Mumbai Consumer Commission Slams Developers, Orders Flat Possession With 8% Interest After 5-Year Delay; Builder And Marketing Partner Held Liable

Mumbai: The State Consumer Disputes Redressal Commission, has ordered ERA Realtors Pvt. Ltd. and Omkar Realtors & Developers P. Ltd. to immediately execute the sale agreement and hand over possession of a flat in the "Omkar Alta Monte" project in Malad (East), after a delay of nearly five years.

The Commission, in its order directed the developers to pay 8 per cent annual interest on the deposited amount of over Rs 1.42 crore from April 2018 until the date of actual possession.

Complaint by Homebuyers

The complaint was filed by Vivek Saxena, Mayadevi Saxena, and Shaily Saxena, who had booked Flat No. 1103 with a total agreed consideration of Rs 1,67,30,500. The complainants had already paid a substantial sum of Rs 1,42,25,627, or nearly 80 per cent of the total flat price.

Possession Delays and Developer Excuses

The original promised date of possession was December 2018. The Commission noted that despite numerous requests and several unilateral extensions of the possession date by the developers, the flat had still not been delivered or received an Occupancy Certificate (OC) by the date of filing.

The developers cited "force majeure" events, including the COVID-19 pandemic and delays in environmental clearances, as reasons for the timeline extension. However, the Commission rejected the argument, noting that the substantial delay had commenced well before the pandemic began in 2020.

The orders cited the Supreme Court’s ruling in M/s Imperia Structures Ltd. Vs. Anil Patni and Another, emphasizing that RERA registration extensions do not automatically defer a homebuyer's right to seek action based on the original agreement terms.

Liability of Third Party

The Commission also held the third Party, ICICI Home Finance Company Ltd., jointly and severally liable. ICICI Home Finance had argued that it was wrongly impleaded as it had no privity of contract with the homebuyers.

However, the Commission found that the company had acted as a "marketing partner" and had introduced the project to the complainants through an email that mentioned a proposed possession date of March 2018.

Misleading Advertisement and Deficiency in Service

The judgment stated that a marketing entity cannot absolve itself of responsibility merely by issuing a disclaimer, especially when the promotional material forms the basis of a consumer's decision to purchase.

The promotional email was classified as a "misleading advertisement" under the Consumer Protection Act, establishing the marketing partner's involvement in the transaction leading to the grievance.

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Developers Directed to Execute Agreement

The Commission found the developers guilty of deficiency in service and unfair trade practices, thereby directing the ERA Realtors and Omkar Realtors are jointly and severally directed to execute the registered Agreement for Sale and hand over possession of the flat, along with the Occupancy Certificate and brochure amenities, within two months of the order.

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