Chandigarh Panel Awards Compensation to Homebuyers in Long-Delayed Housing Case

In a significant ruling, the State Consumer Disputes Redressal Commission, Chandigarh, has directed the State Federation of Cooperative House Building Societies Limited (HOUSEFED), Punjab, to refund the entire amount deposited by five applicants for a housing project launched 17 years ago. The commission has ordered that the refund be made along with 12 percent annual interest. In addition to the refund, the commission has instructed HOUSEFED to pay ₹75,000 to each applicant as compensation for mental harassment, unfair treatment, and deficiency in service. A further ₹35,000 per applicant has been awarded towards litigation expenses. The payments are to be made within 45 days. The order was issued while disposing of appeals filed by Amarjit Singh Bali, Inder Mohan, Tripta Sood, Pawan Kumar, and Bharat Bhushan. The complainants informed the commission that they were unfortunate homebuyers who had been entangled in litigation for years without receiving either possession of flats or a refund of their deposited money. They had invested their savings in a group housing scheme titled “Flats for General Public at Banur,” launched by HOUSEFED in 2009, with the expectation of timely possession at the agreed price. According to the applicants, they had deposited nearly 60 percent of the total cost under the payment plan. While no fixed possession date was mentioned in the brochure, the expected timeline was projected around the end of 2011 or, at the latest, by 2012. However, the project failed to meet these timelines. The situation worsened in November 2014 when HOUSEFED issued an allotment-cum-demand letter, significantly increasing the price of flats from approximately ₹20.11 lakh to ₹33.11 lakh, marking a steep rise of about 62 percent. The applicants argued that the hike was arbitrary and constituted an unfair trade practice, making the flats unaffordable and defeating the purpose of the scheme. Earlier, their complaints had been dismissed by the District Consumer Disputes Redressal Commission-I, UT Chandigarh, through a common order dated April 1, 2025. Challenging that decision, the applicants approached the state commission. After hearing all arguments, the state commission set aside the district commission’s order. It observed that HOUSEFED remained inactive for several years and failed to take meaningful steps until 2014. The sudden and substantial increase in price, coupled with delays in possession, was deemed unjustified and arbitrary. HOUSEFED defended the price escalation by citing provisions in the brochure and allotment terms, stating that the increase was due to rising land costs, interest rates, construction expenses, and raw material prices. However, the commission rejected this argument, stating that the organisation could not pass on the burden of its own delays to the allottees. Consequently, the commission ordered the refund of the deposited amount with 12 percent annual interest and directed payment of compensation and legal costs to each complainant.