50,000 towards litigation and incidental expenses. The complaint was filed by Kunal Teejesh Gandhi through his father and power-of-attorney holder, Teejesh Virendra Gandhi, against Rainbow Constructions and its partners in relation to the “Govind Niwas” project in Kandivali.

According to the complaint, Gandhi booked Flat No. 502 in May 2014 for Rs 57.15 lakh and paid Rs 39 lakh, nearly 70% of the agreed consideration. The builder had promised possession by February 28, 2015. However, despite repeated follow-ups, possession was never handed over and the agreement for sale was not registered.

Opposing the complaint, the builder claimed Gandhi was an investor who had advanced money to the project with an expectation of profits and that the amount had already been repaid through intermediaries and brokers. The commission rejected these contentions, observing that the developer failed to produce any documentary evidence such as an investment or loan agreement.

It held that the allotment letter and proposed agreement reflected a standard residential property transaction and that ownership of another property does not make a purchaser an investor. The bench noted that the developer had admittedly received Rs 39 lakh and yet failed to deliver the flat even in 2026. It described the delay of more than a decade as a “gross deficiency in service” and an “unfair trade practice.”

The commission further held that failure to register the agreement for sale violated obligations under the Maharashtra Ownership Flats Act (MOFA) and the Real Estate (Regulation and Development) Act (RERA). Observing that a consumer cannot be expected to wait indefinitely for uncertain possession, the commission ruled that the complainant was entitled to either possession of the flat or a refund with interest.