Bengaluru homebuyers paid Rs 1.15 crore, waited over 20 years without possession; builder ordered to pay Rs 1.51 crore including full refund with 9% interest

A group of homebuyers in Bengaluru has finally got relief after waiting more than twenty years for flats that were never handed over. The National Consumer Disputes Redressal Commission has ordered the builder, Gruha Kalyan Proprietorship Firm, to refund the entire amount paid by the buyers, with interest running from the date each payment was made.

The buyers, led by complainant Manjula Doma Roy Verghese along with eleven others, had together paid Rs 1,15,50,000 for flats in a project called Gruha Kalyan Erica. More than two decades after the project was launched, possession was still not given, pushing the buyers to approach the commission seeking their money back.

What Was The Case About


The complaint centred on long pending possession in a residential project where buyers had paid their money years ago, expecting to move into their homes within a reasonable time. Instead, the project remained incomplete for over twenty years. Frustrated by the delay, the buyers filed a case before the commission asking for a refund of the amount paid, along with compensation for the years lost waiting.

Was The Case Allowed As A Class Action

The commission admitted the complaint as a class action under Section 12(1)(c) of the Consumer Protection Act. This step mattered because it meant the ruling would cover every allottee of the project, not only the buyers who filed the case. Six other connected complaints involving buyers of sister projects under the same builder, including Lotus, Carnation, Lavender, Orchid II, Rose and Mystic, were decided along similar lines in the same order.

What Did The Commission Say

In its order, the commission held that the builder had failed to deliver the project even after more than twenty years, amounting to clear deficiency in service. The bench of presiding member Dr Inder Jit Singh and member Shashi Nandkeolyar observed that a buyer cannot be expected to wait indefinitely for possession, relying on a line of Supreme Court rulings on stalled housing projects, including the judgments in Pioneer Urban Land and Infrastructure vs Govindan Raghvan, Ireo Grace Realtech vs Abhishek Khanna, and Wg Cdr Arifur Rahman Khan vs DLF Southern Homes.

What Did The Supreme Court Rulings Say About Delayed Possession

The commission pointed to earlier Supreme Court observations stating that failure of a developer to meet the agreed timeline for handing over a flat amounts to deficiency in service, and that an allottee who has not been given possession cannot be bound to keep waiting or forced into another phase of the project. These precedents have repeatedly held that buyers in such situations are entitled to a full refund with interest, rather than being made to accept a delayed or alternate unit.

What Was The Final Order

The commission directed the builder to refund the entire principal amount paid by each allottee, with interest at 9 percent per annum calculated from the date of each deposit till the date of actual payment. The full amount has to be paid within 45 days of the order. If the builder misses this deadline, the interest rate on the pending amount rises to 12 percent per annum from the end of the 45 days till the money is actually paid.

What Compensation Did The Builder Have To Pay

Beyond the refund, the commission ordered the builder to pay Rs 35,50,000 as compensation for the harassment caused to the allottees over the years of delay. The builder was also told to bear the cost of the proceedings, including legal expenses incurred by the complainants in pursuing the case.

Along with the main case, six other complaints filed by buyers of connected projects under the same builder were allowed on identical terms, following the same refund and interest formula laid down in this order. A separate connected case was closed during proceedings, while the rest of the pending applications in the matter were also disposed of.