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Delhi HC refuses relief to man given 182-yr term for defrauding 344 homebuyers
The Delhi High Court has refused to grant relief to a 75-year-old former director of a property firm facing an extraordinary 182-year prison sentence for defrauding 344 homebuyers, upholding the authority of a consumer forum to impose multiple consecutive jail terms in a landmark case.
In a verdict delivered on May 30 and released Monday, Justice Neena Bansal Krishna dismissed the plea of Rajender Mittal, a director of Tirupati Builders Pvt Ltd, who had sought modification of the sentence imposed by a district consumer court. The court in 1995 had convicted Mittal for failing to refund booking amounts collected from buyers promised plots in a proposed residential colony—Tirupati Township—on Delhi's Baghpat Road.
The Tirupati Township Plot Holders Association, representing over 300 homebuyers, accused Mittal and his co-director Rakesh Kumar Sharma of collecting ₹90.79 lakh for plots that were never delivered. On March 13, 1995, the district consumer forum ruled in the buyers' favour, directing the directors to refund the money with 18% annual interest, along with ₹20,000 in compensation and ₹500 in litigation costs to each complainant.
The Supreme Court upheld the order in July 2011.
The two directors, however, failed to comply with the refund order. In February 1998, the consumer forum invoked Section 27 of the Consumer Protection Act, 1986, which allows imprisonment for up to three years for non-compliance with forum orders. The forum sentenced Mittal and Sharma to one year of simple imprisonment in 20 complaints and six months in each of the remaining 324. Crucially, it directed the sentences to run consecutively—resulting in a combined term of 182 years. The sentence was suspended for three months to give the duo a final chance to comply. In 2003, the Delhi state consumer commission upheld this decision.
Praying for his immediate release from prison, Mittal on December 1, 2020, challenged the sentence in the high court, arguing that since all complaints stemmed from the same transaction and were decided through a common order, the punishments should run concurrently. That would have limited his prison term to one year. He called the forum's decision 'excessive, arbitrary and illegal,' citing that the forum could not go beyond the maximum three-year sentence outlined in the Consumer Protection Act.
Mittal also pointed to his incarceration in a separate criminal case. Arrested in 2016 after being declared a proclaimed offender, he was convicted in 2019 for cheating, criminal conspiracy, and criminal breach of trust. He was sentenced to five years for cheating, three years for breach of trust, and two years for conspiracy, with sentences running concurrently. He claimed to have already served over seven years in that case.
But the high court was unmoved. Representing the Centre, advocate Udit Vaghela argued that the 1995 consumer forum order had attained finality after the Supreme Court's 2011 ruling and could not be reopened.
Justice Krishna rejected Mittal's petition, ruling that the sentences were lawful and enforceable under Section 27, and since they were imposed for default of compliance rather than for criminal wrongdoing, they could not be made to run concurrently. She underlined that the punishment was not punitive, but a civil measure aimed at compelling compliance with the forum's directions.
'These sentences being for default of fine, cannot under the law be directed to run concurrently as it is not punitive in nature but only intended to ensure compliance,' held the judge, emphasising that no direction as sought by the petitioner could be issued under such circumstances.
However, the court left a narrow window open: Mittal, the court said, was free to approach the district forum afresh on grounds of financial incapacity and seek a modified sentence there.
