REMEDIES AVAILABLE TO BUYER IN MATTERS OF DEFAULT IN DELIVERY OF POSSESSION BY THE BUILDER
The biggest fear that any home buyer has is whether the property he invested in will be delivered on time or will the quality he is paying for, is worth it. Though Real Estate Law is going to make things convenient for aggrieved home buyers, one can also consider taking this legal course against the service provider, if you are highly unsatisfied.Home buyers cannot be made to wait indefinitely for possession of flats booked by them, the apex consumer commission has said as it asked a private builder to refund the amount paid by its customers. In a recent case, The National Consumer Disputes Redressal Commission (NCDRC) noted that possession was not given even after five years and asked New Delhi-based Adel Landmarks Limited to refund over Rs 66 lakh to five customers who were allotted flats in their project in Gurgaon in 2012.[1]
“The firm has chosen not to come forward to tell this commission as to why it has failed to deliver possession to them, and by which date it expects to deliver the possession, the buyers in my opinion are entitled to refund of the amount paid by them to the opposite party (firm), along with appropriate compensation,” the bench headed by its presiding member Justice V K Jain said.
A home buyer who has suffered due to the default of buyer can seek following possible remedies-
FILING A SUIT IN CIVIL COURT
On the off chance that the developer has ruptured the conditions of the sales agreement, the home purchaser can approach the civil court and file the petition for damages caused or even the refund of the sum alongside the interest under Code of Civil Procedure, 1908. This is likewise relevant if the developer is utilizing out of line implies or conferring unsuitable practices at the season of obliging with the manufacturer purchaser understanding. A purchaser can assert the recuperation of the whole sum, paid by him. In any case, a civil case takes quite a while when contrasted with different recourses and even the court charge must be paid comparable to the sum guaranteed. For a case measure of up to Rs 2 crore, district courts can engage the request while for higher cases, High Courts have the pecuniary jurisdiction. This is elite of the legal counselor’s expense and court charge.
CONSUMER COURT
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[1] Cosmocity Flat Buyers Wefare Society& 31 Ors v. Adel Landmarks ltd (Consumer case No. 226 of 2015) NCDRC
According to the Consumer Protection Act, 1986, a home buyer can file a complaint against the builder within two years from the date of dispute at the Consumer Forum. The complaint can be the deficiency in the services on the builder’s part, as provided in the builders-buyers agreement. However, the complaint can be filed only by the consumer and a buyer is considered to be a consumer only when he buys the house for his end-use and not for the commercial purposes.
Who is a complainant?
“Complainant” in Section 2(1)(b) as also Section 12 of the Act[2] which provides for the manner in which the complaint shall be made. The said two provisions are reproduced as under-
“2(1)(b) “complainant” means–
(i) a consumer; or
(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or under any other law for the time being in force; or
(iii) the Central Government or any State Government;
(iv) one or more consumers, where there are numerous consumers having the same interest;
(v) in case of death of a consumer, his legal heir or representative; who or which makes a complaint;
And, section 12 which tells manner in which complaint shall be made- (1) A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with a District Forum by–
(a) the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided;
(b) any recognised consumer association whether the consumer to whom the goods sold or delivered or agreed to be sold or delivered or service provided or agreed to be provided is a member of such association or not;
(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or
(d) the Central Government or the State Government, as the case may be, either in its individual capacity or as a representative of interests of the consumers in general.”
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[2]The Consumer Protection Act, 1986, No. 68, Act of Parliament, 1986(India).
Further section 12(1)(c) makes it clear that more than one consumer can file a consumer complaint where there are numerous consumers having the same interest but this can be done with the permission of the Consumer Forum provided the complaint has been filed on behalf of or for the benefit of all the consumers so interested.As per Section 11 of the Act, the pecuniary jurisdiction of the District Forum to entertain the complaint is restricted to the value of the goods or services and the compensation up to the extent of rupees twenty lakh, Section 17 of the Act provides that State Commission shall have pecuniary jurisdiction to entertain the complaint where the value of the goods or services and the compensation exceeds rupees twenty lakh but it does not exceed rupees one crore. Similarly Section 21 provides that National Commission shall have pecuniary jurisdiction to directly entertain the consumer complaint if the value of the goods or services and the compensation exceeds rupees one crore.
The failure of the builder/ developer to deliver possession of the flat / plot sold to them and a complaint filed for the benefit of or on behalf of all such consumers and claiming same relief for all of them, would be maintainable under Section 12(1)(c) of Consumer Protection Act.[3]
In one recent case, the complainant booked a residential apartment with granite grate properties. In furtherance to booking a residential apartment with the Builder, the Builder issued an allotment letter dated June 28, 2010 to the Complainant. Additionally, the parties entered into an Apartment Buyers Agreement on June 29, 2010, according to which, the Builder was to endeavor to complete the construction within 39 months from the date of allotment, i.e. the possession was to be delivered by September 27, 2013. The possession however was not offered to the Complainant by the said date and he was informed that the possession would not be given before July 2014. The aforesaid deadline was later extended till December 31, 2014. Being aggrieved by the said delay, the Complainant approached the Commission against the Builder.
The Commission held that the Builder was under a contractual obligation to complete the construction and hand over possession of the apartments to the Complainant within 39 months from the date of allotment, and the Builder had failed to do so and none of the reasons given by the Builder were justified.The Commission directed the Builder to complete the construction and hand over possession before 31.01.2017, failing which, they were to pay compensation in the form of simple interest @ 10% per annum from the committed date of possession till the date possession is offered to the apartment owner. [4]
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[3]Developers Township Property Owners Welfare Society vs. Jaiprakash Associates Limited (02.05.2016 – NCDRC) : MANU/CF/0497/2016.
[4] Pradeep Narula and Ors. vs. Granite Gate Properties Pvt. Ltd. and Ors. (23.08.2016 – NCDRC) : MANU/CF/0334/2016.
| S.No | CASE | FACTS | JUDGEMENT |
| 1. | Jitendra Balani v. Unitech
Consumer Case No. 510 of 2015(NCDRC) |
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Commission found that none of the reasons given by the Builder for the delay, such as non-availability of construction material or labour, were tenable. The Builder was directed to deliver possession of the flats to the Complainants and pay compensation at 12% simple interest as compensation from the time the possession was due under the Buyer’s Agreement till the date possession was granted. In relation with the Complainants who no longer wanted the flats, the Builder was directed to refund the money paid by them and also pay interest at 18% from the date of payment.
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| 2. | Puneet Malhotra v. Parvsnath Developers
Consumer Complaint No. 232 OF 2014 (NCDRC) |
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The Commission held that compensation mentioned under the Agreement shall be payable only if the possession of the property was accepted by the Complainant, despite the delay. The Builder was ordered to refund the amount deposited by the Complainant, along with interest @ 18% per annum from the date the deposit was made till the date on which the refund was made. Since the rate of interest granted included compensation, no separate compensation or litigation costs were granted. |
| 3. | Kaushal Rana v. DLF Commercial Complexes
Consumer Complaint No. 88 of 2012 |
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The Commission found that no construction had begun and the refund of money along with interest had been refused by the Builder without any reason. The commission directed the Builder to refund the entire deposited amount with interest @ 18% p.a., from 20.02.2008, till realization. It also imposed costs of RupeesTwo Lakh towards harassment, mental agony and litigation charges. This was payable within 90 days from the date the Order, failing which interest would be charged on it at 18% p.a., till realization. |
| 4. | Sandeep Lohia and Ors v. Parsvnath Developers
Complaint Case No.34/10, Dated 20thDecember 2014 |
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The Commission held that the Builder has clearly committed a default. It had been more than 7 years since Flat Buyer Agreement was executed and possession of the Flats had still not been handed over to the Complainants. The Commission held that the Builder’s actions amounted to “unfair trade practices”.The Commission directed the Builder to refund the principal amount with interest @ 18% perannum from the date of its deposit till date of this Order and to pay compensation of Rs. 4,50,000 to each of the Complainants for causing harassment and mental agony. The said amounts were payable within a period of 30 days from the date of the Order failing which the Builder was liable to pay interest @ 24% p.a. on the amounts. |
| 5. | Nidhi Kumar v. Supertech Limited
Complaint No. 94/09 Dated 17th October, 2014
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The Commission held that the Builder had admitted that the possession of the flat was to be delivered before March 2009. However, construction of the project stood left mid-way when the Complaint was filed and even during course of trial the Builder had not offered to deliver possession. The failure of the Builder to hand over possession amounted to an ‘unfair trade practice’.The Commission directed the Builder to refund of money paid with interest @18% per annum on the money advanced by the Complainants from the date of deposit till the date of its realization. |