No ‘Covid’ shield for Omaxe: Why consumer body ordered builder to pay 9% interest, Rs 1 lakh for 7-year delay

A Chandigarh consumer court has pulled up real estate giant Omaxe for keeping a homebuyer waiting seven years for possession of his flat despite taking over Rs 50 lakh from him, directing the builder to pay 9 per cent interest on the amount along with Rs 1.10 lakh compensation and litigation costs, ruling that developers can’t blame prior delays on the Covid-19 pandemic.The State Consumer Disputes Redressal Commission, Chandigarh, directed Omaxe Chandigarh Extension Developers Private Limited to hand over possession of the apartment within two months and pay 9 per cent interest on the buyer’s deposited amount from September 2019 till possession is actually delivered.The additional bench of the commission, comprising Presiding Member Padma Pandey and Member Rajesh K Arya, was hearing a complaint filed by one Ajay Mahajan against Omaxe and its directors over delayed possession in “The Lake” project at New Chandigarh, Mohali. “The Opposite Parties cannot be permitted to take shelter behind subsequent events in order to justify or condone a default which had already crystallized much earlier. Such a plea is not only legally untenable but also contrary to the settled principles governing contractual obligations and consumer jurisprudence,” the consumer commission said on May 20, rejecting the builder’s attempt to blame the Covid-19 pandemic for the delay. Unfair trade practice: Commission The builder’s conduct further amounts to the adoption of unfair trade practice, since they induced the complainant to invest huge sums of money based on unequivocal representations regarding timely delivery, which were never honoured. This commission has no hesitation in holding that the opposite parties, by failing to deliver possession of the unit within the promised period, even after availing the grace period contemplated under the agreement, have rendered deficient service within the meaning of the Consumer Protection Act 2019. The complainant, having fulfilled his part of the bargain, cannot be made to suffer indefinitely due to the lapses, inefficiency, and contractual breaches committed by the opposite parties. The material available on record clearly establishes that the delay in completion of the project and in offering possession is attributable solely to the opposite parties. Even on the date when arguments in the present complaint were heard, possession had not been offered to the complainant. The default, therefore, is not merely historical in nature but is a continuing wrong, causing recurring injury and prejudice to the complainant with each passing day. It is very much established that the opposite parties still are not in possession of completion and occupation certificates. What relief did buyer get? Allowing the complaint partly, the consumer commission issued various directions to Omaxe and its directors. These include to hand over complete physical possession within two months after obtaining occupation and completion certificates. Pay 9 per cent annual interest on the deposited amount from September 10, 2019 till May 31, 2026. Continue paying 9 per cent interest every month from June 1, 2026 till possession is delivered. Pay Rs 75,000 for mental agony and harassment. Pay Rs 35,000 as litigation costs. The commission also warned that if the builder fails to comply within the stipulated timelines, the payable amount would carry enhanced interest. Paid Rs 50 lakh, but no flat Ajay Mahajan had booked a flat in Omaxe’s premium housing project “The Lake” through an allotment letter issued on September 10, 2015. The apartment, measuring around 1920 sq ft, was priced at Rs 59.07 lakh. According to the records, Mahajan paid over Rs 50.47 lakh to the builder. As per the builder-buyer agreement, possession was supposed to be delivered by September 9, 2019, after including the grace period. But even by May 2026, when the commission pronounced its verdict, the buyer was still waiting. The commission noted that the had stretched to