Punjab Housefed fined for not refunding payment for flat

The District Consumer Disputes Redressal Commission has penalised The Punjab State Federation of Cooperative House Building Society Ltd., Chandigarh, for not refunding the amount to a Mohali resident, who could not take possession of a flat following increase in rate.

Joginder Lal, a 53-year-old Mohali resident, filed a case against the managing director principal executive office (PEO) The Punjab State Federation of Cooperative House Building Society Ltd., Chandigarh. Lal said that he applied for the allotment of flat with the house building society and vide allotment letter dated June 23, 2009, he was allotted category-Il flat in the group housing society for a total sale consideration of ₹14.92 lakh. Out of this amount, he had already paid ₹8.98 lakh.

In October 2014, he received a letter informing him that he was allotted a flat on the second floor, category-Il, in the above scheme. He was asked to make the balance outstanding payment of ₹15,76,119, though earlier the amount was ₹5,97,000.

Lal said that the society fixed the final price of the flat at ₹24.46 lakh, with increase of ₹9.54 lakh from the tentative price of ₹14.92 lakh. As he was unable to pay the increased amount asked by the society, Lal showed his inability and requested for a refund of the amount but to no avail.

Alleging that by not refunding the deposited amount, the society has indulged in unfair trade practice, he moved the Commission.

The opposite party in its reply stated that the complainant had deliberately not taken the possession as he did not have adequate funds. Even the request for the refund of the deposited amount was made after 5 years when the society had already offered the possession. Before that, the complainant had never raised any kind of grievance.

Regarding the increase in cost, the society said that the complainant was well aware of the terms and conditions that the cost of the flat is tentative and final price shall be determined at the time of handing over possession of the flat and accordingly it was fixed/worked out as ₹24.46 lakh and the complainant was requested vide several letters to make the payment but he failed to do so.

The commission stated that the act of the opposition party, in collecting money from the complainant prior to obtaining necessary permissions from the competent authorities and thereafter forfeiting the hard earned money of the complainant, amounts to deficiency in service and unfair trade practice.

It directed it to refund ₹9,00,500 with interest @9% per annum from the date of deposit till onwards. Upon receiving the entire amount, the ownership of the flat shall vest with the opposition parties.

Also, the opposition party is directed to pay ₹40,000 as compensation for causing mental agony, harassment to the complainant, and litigation cost.