Coming down heavily on the promoters of the Gurgaon One-84 housing project for imposing one-sided contractual terms on flat buyers and delaying possession, the national consumer disputes redressal commission (NCDRC) held the builder accountable for adopting 'unfair trade practices' and issued sweeping directions in favour of nearly 50 aggrieved allottees.
In an order issued on 21 May 2025, the NCDRC bench, comprising presiding member Subhash Chandra and member air-vice marshal (AVM) J Rajendra (retd) observed that the apartment buyer agreement (ABA) executed by Alpha Corp Development Pvt Ltd and Magnum International Trading Company Pvt Ltd (OP) was not only skewed against the interests of the consumers but also lacked clarity on timelines, effectively shielding the builder from all liability while placing the entire burden on the allottees.
"OP are bound to hand over possession of the units in question to each of the allottees within 36 months from the date of signing the said apartment buyers’ agreements (ABA), along with an occupancy certificate (OC). In the event of delay, the OP is liable to pay delay compensation. The allottees are not liable to pay delay payment charges to the OP beyond the 36 months prescribed for handing over possession or pay any escalation charges to the OP," the bench says.
Relying on the Supreme Court’s precedent in Pioneer Urban Land & Infrastructure Ltd vs Govindan Raghvan, the commission observed: “Such one-sided contracts are against the interest of the complainants and are bound to sign as they have already committed significant consideration,” the bench said, adding, “A term of a contract will not be final and binding if it is shown that the flat purchasers had no option to sign on the dotted line.”
The commission declared the ABAs to be 'wholly one-sided and unfair', and held that they constituted unfair trade practices under section 2(r) of the Consumer Protection Act, 1986.
Home-buyers had booked flats between 2011 and 2012 in the Gurgaon-based project. Although the apartments were to be handed over within 36 months from the construction of the ground floor slab, the builder only obtained the OC in October 2017. To make matters worse, the builder demanded exorbitant final payments—some over 300% higher than expected—citing unexplained increases in 'saleable area' and construction escalation.
Many flat-buyers who resisted were threatened with cancellation. Several others reluctantly deposited the additional charges under protest to avoid further delay.
“The final demand notices required payments of about three times the amount payable under the original contractual terms, while offering only minimal compensation for the substantial delays,” the complainants alleged.
The builder argued that the contract terms were tailored to reflect 'ground realities' such as construction material shortages, and that buyers were fully aware of escalation clauses and saleable area adjustments.
However, the commission was not convinced. In scathing terms, it noted that: “The OP takes no liability with respect to delay in handing over possession… This leaves the contract completely uncertain as regards when possession is to be handed over.”
It further stated that such terms imposed harsh obligations on consumers but offered blanket protection to the builder, thus failing the test of fairness.
In its order, NCDRC directed that allottees are entitled to receive simple interest at the rate of 6%pa (per annum) on the payments they made, calculated from three years after the ABA was signed until the date possession was offered.
The commission also ruled that builders cannot impose any cost escalation or delay penalty beyond the agreed 36-month timeline. Any additional charges claimed due to an increase in the saleable area must conform to the 10% cap specified in the ABA and builders are required to refund or recalculate such amounts accordingly, NCDRC says.
Furthermore, once buyers pay the legitimate dues, excluding any illegal demands, the builder must execute the conveyance deeds within two months. Failure to do so will attract a penalty of Rs10,000 per month for each allottee. The commission also clarified that buyers are responsible for statutory taxes and registration fees, unless there was an alternative agreement with the builder.
This ruling is likely to resonate across the real estate sector, particularly for projects with delayed timelines and coercive demand notices.
While many buyers have already taken possession under protest, this order now enables them to claim monetary relief. It also mandates the execution of sale deeds, putting an end to the prolonged uncertainty over property ownership.
NCDRC has directed that all payments and conveyances be completed within two months, with additional penalties for delay.
(Consumer Complaints Nos3751, 3752, 3753, 3754 of 2017 Date: 21 May 2025)
