Builder Ordered to Pay Homebuyer ₹1.1 Lakh for Delay in Possession By Chandigarh State Consumer Disputes Redressal Commission

The State Consumer Disputes Redressal Commission has directed Omaxe Chandigarh Extension Developers Private Limited to compensate Naresh Garg, a resident of Sector 24-D, ₹1.10 lakh for failing to deliver the possession of an apartment on time. The commission found Omaxe guilty of deficient service and unfair trade practices in their ‘The Lake’ project at Mullanpur, SAS district.

Background of the Case

Naresh Garg purchased a 1,285 square feet unit in the ‘The Lake’ project for ₹56,63,404 as per an agreement dated December 16, 2015. The possession was expected by December 15, 2019. However, when the possession was not delivered on time, Garg accepted an offer to relocate to a bigger unit measuring 1,850 square feet under a new agreement dated January 29, 2020. Despite this adjustment, the possession for the larger unit was also delayed beyond the committed date of July 31, 2021.

Continued Delays and Legal Action

In an email dated January 27, 2023, the company informed Garg that construction was still ongoing and possession would be delivered by March 2024. Frustrated by the continuous delays, Garg approached the State Consumer Disputes Redressal Commission, seeking possession of the new unit along with compensation for the delay, mental agony, and harassment. He also sought a refund on the GST paid.

Omaxe's Defense and Commission's Verdict

Omaxe defended the delays citing force majeure conditions, including the COVID-19 pandemic. They stated that the Real Estate Regulatory Authority (RERA), Punjab, had extended the project’s deadline multiple times due to these conditions. 

After considering both sides, the Commission noted that even the extended deadlines were not met, indicating a significant delay. Consequently, the Commission ordered Omaxe to hand over the physical possession of the unit, complete in all respects, within two months from the receipt of the order. This must be done after obtaining the necessary certificates from the authorities and receiving the remaining sale consideration from Garg.

Compensation and Penalties

In addition to delivering the possession, Omaxe was ordered to execute the sale deed within one month of delivering the possession. The Commission also directed Omaxe to pay compensation at 9% interest per annum on the received sale consideration from April 30, 2022, until July 31, 2024, within 30 days of the order. If delayed, the compensation would carry a 12% interest per annum until paid. Furthermore, Omaxe must continue to pay compensation at 9% interest per annum from August 1, 2024, onwards, every month until compliance.

Omaxe was also directed to pay an additional ₹75,000 to Garg for mental agony, harassment, deficiency in service, and adoption of unfair trade practices. Moreover, they were instructed to pay ₹35,000 as litigation costs within 30 days, failing which these amounts would also carry 9% interest per annum until realization.

This verdict by the State Consumer Disputes Redressal Commission underscores the importance of timely possession and fair practices in the real estate sector. It serves as a reminder to developers to adhere to their commitments and provide transparent services to homebuyers.

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