Paid advance but Mohali plot ‘not delivered in 18 months’, man secures Rs 15 lakh payout

The Chandigarh District Consumer Commission has directed the Punjab Urban Planning and Development Authority (PUDA) to refund Rs 14.51 lakh and pay Rs 50,000 in compensation and litigation costs to a buyer after it allegedly failed to deliver a plot in Mohali within the promised 18 months. The commission held that the delay amounted to a deficiency in service and unfair trade practice.

President Pawanjit Singh and member Brij Mohan Sharma observed that the complainant had successfully proved his allegations. “It is thus evident from the record that OP (PUDA) could not complete the project in which the subject plot was booked by the complainant, either within the agreed time or even within a reasonable time thereafter, and even as on date, OP has failed to adduce on record any tangible evidence e.g. completion certificate, occupation certificate, photographs etc,” the October 5 order said.

The order added, “It is own admitted case of the OP (PUDA) that till 20.5.2022 it was not able to hand over possession of the subject plot to the complainant, as is also evident from the letter (Ex.C-5), which in itself amounts to deficiency in service and unfair trade practice on its part.”

No plot, no refund for years

The man purchased a 268-square-yard residential plot in PUDA’s Gateway City project in Mohali, for a tentative cost of Rs 53.76 lakh in 2015. As per the terms of the letter of intent (LoI), the complainant made a payment of Rs 16.08 lakh before the allotment of the plot, and the balance was to be paid only after issuance of the allotment letter.

However, when the complainant visited the site, he found that the plot allotted was not feasible and, therefore, he immediately approached PUDA and requested either a refund of the amount or allotment of another feasible plot of the same size, upon which the authority assured him that it would refund the amount.

Thereafter, the complainant repeatedly visited the office of PUDA concerning the status of his refund, but in 2017 the authority allegedly refused to refund the amount and assured that it would allot another plot, to which the complainant reluctantly agreed. However, after two years, it reportedly refused to allot any other plot as well.

PUDA allegedly also failed to obtain sanctions from the appropriate government authorities despite getting the sale consideration from the complainant and illegally retaining the same. Claiming that the aforesaid acts amount to deficiency in service and unfair trade practice on its part, the complainant moved the consumer commission.

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The authority filed its written reply to the complaint, raising preliminary objections on maintainability, referral of the matter to arbitration under the arbitration clause, concealment of facts, limitation, cause of action and jurisdiction.

The commission noted that a letter dated November 14, 2022 was issued to the complainant. Regarding the delay in handing over possession, the authority stated that the complainant had not yet given his consent sought through a letter. It, however, admitted receiving an amount of Rs 14.51 lakh from him before the allotment.

In light of the material on record, the commission allowed the complaint and directed PUDA to refund Rs 14.51 lakh to the complainant, along with Rs 50,000 as compensation for mental agony and harassment, as well as litigation costs.

Takeaway

The order highlights that it is settled law that collecting money from prospective buyers and selling plots/units in a project without obtaining required approvals or clearances is an unfair trade practice on the part of the project proponent.

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For consumer-related grievances, individuals may contact the consumer helpline in their respective states and Union territories (Chandigarh: 0172-270-0183) or call the National Consumer Helpline on 1915 for assistance.

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