Introduction

The case of Rajesh Makhija & Anr. vs. M/s ORS Infrastructure Pvt. Ltd. was adjudicated by the State Consumer Disputes Redressal Commission on March 25, 2021. This legal dispute centers around the delayed possession of a residential flat under a consumer transaction, highlighting significant aspects of the Consumer Protection Act, 1986, particularly concerning the definition of deficiency of service and the rights of consumers in real estate transactions.

Summary of the Judgment

The complainants, Mr. Rajesh Makhija and Mrs. Taruna Makhija, had entered into a Flat Buyer Agreement on October 12, 2008, with M/s ORS Infrastructure Pvt. Ltd. for the purchase of flat no. 904 in Royal Residency, Faridabad, paying a total of ₹26,10,000, out of which ₹17,56,500 was paid by the complainants. According to the agreement, possession was to be delivered within 36 months from the signing date. However, nearly nine years later, possession was still pending due to internal disputes within the developer's organization.

The State Commission held that the developers were deficient in their service by failing to deliver possession within the agreed timeframe. As a result, the Commission directed M/s ORS Infrastructure to refund the amount paid by the complainants with interest, pay compensation for mental agony and harassment, and cover litigation costs.

Analysis

Precedents Cited

The judgment extensively cites several landmark cases to bolster its reasoning:

• Rohit Srivastava v. Paramount Villas Pvt. Ltd. (2017): Affirmed the territorial jurisdiction of the State Commission based on the location of the developer's registered office.
• Mehnga Singh Khera & Ors. vs. Unitech Ltd. (2020): Clarified the definition of 'consumer' in real estate, determining that individuals not engaged in the regular business of buying and selling properties qualify as consumers.
• Aashish Oberai vs. Emaar MGF Land Limited (2017): Emphasized that repeated failures to deliver possession constitute a continuous wrong, legitimizing ongoing legal action by the consumer.
• Arifur Rahman Khan & Ors. vs. DLF Southern Homes Pvt. Ltd. & Ors. (2020): Defined deficiency of service in the context of real estate and outlined compensation mechanisms for delayed possession.
• Fortune Infrastructure vs. Trevor D'Lima (2018): Supported the notion that consumers should not endure indefinite delays in possession and are entitled to refunds and compensation.

Legal Reasoning

The Commission meticulously evaluated the statutory provisions under the Consumer Protection Act, 1986, particularly focusing on:

• Jurisdiction: Section 17 establishes the State Commission's authority based on the value of the claim and the territorial nexus of the opposite party. Given that the claim exceeded ₹20 lakhs but was below ₹1 crore, and the developer's office was in Delhi, the Commission affirmed its jurisdiction.
• Definition of Consumer: Citing Mehnga Singh Khera and Aashish Oberai, the judgment confirmed that the complainants were individual buyers, not engaged in commercial property trading, thus fitting the consumer category.
• Cause of Action: The prolonged delay in possession, breached by the developer beyond the contractual period, constituted a valid cause of action, supported by the principle that non-delivery of possession is a continuous wrong.
• Deficiency of Service: Based on the case law, the Commission identified the developer's failure to deliver possession within the stipulated time as a deficiency, entitling the complainants to remedies including refunds, interest, and compensation for mental agony.
• Compensation: Following the Supreme Court's guidelines, interest was calculated at 6% per annum with a provision for increased interest in case of further delay, alongside fixed compensatory sums for harassment and litigation costs.

Impact

This judgment reinforces the accountability of real estate developers under the Consumer Protection Act. It underscores the following implications:

• Strengthens consumer rights by ensuring timely delivery of possession and providing clear remedies in case of delays.
• Clarifies the definition of 'consumer' in the context of real estate, aiding future litigants in establishing their status.
• Affirms the State Commission's jurisdiction in cases where the value of the claim falls within prescribed limits and the developer has a territorial nexus.
• Sets a precedent for calculating interest and compensation, providing a blueprint for similar cases to ensure uniformity in judgments.
• Deters developers from protracting possession timelines by imposing financial liabilities and reputational damage.

Complex Concepts Simplified

Conclusion

The judgment in Rajesh Makhija & Anr. v. M/s ORS Infrastructure Pvt. Ltd. serves as a pivotal reference in consumer protection within the real estate sector. By affirming the rights of individual buyers against delays in possession, the State Consumer Disputes Redressal Commission has reinforced the legal obligations of developers. This case delineates clear parameters for deficiency of service, ensures appropriate compensation mechanisms, and fortifies the consumer's position in contractual disputes, thereby contributing significantly to the jurisprudence governing real estate transactions in India.