Chandigarh State Commission Dismisses Builder's Appeal, Upholds Refund of ₹23.60 Lakh With 9% Interest in Crescent Parc Plot Dispute
The State Consumer Commission at Chandigarh dismissed M/s Impact Sare Magnum Townships' appeal, holding that no valid possession was ever offered and the complaint was not time-barred.
The State Consumer Disputes Redressal Commission, U.T., Chandigarh (Additional Bench) on 1 June 2026 dismissed an appeal filed by M/s Impact Sare Magnum Townships Pvt. Ltd. against an order of the District Consumer Disputes Redressal Commission-II, U.T., Chandigarh dated 17 January 2025. The District Commission had partly allowed consumer complaint No. 93 of 2022 filed by Shiv Rattan Kapahi and Sandeep Kapahi, directing the builder to refund ₹23,60,270/- with interest at 9% per annum from the dates of respective deposits, along with a lump sum of ₹50,000/- as compensation and litigation expenses, within 60 days. The State Commission upheld every finding, rejecting the builder's challenges on limitation, territorial jurisdiction, validity of possession, and the rate of interest awarded.
The Plot Booking and What Followed
On 31 March 2012, Shiv Rattan Kapahi and his son Sandeep Kapahi booked a 200 sq. yds. plot, No. 106, in the builder's project “Crescent Parc” at village Vallah, GT Road Bypass, Amritsar, Punjab. The total sale consideration was ₹24,26,000/-. The booking application carried an assurance that developed possession would be handed over by 31 December 2013, with a grace period of six months. A delay compensation of ₹5/- per sq. mt. per month was also promised.
An allotment letter was issued on 18 October 2012 and a plot buyer agreement was executed on 4 April 2013. Between the booking date and 2 April 2014, the complainants paid a total of ₹23,60,270/- to the builder on various dates. The builder acknowledged this amount in a letter dated 2 September 2021.
On 25 March 2014, the builder issued a possession letter. When the complainants visited the site, they found barren land with no plot markings, no connecting roads, and no sewerage, water, or electricity supply. The complainants sent representations from 2014 through 2021 and finally served a legal notice on 27 September 2021. The builder's reply of 2 September 2021 itself disclosed that an application for a completion certificate had been made only on 21 October 2019 and the matter was still under consideration.
The complainants filed consumer complaint No. 93 of 2022 before the District Commission on 27 January 2022, seeking either delivery of legal possession or a refund with interest.
The Builder's Case Before the State Commission
M/s Impact Sare Magnum Townships, through its Director Shri Ajay Singh Cheema and represented by Sh. Mrigank Sharma, Advocate, challenged the District Commission's order on several grounds.
The primary ground was limitation. The builder argued that the allotment was made in October 2012, the agreement in April 2013, and possession was offered in March 2014. The complaint was filed only in January 2022 without any application for condonation of delay. The builder contended that the cause of action had arisen by 31 December 2013 at the latest, and the complaint was therefore barred under the two-year limitation prescribed by consumer law.
On territorial jurisdiction, the builder argued that the project is situated at Amritsar and no cause of action arose within Chandigarh.
On the merits, the builder contended that possession had been validly offered in March 2014 along with statutory approvals from the Amritsar Development Authority, and that photographs showed the project was ready for construction. It was further argued that non-issuance of the completion certificate was due to technical reasons and not for want of development. The builder also contended that out of more than 350 plots, possession had been delivered to several allottees who were residing there, and that the complainants themselves had failed to deposit stamp duty and other charges required for execution of the sale deed. Finally, the builder submitted that the interest rate of 9% per annum was excessive.
The Complainants' Response
Represented by Dr. Sunil Mallan, Advocate, the complainants submitted that the District Commission had rightly appreciated the facts and documentary evidence. They pointed out that the builder had submitted a cheque of ₹25 lakh before the District Commission on 12 March 2025 but failed to pay the remaining amount, thereby failing to comply with the decretal order. They further stated that the builder had not placed on record any occupation certificate, completion certificate, or other mandatory statutory approvals.
On territorial jurisdiction, the complainants stated that they reside in Chandigarh at H.No. 621, Ground Floor, Sector 41-A, and that the last communication between the parties also took place within Chandigarh's jurisdiction. On the merits, they stated that only 7 plots out of 364 had been constructed, amounting to virtually zero development, and that the purpose of purchasing the plot had been entirely defeated.
How the Commission Reasoned
The Commission, in an order authored by Mr. Rajesh K. Arya, Member, addressed each ground in turn.
On limitation, the Commission held that in cases involving non-delivery of possession or delivery of incomplete or defective possession, the cause of action is a continuing one that subsists until the deficiency is rectified or appropriate relief is granted. The builder had neither delivered lawful and complete possession nor obtained a completion certificate as of the date of the order. The offer of possession in March 2014, made without basic amenities or statutory approvals, was characterised as “paper possession, conferring no enforceable rights” upon the complainants. The complaint filed in 2022 was therefore held not to be time-barred.
On territorial jurisdiction, the Commission referred to Section 47(4) of the Consumer Protection Act, 2019, which mirrors Section 20 of the Code of Civil Procedure. Sub-section (d) of Section 47(4) confers jurisdiction on the Commission within whose limits the complainant resides or personally works for gain. Since the complainants reside in Chandigarh, the District Commission at Chandigarh had territorial jurisdiction. The objection was rejected.
On the validity of the possession offer, the Commission held that the District Commission's finding that the alleged offer was illusory was fortified by the builder's own documents. The builder's request for issuance of a completion certificate in 2017 established that the project was incomplete even then, well after the purported possession offer of March 2014. The Commission reiterated the settled position that an offer of possession without mandatory approvals and without basic infrastructure — roads, sewerage, water supply, and electricity — does not constitute a valid offer in law and amounts to both deficiency in service and unfair trade practice.
The Commission also rejected the builder's claim that development stood completed in 2013. The photographs produced before the District Commission were found to neither establish the timeline nor the extent of development. The admitted absence of a completion certificate was treated as conclusive against the builder's position.
On the complainants' alleged default in payment of stamp duty and other charges, the Commission held that once the builder had failed to deliver legally valid and complete possession within the stipulated or reasonable period, the complainants could not be compelled to perform their part of the contract. The Commission observed that the law does not require a consumer to accept an incomplete project or invest further amounts in a legally deficient development.
The argument that non-issuance of the completion certificate was due to “technical reasons” was also rejected. The Commission held that statutory compliances are essential safeguards for consumers, not empty formalities, and failure to obtain them renders any offer of possession legally unsustainable.
On interest, the Commission held that 9% per annum is reasonable and in consonance with settled principles governing compensation in consumer disputes. It described the rate as a balanced approach that compensates the complainants for prolonged deprivation of their money without imposing a punitive burden on the builder. The Commission noted that the complainants had paid almost the entire sale consideration by April 2014 and had been deprived of both possession and use of the property for more than a decade.
Order
Appeal No. 131 of 2025 was dismissed with no order as to costs. The impugned order dated 17 January 2025 passed by District Consumer Disputes Redressal Commission-II, U.T., Chandigarh was upheld in its entirety. The builder is accordingly directed to refund ₹23,60,270/- to the complainants with interest at 9% per annum from the dates of respective deposits until actual realisation, and to pay ₹50,000/- as compensation and litigation expenses, within 60 days of receipt of the certified copy of the District Commission's order. All pending applications in the appeal stand disposed of. The complete record of CC/93/2022 is to be returned to District Commission-II, U.T., Chandigarh along with a certified copy of the State Commission's order.