Compensation for delay
Buying a home of their own is still a dream that eludes many Indians. Booking an apartment with a builder is the first step towards the fulfilment of this dream. Delays in delivery of apartments even after consumers have been paying EMIs regularly greatly inconveniences them as they have to also pay rent for their temporary shelter. Many people have been forced to seek le gal recourse against builders who make false promises and misrepresentations to them when the property is being booked and by executing builder-buyer agreement on terms and conditions that are not complied with. Of late, the courts of law have adopted a strict approach for such delays in handover of possession, terming them ‘deficiency in services’ by the builders. As in the recent case of Sangeeta Jain and two others (complainants) versus (i) Yamuna Expressway Industrial Development Authority (YEIDA) and two others; and (ii) Department of Stamp and Registration (opposite parties), the National Consumer Disputes Redressal Commission (NCDRC) ordered one of the opposite parties to pay compensation and granted various other reliefs to the complainants because of delay in handover of the possession of booked residential property to the buyers.
The case is about allottees of residential plots in the pre-launched residential plot scheme by YEIDA called Yamuna Expressway Industrial Development Authority Residential Plot Scheme 2009. The allottees or complainants, under the opted plan, were obligated to pay 30% of total premium upfront and the remainder in 16 half-yearly instalments, with interest at the rate of 12% pa. It was stated that the scheme provided for possession of the plots to be handed over to the allottees, upon payment of 75% of premium or after four years from date of issue of allotment letter, whichever ws later. The stamp charges, registration charges, etc, were to be borne by the allottees at the time of execution of the lease deed.
The complainants alleged that YEIDA sent ‘defaulter notices’ with threatening consequences to allottees despite them duly remitting the instalment amount. Aggrieved by such notices, a complainant filed an RTI application to which YEIDA responded stating that the lease plan was not received from the Planning Department and hence YEIDA was not in a position to give possession.
The Complainants further contended that YEIDA had the duty to approach the Planning Department for lease plan and get their approval which it failed perform. Moreover, YEIDA had not even initiated development activities and the status of the land remained what it was prior to allotment of plots. The Complainants had already made 75% of the payment and failed to get any response to subsequent letters from YEIDA.
YEIDA called upon one of the complainants to execute an agreement to lease (ATL) and informed them that the said agreement would mention allotment rates and not circle rates. YEIDA went on to make the execution of fresh ATL compulsory for the purpose of transfer of plots in favour of the complainants from the previous allottee. It was alleged that that YEIDA did so in absence of ownership, possession and without demarcation of plots and for the benefit of the Department of Stamp and Registration and Registry Office. Further, the stamp duty on the previous ATL was not adjusted and was charged at 5% of the circle rate and not on the original allotment rate.
NCDRC held YEIDA guilty of unfair trade practice stating that it should not have announced the scheme without having a clean title of the acquired land as it was common knowledge that farmers move to High Court and then to Supreme Court for enhanced compensation after approaching district/additional district judge.
YEIDA was directed to handover possession of the property to the complainants, within one year. In case that was not possible YEIDA had to provide alternative property to the allottees as per their choice. If neither of the given options were possible, then YEIDA was to pay back the amount to the complainants, along with stamp duty and interest at the rate of 12% per annum if desired by the complainants from the date of deposit till realisation.
YEIDA was also directed not to take interest for the remainder payments towards allotment of property to allottees except for four years till the complainants were in possession of their respective property. Further, YEIDA was debarred from sending any “defaulter notice” or forcing allottees to execute lease deeds without possession of land.
The author is a senior partner at Zeus Law, a corporate commercial law firm. One of its areas of specialisations is real estate transactional and litigation work. If you have any queries, email us at email@example.com and firstname.lastname@example.org.
MANY PEOPLE HAVE BEEN FORCED TO SEEK LEGAL RECOURSE AGAINST BUILDERS WHO MAKE FALSE PROMISES AND REPRESENTATIONS