Builder kept buyer waiting 31 years for 11 commercial units, ordered to pay Rs 27 lakh

4 min readNew DelhiJun 26, 2026 05:30 PM IST

The commission held that the builder had failed to fulfil its contractual obligations of registering the agreement and handing over possession within the promised period. (AI-generated image)

The Maharashtra State Consumer Disputes Redressal Commission has directed a builder to refund Rs 25 lakh and pay Rs 2 lakh compensation to a businessman who waited over three decades for possession of 11 commercial units that were never constructed.

Presiding member Poonam V Maharshi and member Dr Nisha A Chavan held the builder liable for deficiency in service and unfair trade practice. The commission also directed the builder to pay Rs 25,000 as litigation expenses to the complainant.

“The Opposite Party failed to perform their contractual obligation of registering the agreement and handing over possession of the subject premises within the promised period, nor they refunded the amount paid by the complainant amounting to deficiency in service and unfair trade practice,” the order dated June 24 read.

According to the complainant, he had booked 11 commercial units in the opposite party’s commercial project in 1995 for Rs 25 lakh to expand his business and earn his livelihood through self-employment. He stated that despite receiving the consideration amount, the builder failed to complete the project and hand over possession of the premises within the agreed period.

The builder failed to appear before the commission despite being served notice, and the matter proceeded ex parte. Before examining the merits, the commission held that the complainant qualified as a “consumer” under the Consumer Protection Act, noting that the units were intended for the complainant’s own business as a sole proprietor and not for resale or speculative purposes.

“According to the complainant, the said units were never intended to be purchased for resale, investment or speculative commercial venture, but solely for carrying on his own business and earning his livelihood through self-employment. the pleadings and documentary evidence adduced by the complainant have remained unchallenged and unrebutted. Accordingly, it is held that the complainant falls within the definition of “consumer” under Consumer Protection Act,” the order read.

Unfair trade practice

The commission found that the allotment letter acknowledged receipt of the payments and also provided that the builder would refund the amount with 12 per cent interest in the event of cancellation.

It noted that the evidence filed on record, supported by documentary evidence, had gone unchallenged.

The builder had failed to fulfil its contractual obligations of registering the agreement and handing over possession within the promised period, amounting to deficiency in service and unfair trade practice.

Rs 27 lakh relief

Taking note of the complainant’s submission that the building had still not been constructed and that there was no certainty regarding possession, the commission concluded that refund was the appropriate relief. It, therefore, directed the builder to refund the amount of Rs 25 lakh along with interest at the rate of 12 per cent per annum from the date of respective payment till realisation.

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“Considering the facts and circumstances of the present case as the Opposite Party retained the complainant’s money for a prolonged period without providing the promised premises. We direct the opposite party to refund the amount of Rs 25,00,000/- along with interest @12 % pa from the date of respective payment till realisation along with compensation and cost,” the order read. It further directed the builder to pay Rs 2 lakh towards compensation for the mental agony and harassment.

Significance of judgment

The ruling emphasises that builders cannot indefinitely retain purchasers’ money without delivering the promised property. The decision is also significant for reaffirming that a person purchasing commercial premises for carrying on his own business and earning a livelihood through self-employment continues to qualify as a “consumer” under the Consumer Protection Act.

Aggrieved consumers may contact the consumer helpline in their respective states (Maharashtra helpline: 1800-2222-62) or call the National Consumer Helpline at 1915 for assistance.

Ashish Shaji is a Senior Sub-Editor at The Indian Express, where he specializes in legal journalism. Combining a formal education in law with years of editorial experience, Ashish provides authoritative coverage and nuanced analysis of court developments and landmark judicial decisions for a national audience.

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