Homebuyer paid Rs 1.73 crore for a flat in Gurgaon, builder delayed project and alleged that he booked unit for commercial gain; he fought and won the money back with 12% interest

When Mr Rajinder Singh booked a flat in Gurgaon to have a home of his own, little would he have thought that the wait would stretch over a decade. He paid close to Rs 1.73 crore for the home, was promised possession within three years, but was kept waiting for years.

Later, it came to light that the construction work was not completed, and the builder failed to deliver possession of the apartment. After waiting for 7 years, Mr Singh took the legal route by first approaching NCLT Chandigarh and then the Haryana Consumer Disputes Redressal Commission, where he finally won.


Let’s take a look at how Mr Singh fought and won against the builder after waiting several years for possession.

No possession even after 14 years: How did the homebuyer end up here?

In July 2012, Mr Singh booked a 2600 sq ft flat in a project in Gurgaon’s Sector 83 at basic sale price of Rs 6,428.50 per sq. ft., besides other charges. The total basic selling price of the subject apartment was stipulated to be Rs 1.67 crore.

ALSO READ | Booked flats for Rs 1.16 crore, two homebuyers awaiting possession find project lapsed; MahaRERA orders builder to give money back with interest

A Builder Buyer Agreement was executed in November 2012, according to which the builder was to complete the construction within 3 years from the date of execution of agreement. After assurances from the builder, Mr Singh took a home loan and paid Rs 1,72,93,048.76 for the unit.

In his complaint, Mr Singh has alleged that the builder had a negligent and lethargic attitude towards the project and so failed to complete the project.

Before approaching the State Consumer Commission, the homebuyer even requested the developer, through emails and a letter in December 2018 and January 2019, to refund the deposited amount along with interest.

Builder alleges homebuyer bought unit for commercial purposes

After a notice was issued, the builder submitted that Mr Singh purchased the said unit for his “own commercial gain”, adding that “the complainant had voluntarily invested in the said project keeping in view the profit viability on the resale of the said unit.”

While agreeing that Mr Singh paid close to Rs 1.73 crore for the unit, proxy counsel for the builder argued that the total sale price of the said unit was Rs 1,89,54,500, which included the other charges like electricity meter installation, PLC, Club Membership, EDC, IDC and IFMS.

The builder denied that the buyer made all the payments in time, alleging that he delayed the payment of instalments, and it was only after sending several reminders that the buyer used to pay the due instalments.

ALSO READ | Paid Rs 14.51 lakh for a home in Gurugram, buyer finds no progress at construction site as builder lost registration; HRERA directs refund with 10.80% interest

Acknowledging the delay in the project completion, the builder cited reasons beyond its control, which included:

a) Initiation of the GAIL Corridor which passes through the project,

b) Non-removal or shifting of the defunct High-Tension lines passing through the lands,

c) Non-acquisition of sector roads by HUDA to enable accessibility to the various corners of the project.

State Commission’s final order: Homebuyer wins

After observing the facts of the case and hearing both sides, the commission found that there was a deficiency in service and unfair trade practice on the part of the builder. It ordered the builder to refund the deposited amount of Rs 1,72,93,048.76 along with 12% interest from the date of the respective deposits till realisation.

Mr Singh will also get Rs 3 lakh as compensation for mental harassment and physical agony. In addition, the commission ordered another Rs 1 lakh for Mr Singh as litigation expenses.

Gaurav Singh, Counsel at Clavius Legal, told ET Wealth Online this was a clear case of long non-delivery. “The buyer had paid about Rs 1.73 crore, partly through a home loan, and had asked for a refund in writing in 2018 and 2019 before he litigated. The builder blamed the GAIL corridor, high-tension lines and sector roads that had not been acquired. The Commission granted a refund notwithstanding those explanations.”

After nearly 11 years of delay, with no firm date for possession, a buyer cannot reasonably be expected to wait indefinitely. That is consistent with the principle recognised in settled consumer law, Singh added.

Why was the builder’s ‘investment purpose’ argument not considered?

The builder argued that the flat was bought for resale and profit. The order does not deal with that objection expressly. The commission recorded the booking as one for personal residence, noted the home loan, and decided the case principally based on non-delivery, Singh explained.

“The builder has to establish that the transaction falls within the commercial-purpose exclusion; simply asserting that a property was purchased as an investment is not enough. Buying one flat that may appreciate is not, by itself, the same as carrying on a business of trading in property,” he added.

It is worth noting that the fact that a buyer is an investor does not, by itself, extinguish the developer’s contractual or statutory obligations. However, if the purchase genuinely falls within the ‘commercial purpose’ exclusion, the buyer may not qualify as a consumer, and a consumer complaint may not be maintainable.

The refund remedy under Section 18 of the RERA Act, however, does not depend on the flat being purchased for the buyer’s own use, and the Supreme Court has recognised the allottee’s right to seek refund with interest where the promoter fails to give possession within the agreed period.