Chandigarh resident Naresh Garg has been awarded compensation for significant delays in receiving his apartment in Omaxe Chandigarh Extension Developers Private Limited's "The Lake" project. Garg purchased a 1,285 sq. ft. flat in December 2015 for INR 56,63,404, expecting possession by December 2019. Delays led to an agreement for a larger unit with a new possession date of July 2021, which was also missed. The State Consumer Disputes Redressal Commission ruled in Garg's favour, ordering the developer to complete the unit within two months and pay compensation with 9% interest per annum, INR 75,000 for stress, and INR 35,000 for litigation costs.
A Chandigarh resident, Naresh Garg, has been awarded compensation for the significant delays in the possession of his apartment. The State Consumer Disputes Redressal Commission ruled in favour of Garg, who had purchased a flat in Omaxe Chandigarh Extension Developers Private Limited's "The Lake" project in Mullanpur.
Garg's troubles began in December 2015 when he purchased a 1,285 square foot unit for INR 56,63,404 with the promise of possession by December 15, 2019. However, delays plagued the project. In an attempt to resolve the issue, Garg agreed to a larger unit measuring 1,850 square feet in January 2020 with a new possession date of July 31, 2021. Unfortunately, this deadline was also missed. As of January 27, 2023, the company informed Garg that construction was still ongoing, with a revised possession date of March 2024. This meant Garg faced over four years of delays.
Faced with this situation, Garg approached the Consumer Commission. He sought possession of the new unit, compensation for the inconvenience caused, and a refund on the Goods and Service Tax (GST) paid.
Omaxe, the developer, argued that the delays were due to unforeseen circumstances, including the Covid-19 pandemic. They pointed out that the Real Estate Regulatory Authority (RERA) of Punjab had extended project deadlines due to the pandemic.
The Commission disagreed with Omaxe's explanation, noting that the delays continued even beyond the revised deadlines set by RERA. The Commission ordered Omaxe to deliver the completed unit within two months of receiving the order. Additionally, Omaxe was directed to pay compensation with 9% interest per annum on the received sale consideration of INR 56,63,404 from April 30, 2022, until the possession date. This effectively penalises the developer for the financial burden placed on Garg due to the delay. Pay INR 75,000 for the mental stress, harassment, and deficient services Garg endured. And pay INR 35,000 for Garg's litigation costs to cover the legal expenses incurred while seeking justice.
This case highlights the importance of consumer rights in the real estate sector. Homebuyers facing delays can seek compensation through consumer courts if developers fail to deliver on their promises. This case also serves as a reminder for developers to be transparent about potential delays and adhere to agreed-upon timelines.
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