17 years on, Chandigarh Consumer Commission orders HOUSEFED Punjab to refund flat buyers
Commission directs refund with 12% interest, along with compensation and litigation costs to five Banur housing scheme allottees, citing delay, cost escalation and deficiency in service
The State Consumer Disputes Redressal Commission, Chandigarh, has directed the State Federation of Co-operative House Building Societies Ltd (HOUSEFED), Punjab, to refund the entire amount along with 12% interest deposited for flats in a housing project launched 17 years ago to five applicants.
The Commission has also directed payment of compensation of Rs 75,000 for mental agony, harassment, and deficiency in service, along with Rs 35,000 as litigation expenses to each of them, to be paid within 45 days.
The order was passed while deciding appeals filed by applicants Amarjeet Singh Bali, Inder Mohan, Tripta Sood, Pawan Kumar, and Bharat Bhushan.
In their appeals, the applicants stated that they had invested their hard-earned money in the HOUSEFED project with the legitimate expectation of timely possession of flats/units at the agreed price; however, the respondent failed to deliver and continued to retain the funds.
They further submitted that the cost of flats was arbitrarily increased from about Rs 20.11 lakh to Rs 33.11 lakh, which they termed unjustified and an unfair trade practice, rendering the flats unaffordable and defeating the purpose of allotment.
Their complaints were earlier dismissed by the District Consumer Disputes Redressal Commission-I, UT Chandigarh, in a common order dated April 1, 2025.
The applicants had applied for allotment of flats under a Group Housing Scheme floated by HOUSEFED in 2009 under the name “Flats for General Public at Banur.” They had deposited substantial amounts, up to about 60% of the total sale consideration, as per the payment plan.
As per the brochure, although no specific date of possession was assured, the tentative timeline indicated delivery by the end of 2011, later extended to 2012. However, the opposite party failed to adhere to these timelines and issued allotment-cum-demand letters in November 2014, wherein the price of flats was substantially increased.
Aggrieved by the escalation and delay, the complainants did not accept the revised demands and sought refund of the amounts deposited. Some of them had already arranged alternate housing and availed home loans. Despite repeated requests, HOUSEFED failed to refund the amounts.
After hearing arguments, the State Commission set aside the District Commission’s order, observing that the opposite party failed to take any meaningful steps for several years and remained inactive till 2014. Thereafter, it suddenly increased the sale consideration by more than 60%, which was held to be arbitrary and unjustified.
HOUSEFED justified the increase, attributing it to higher land cost, interest rates, and rising construction and raw material costs.
However, the Commission rejected the justification, holding that once the opposite party failed to deliver possession within a reasonable period of two to three years from booking, it cannot shift the burden of its delay onto allottees.
