Failure To Deliver Possession Of Plot Constitutes "Continuous Wrong" Giving Rise To Recurrent Cause Of Action Under Consumer Protection Act: Delhi State Commission

"It is a settled legal proposition that failure to give possession of flat is continuous wrong and constitutes a recurrent cause of action and as long as the possession is not delivered to the buyers, they have every cause, grievance and right to approach the consumer courts." Delhi State Consumer Disputes Redressal Commission, in a ruling dated September 21, 2026, held that a developer's failure to deliver possession of a plot within the contractually stipulated period constitutes a "continuous wrong," thereby ensuring that a complaint is not barred by the limitation period under Section 24A of the Consumer Protection Act, 1986.

A bench comprising Justice Sangita Dhingra Sehgal (President) and Ms. Bimla Kumari (Member) observed that as long as possession remains undelivered, the aggrieved buyer retains a recurring right to approach consumer fora.

The complainant, Mr. Ranbir Singh, had booked a residential plot measuring 350 sq. yds. in the "TDI City" project in Sonepat in 2006, paying a total sum of Rs. 37,76,700 towards the basic sale consideration and External Development Charges. Despite the passage of years and subsequent requests, including a formal letter in 2015 and a legal notice, the developer failed to hand over possession. The complainant filed the present consumer complaint in 2016, alleging deficiency of service and unfair trade practices by the developer.

The primary questions before the Commission were whether the complainant qualified as a 'consumer' under Section 2(1)(d) of the Act, whether the Commission possessed the requisite territorial jurisdiction, whether the complaint was barred by the two-year limitation period, and whether the developer’s failure to deliver the plot amounted to a deficiency in service.

Establishing Consumer Status

Addressing the contention that the complainant intended to purchase the plot for commercial gain, the Commission held that the burden of proof rests entirely upon the developer to establish that the purchase was for resale or commercial purposes. Citing the National Commission’s precedent in Narinder Kumar Bairwal vs. Ramprastha Promoters, the bench noted that in the absence of documentary evidence to support the developer's claim, the complainant must be treated as a 'consumer' as defined under the Act.

Court Confirms Territorial Jurisdiction

The Commission rejected the developer’s argument regarding a lack of territorial jurisdiction by referencing Section 17(2)(a) of the Act. Relying on Rohit Srivastava v. Paramount Villas Pvt. Ltd., the bench held that since the developer’s registered office was located in Delhi, the Commission was empowered to entertain the complaint, as the developer "carries on business" within the territorial limits of the State Commission.

Limitation and Continuous Wrong

The Commission emphasized that the limitation period under Section 24A is not a bar in cases of non-delivery of possession. By applying the principle laid down in Mehnga Singh Khera vs. Unitech Ltd., the bench clarified that the failure to deliver possession is a "recurrent cause of action." The Commission held that because the grievance remained unaddressed following the complainant’s legal notice in 2015, the complaint filed in 2016 was well within the legal threshold.

"A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency."

Addressing Deficiency in Service

The Commission ruled that the developer’s failure to fulfill its contractual obligations, coupled with the lack of evidence justifying the delay as being "beyond control," constituted a clear deficiency in service. The bench stated that flat buyers make legitimate life assessments based on the availability of the property, and such expectations are shattered when a developer defaults for years. The Commission reaffirmed that the jurisdiction of consumer fora extends to directing developers to remove such deficiencies, which includes awarding compensation as restitution.

Given that the complainant refused the alternative plot offered by the developer during settlement proceedings, the Commission allowed the complaint. It directed the developer to refund the entire deposited amount of Rs. 37,76,700 with interest at 6% per annum, provided the payment is made in installments by March 21, 2027. Failure to adhere to this timeline will trigger an increased interest rate of 9% per annum calculated from the date of filing the complaint. Furthermore, the Commission awarded Rs. 50,000 as compensation for mental agony and an additional Rs. 50,000 towards litigation costs.

Date of Decision: 21 September 2026