NCDRC Orders Mantra Lifestyle Homes To Refund Deposits With Interest For Delay In Delivering Possession Of Flats

Brief Facts of the Case:

The complainants — Sumit Sharma; Sanjay Shripatrao Mali and Aparna Magar; Usha Sharma and Ravi Prakash; Mayank Agrawal and Palak Singhal; Suraj Mewara and Jaya Mewara; Arun Kumar Rao; and Shilpi Shyamsukha — had booked flats in a residential project being developed by Mantra Lifestyle Homes Pvt. Ltd. (the Opposite Party).

The total sale consideration for the flats ranged from ₹29,29,210 to ₹56,86,000, and the complainants collectively paid approximately ₹2,22,81,661 towards their respective units.

The Flat Buyers' Agreements, executed between 2013 and 2016, stipulated that possession of the flats was to be delivered within six years from the date of each agreement, including a one-year grace period. Despite paying substantial amounts towards their respective flats, the Opposite Party failed to complete construction, offer possession, or obtain the requisite Occupancy Certificates

The complainants stated that they have been deprived of the use and possession of their flats for several years. Despite repeated requests, the Opposite Party failed to refund the amounts paid by them.

Hence, the complainants filed a complaint before the National Consumer Disputes Redressal Commission seeking refund of the amounts paid along with interest and compensation for the delay.

Arguments of the Complainants:

The complainants alleged that the Opposite Party violated the terms of the Flat Buyers' Agreements and committed deficiency in service. They stated that they had booked their flats between 2012 and 2015 and paid substantial amounts, yet the Opposite Party failed to deliver possession or obtain the requisite Occupancy Certificates.

They further contended that despite repeated follow-ups seeking updates on the progress of construction, they received only assurances, and the project remained incomplete. The complainants asserted that the inordinate delay, false assurances, and refusal to refund the deposits amounted to unfair trade practices on the part of the Opposite Party.

Arguments of the Respondent:

The respondent argued that the complainants had failed to comply with their financial obligations on time, which adversely affected the construction and progress of the project. They stated that complainants Mayank Agarwal and Palak Singhal were offered permissive possession of flat B-601, but they did not pay the balance amount and, therefore, could not take valid possession. The respondent further contended that the delays in construction were caused by force majeure events, including the COVID-19 pandemic and the ban on gravel imposed by the High Court of Rajasthan. Accordingly, they argued that the delay was beyond their control and, therefore, did not constitute any deficiency in service. Finally, the respondent submitted that the complaint lacked pecuniary jurisdiction and, on this basis, should be dismissed by the Commission.

Observations and Decision of the Commission:

The Commission observed that the complainants had booked their flats in time and deposited the requisite amounts, whereas the respondent/Opposite Party had neither completed the construction nor obtained the requisite Occupancy Certificates. It further noted that the permissive possession offered to complainants Mayank Agarwal and Palak Singhal could not be treated as valid possession, as the balance payment had not been made. Accordingly, all the complainants continued to be parties to the case.

The Commission rejected the Opposite Party's plea that the delays were caused by force majeure events such as the COVID-19 pandemic and the ban on gravel in Rajasthan, noting that most agreements and payments were made between 2012 and 2015, and the construction delays were within the builder's control.

The Commission also found that the total deposit amount by the complainants exceeds ₹2,22,81,661/-, which clearly falls within its pecuniary jurisdiction. It was further observed that the respondent had withheld the complainants' deposits for several years without delivering possession of the flats, constituting a clear case of deficiency in service and unfair trade practices.

ying on the Supreme Court judgments in M/s Nexgen Infracon Pvt. Ltd. Vs Manish Kumar Sinha and DLF Homes Panchkula Pvt. Ltd. Vs D.S. Dhanda, the Commission held that the complainants are entitled to a refund of their deposits along with interest and appropriate compensation.

The Commission accordingly passed the following directions;

1. The respondent is directed to refund the entire amounts deposited by all seven complainants, along with interest at 9% per annum.
2. The payment must be made within eight weeks from the date of this order; in case of delay, the interest rate shall be increased to 12% per annum.
3. The respondent is also directed to pay ₹50,000 to each complainant as litigation expenses.

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