Refund Money or Hand Over Possession of Flats to Home-buyers; NCDRC to Puri Constructions and Florentine Estates
Moneylife Digital Team 13 March 2023
National consumer dispute redressal commission (NCDRC) has directed Puri Constructions Pvt Ltd and Florentine Estates of India Ltd to either refund the collected amount or hand over possession of the flats to respective buyers.
NCDRC held this decision on the complaints filed by two buyers, Lal Lakhiani and Roma Gupta. 
In the order, presiding member justice Ram Surat Ram Maurya, and member Dr Inder Jit Singh, says “ In the instant case, there is a delay of only 10 months in handing over the possession of flat by the construction companies from the committed date, which is not unreasonable.  Hence, the complainants in the present circumstances are obligated to take possession of the flat and the construction companies are obligated to pay delay compensation for the period of delay.  However, if due to the reason that they have mortgaged the entire project and Puri Constructions are not entitled to sell the said units as the license is issued in the name of Florentine Estates, the complainants wish to seek a refund, they can do so without the imposition of any penalties, and without any interest by builders on their principal amount.” 
Lal Lakhiani’s brother Mohan and other family members had purchased a flat in the project launch Emerald Bay situated in Sector 104, at Village Dhanwapur, Gurgaon, Haryana. This was launched by Puri Constructions. The buyer and builder executed a buyer’s agreement for the flat, which cost Rs1.70 crore. 
In the agreement made the builders were liable to hand over the possession of the apartment within 48 months from the date of the deal, i.e., by 29 October 2017. A total of Rs1.66 crore was paid by the buyers. 
However, the developers failed to complete the construction. The buyers came to know that Puri Construction, representing to be constructing the Emerald Bay project, is not entitled to sell apartments in the project and collect money from the allottees since the license for the project has been issued to Florentine Estates of India Ltd.
Both construction companies mortgaged the entire project, including land and structures constructed or to be built thereon, on a first exclusive charge basis in favour of PNB Housing Finance Ltd. The mortgage was done to secure a loan from PNB Housing Finance Ltd. This clearly violated the agreement and the buyers filed a complaint. 
A similar complaint was filed by Roma Gupta also. 
The construction companies contented that the complaints are not maintainable as they have been filed after the expiry of five months after the offer of possession of the unit. They have already discharged all their obligations under the BBA before filing the complaint and a breach of the agreed terms is on the part of the complainants. 
It was also contended by the builders that the complainants entered a transaction for commercial purposes. 
NCDRC, after perusal of all records, found that the construction companies failed to produce any evidence to substantiate their contentions. NCDRC also stated that the delay of 10 months in handing over the possession could not be excused. 
Roma Gupta had made a payment of Rs1.48 crore, and Mr Lakhiani and his family had made a payment of Rs1.66 crore to the construction companies. 
NCDRC  directed that either the companies should hand over the possession of apartments or, if the buyers seek a refund, the amount collected should be returned without any interest and the imposition of any penalty. 
Along with a litigation cost of Rs25,000 each, the builders are obliged to pay delay compensation in the form of simple interest of 6% from 29 April 2018 to 21 September 2019.
(Consumer Case Nos1087/1088 of 2019   Date: 6 January 2023)
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