There have been so many cases where a homebuyer never received possession of the flat/property despite paying the full amount. A similar case has once again come to light, but here not only did the homebuyer pay the total consideration amount but was even asked to pay double the purchase price as the valuation of the flat has gone higher.
Mr Shakil Anwar, working in the USA, booked a 1208 sq ft flat with a car parking space in Fazal Imam Complex on Fraser Road in Patna. This was confirmed on 29.04.2005, and the agreement for sale was signed on 05.08.2007 (executed on 25.08.2007).
During this time, the total consideration amount of the flat with parking was fixed as Rs 10,41,250. Mr Anwar deposited Rs 9 lakh to the builder before the execution of the agreement, besides Rs 2 lakh as commission fee to a partner of the construction company.
The remaining balance of Rs 1,41,250 was due in two instalments (on 10.10.2007 and 15.02.2008). While the delivery was expected in August 2008, Mr Anwar kept waiting until 2012 and decided to take the builder and company to court.
He first filed a complaint case in 2012, which was dismissed in 2017. The homebuyer then approached the National Commission in 2019, which remanded the case to the State Commission, where the present case was heard.
Booked flat in 2005, no possession to date: What went wrong?
Before the promised delivery, Mr Anwar was again asked to pay Rs 4 lakh into the account of the company’s partner as “the construction cost has gone up”. He opposed it but eventually deposited the money through two cheques in 2007.
Since the flat wasn’t delivered even after having paid more than the consideration amount, Mr Anwar’s mother went to the builder’s office. There, the builder and the partner asked her to deposit Rs 2 lakh as final payment to get delivery of the flat with parking space.
So, Mr Anwar deposited another Rs 2 lakh on 05.04.2008 through cheque. In all, he deposited Rs 13 lakh against the total consideration amount of Rs 10.41 lakh. This is besides the Rs 2 lakh paid as commission fee to the partner.
Now, instead of handing over the flat, the builder told Mr Anwar’s mother that it was not complete, and the work was stopped because of some litigation. They promised possession after the work is completed.
What happened next
Mr Anwar believed that the flat would be delivered after disposal of the litigation. However, after waiting for another 3 years, he came to Patna in September 2011 and went to the builder with his sister to inquire about the same.
Allegedly, one of the directors of the construction company refused to hand over the flat, demanding another Rs 20 lakh for possession, and threatened them. So, Mr Anwar filed an FIR before Kotwali Police Station.
In June 2012, Mr Anwar was again called to Patna for possession of the flat. When he went to their office, the builder and the director asked him to first withdraw the criminal case and pay Rs 20 lakh more as the valuation of the flat had gone higher.
What did the builder say in the consumer commission?
In a written statement, the builder and company argued that when the dispute regarding construction of said project was pending before the High Court, they had informed Mr Anwar through registered post thrice to pay the balance amount as per agreement. However, Mr Anwar ignored it; therefore, the builder, vide letter dated 25.04.2008, informed him regarding cancellation of allotment and termination of agreement.
After taking note of the presentations made by both sides, the State Consumer Dispute Redressal Commission, Bihar, Patna, found the builder did not disclose when the building was completed and the flat was ready to be handed over. It discovered that Mr Anwar paid a total of Rs 15 lakh, far more than the agreed consideration of Rs 10.41 lakh, but possession was not handed over on the pretext of non-payment of Rs 1,41,250.
This amounts to unfair trade practice, the state commission underlined, adding that the alleged 3 letters the builder sent to the homebuyer regarding cancellation of allotment and termination of agreement are false, concocted and manufactured documents.
Moreover, the builder and the construction company have not disclosed the present status of the flat and whether the same has been sold to a third party at a higher price. “The conduct of opposite parties has been unjust, unfair, dishonest, immoral, unethical and fraudulent.”
Final order: Homebuyer wins after 14-year fight
Stating that the builder took undue advantage of Mr Anwar residing outside the country, the Bihar Consumer Commission directed the builder, construction company and the director to:
-Refund Rs 15 lakh deposited by Mr Anwar with 12% interest from the date of deposit of the amount till its payment within 60 days.
-Pay Rs 10 lakh compensation for harassment and mental agony.
-Pay a sum of Rs 2 lakh as the litigation cost.
What worked in the homebuyer’s favour?
Bhargav KS, Managing Partner at K.S & B.K.S Law Associates, Bengaluru, told ET Wealth Online that the buyer’s strongest evidence was the combination of payment receipts, the agreement acknowledging Rs 9 lakh already received, and further payments that the builder did not deny.
“Importantly, it did not merely treat the cancellation correspondence as unproven: it expressly held the letters fabricated, unserved and legally ineffective.” Moreover, the builder’s failure to disclose the flat’s status, coupled with its deliberate non-appearance after remand, further reinforced the Commission’s adverse assessment of its conduct, he shared.
Why didn’t the commission order delivery of flat to the buyer?
Mr Anwar had requested the Commission to order the builder to deliver the flat, along with refund and compensation. However, the Commission didn’t say anything on this. Bhargava explained that the order does not expressly explain why possession was not granted.
The strongest indication is the Commission’s observation that the builder concealed the flat’s present status, including whether it had been sold to someone else. That uncertainty may have made a possession direction less workable.
Key takeaways for homebuyers
Preserve the agreement, receipts, bank records and all correspondence: here, acknowledged and undisputed payments defeated the builder’s default narrative.
If cancellation is asserted, challenge both its contractual justification and proof of service. Seek clear disclosure of the flat’s construction, ownership and allotment status, rather than relying on assurances.
Frame relief carefully: expressly seek possession and conveyance, while pleading refund, interest and compensation in the alternative where appropriate. Finally, do not abandon proceedings after an adverse procedural order.