Are you wait­ing for pos­ses­sion of your flat?

A de­vel­oper is con­sid­ered ‘de­fi­cient in ser­vice’ if he fails to de­liver apart­ments on time or to re­fund de­posit money

HT Estates - - HTESTATES - Su­nil Tyagi

Abig chal­lenge faced by con­sumers in­vest­ing in real es­tate projects is get­ting timely pos­ses­sion from the builder/de­vel­oper. While de­lays in pos­ses­sion largely oc­cur on ac­count of cir­cum­stances be­yond the con­trol of the de­vel­oper/builder and cer­tain un­fore­seen force ma­jeure con­di­tions, some­times it also hap­pens due to lack of proper fi­nan­cial plan­ning and del­e­ga­tion of re­sources by the de­vel­oper.

The Na­tional Con­sumer Re­dres­sal Com­mis­sion, in its judg­ment of 2012, had de­cided on a re­vi­sion pe­ti­tion in­volv­ing the de­fi­cient ser­vices of the builder/de­vel­oper who de­spite be­ing held li­able to re­fund the con­sid­er­a­tion amount of the con­sumer, moved a re­vi­sion pe­ti­tion be­fore the Na­tional Com­mis­sion cit­ing un­founded in­fir­mi­ties in the or­ders passed by the dis­trict fo­rum and the Kar­nataka State Com­mis­sion, Ban­ga­lore.

In this case, with the in­tent of own­ing a flat, the con­sumer/ com­plainant had ap­proached the builder and en­tered into a sale and con­struc­tion agree­ment. At the in­stance of the builder, the com­plainant, af­ter ex­e­cu­tion of the agree­ment, had paid ap­prox­i­mately 50% of the con­sid­er­a­tion amount. How­ever, the builder failed to com­plete the con­struc­tion work on time. Even af­ter a lapse of three years from the date of the agree­ment, pos­ses­sion of the prop­erty was not handed over to the buyer. Fur­ther, no suf­fi­cient cause was given for the de­lay. This led to the con­sumer los­ing in­ter­est in buy­ing the prop­erty. Var­i­ous emails were sent by the con­sumer for seek­ing re­fund of the de­posit money from the builder. De­spite agree­ing to re­fund the money, the builder failed to do so. There­fore, the com­plainant filed a con­sumer com­plaint be­fore the dis­trict fo­rum.

The ques­tion was whether the builder’s act of keep­ing the con­sumer’s money for years (not re­fund­ing it nor de­liv­er­ing the apart­ment), amounted to de­fi­ciency in ser­vice.

The dis­trict fo­rum de­cided the com­plaint in favour of the con- sumer by hold­ing that there was a fail­ure on the part of the builder to dis­charge his obli­ga­tion by not com­plet­ing the con­struc­tion within the agreed time pe­riod and fur­ther fail­ing to re­fund the con­sid­er­a­tion amount.

Such fail­ure on the part of the builder/ de­vel­oper tan­ta­mounts to ‘de­fi­ciency in ser­vice’ and ‘un­fair trade prac­tice’. The builder was, there­fore, di­rected to re­fund the de­posit money with in­ter­est from the date in which the agree­ment was signed.

The dis­trict fo­rum also in­no­va­tively or­dered, that in the event of the builder not mak­ing the pay­ment to the con­sumer within 30 days from the date of the or­der, there shall be an es­ca­la­tion of in­ter­est and a fur­ther in­crease in rate of in­ter­est be­yond 60 days.

T h e b u i l d e r / d e ve l o p e r ap­pealed against this or­der of the dis­trict fo­rum, which was dis­missed at ad­mis­sion stage by the state com­mis­sion. The builder then filed a re­view pe­ti­tion be­fore the Na­tional Com­mis­sion, which was also dis­missed on the grounds that the de­tailed and rea­soned or­der of the state com­mis­sion did not suf­fer from any in­fir­mity or er­ro­neous ex­er­cise of ju­ris­dic­tion. The Na­tional Com­mis­sion not only up­held the or­der of two fora be­low but in ad­di­tion also im­posed puni­tive cost of R25,000 on the builder along with an in­ter­est at the rate of 9% per an­num in case of non­pay­ment of the cost .

Given the present mar­ket con­di­tions, timely de­liv­ery of pos­ses­sion of flats/apart­ments by the de­vel­oper con­tin­ues to be the chal­lenge faced by con­sumers. Such cases high­light the plight of the con­sumers and the hur­dles they face while in­vest­ing their hard earned money on prop­erty.

A de­vel­oper’s abil­ity to de­liver pos­ses­sion rights on time can make or mar his re­la­tion­ship with buy­ers

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