Buyer can opt out of housing project if possession is delayed

A buyer is entitled to opt out of a housing project if there is a delay in delivery of possession of the house by the real-estate developer, the National Consumer Commission has held.

The commission said the buyer is also entitled to a full refund with reasonable interest and any deduction on the amount is unjustified.

"The petitioner was fully justified in opting out of the [hire-purchase] scheme and demanding refund of the money that she had paid along with interest," the commission said.

The commission passed the order on a petition filed by Agra resident Indira Gupta seeking quashing of the Uttar Pradesh State Consumer Commission's direction to deduct 20% from the amount to be refunded to her by the Agra Development Authority.

"We direct that Rs66,000 along with 15% interest be paid to Gupta by the authority, as ordered by the district forum, within six weeks along with Rs2,000 as cost of litigation," the commission bench headed by the president, Justice Ashok Bhan, said.

"The fact that the authority had erred in not giving possession of the house to Gupta as envisaged under the scheme and in the absence of any rules and regulations by which 20% could be deducted from the refunded amount, we are unable to uphold the order of the state commission and therefore set it aside," the commission said.

It noted that the authority admitted that there had been a long delay in completing the development work and construction of the houses.

"Even after several years, the project could not be fully completed," the commission said.

It rejected the contention of the authority that the state commission had rightly ordered deduction of 20% from the amount since Gupta had opted out of the scheme without any justification.

Earlier, the petitioner contended that she never defaulted in the payment schedule as is evident from the fact that her instalments were deposited with the Oriental Bank of Commerce, extension counter, for the Agra Development Authority.

Gupta had in 1989 applied for a mini middle-income group house and in 1990 she was allotted one. When Gupta was not given possession even after many years, however, she sought a refund of her money with interest along with compensation of Rs1.73 lakh from the authority.

Gupta subsequently filed a complaint with the district forum alleging deficiency in service and got relief.

But the Uttar Pradesh state commission modified the forum's order directing deduction of 20% from the refund money, which Gupta challenged in the apex consumer body.