Buy­ers have right to in­for­ma­tion on projects

A builder can­not with­hold in­for­ma­tion from home­buy­ers on project lo­ca­tion, area spec­i­fi­ca­tions and plot num­ber if he has been paid for the prop­erty

HT Estates - - HTESTATES - Su­nil Tyagi

In the usual course of at­tract­ing in­vestors/ buy­ers to a project, de­vel­op­ers tend to hold on to im­por­tant in­for­ma­tion and do not give away cru­cial in­for­ma­tion re­gard­ing the project, land ap­provals etc. While the buy­ers get swayed by the ad­ver­tise­ments for a given project, they do not do ad­e­quate due dili­gence be­fore strik­ing a deal.

Of­ten, de­vel­op­ers do not pro­vide de­tails which the buy­ers are right­fully en­ti­tled to have be­fore in­vest­ing/or con­tin­u­ing their in­vest­ment in a project. The Na­tional Con­sumer Re­dres­sal Com­mis­sion in a 2014 judg­ment aptly de­cided that such non-dis­clo­sure and with­hold­ing in­for­ma­tion amounted to un­fair trade prac­tice.

In this case, the con­sumer/ com­plainant had booked a plot mea­sur­ing 200 square yards in a project sought to be de­vel­oped by the builder/de­vel­oper/op­po­site party. The con­sumer duly paid a book­ing amount of ₹ 2 lakh for the same and also re­ceived a re­ceipt from the builder as ac­knowl­edge­ment. How­ever, at the time of the book­ing, the de­vel­oper did not quote and dis­close/re­veal the ex­act plot which was al­lot­ted to the con­sumer, nor did the builder quote the ex­act price to be paid to­wards the plot and also with­held in­for­ma­tion re­gard­ing the ex­act lo­ca­tion of the plot.

There­after, the builder started send­ing let­ters to the con­sumer de­mand­ing more money with­out pro­vid­ing in­for­ma­tion re­gard­ing lo­ca­tion/area and price of plot. The con­sumer replied to ev­ery let­ter, and also showed his will­ing­ness to pay the money on the con­di­tion that the builder dis­closed the rel­e­vant ma­te­rial in­for­ma­tion re­gard­ing the plot, such as the ex­act num­ber of plot be­ing al­lot­ted, the ba­sic price of the plot and the lo­ca­tion of the plot. In­stead of an­swer­ing the rel­e­vant queries of the buyer/ con­sumer, the builder can­celled his book­ing and re­turned the book­ing amount. Ag­grieved by the ar­bi­trary ac­tions of the builder, the buyer filed a con­sumer com­plaint be­fore the dis­trict fo­rum.

The is­sue raised be­fore the fo­rum was whether the con­sumer was en­ti­tled to al­lot­ment of plot of 200 square yards in the project be­ing de­vel­oped by the builder. An­other rel­e­vant is­sue raised was whether the buyer was en­ti­tled to be con­veyed ma­te­rial in­for­ma­tion re­gard­ing num­ber, price and lo­ca­tion of plot booked in the project.

The dis­trict fo­rum, af­ter hear­ing the par­ties at length, granted re­lief in favour of the buyer. The Fo­rum di­rected the builder to al­lot a plot ad­mea­sur­ing 200 square yards to the buyer in the same project in which the book­ing was done and also dis­close the ma­te­rial in­for­ma­tion re­gard­ing the plot to the buyer.

In­stead of ac­cept­ing the or­der of the dis­trict fo­rum, the builder filed an ap­peal be­fore the state com­mis­sion. The com­mis­sion, while dis­miss­ing the ap­peal of the builder, ob­served that the act of the builder of not dis­clos­ing such ma­te­rial in­for­ma­tion, and can­celling the book­ing of buyer de­spite the lat­ter be­ing ready and will­ing to pay the same, amounted to de­fi­ciency in ser­vice and re­strained from in­ter­fer­ing with the or­der passed by the dis­trict fo­rum.

The Na­tional Com­mis­sion in the re­vi­sion pe­ti­tion filed by the de­vel­oper/com­pany up­held the or­der passed by the dis­trict fo­rum and state com­mis­sion. It ob­served that if the builder ac­cepts the reg­is­tra­tion amount from the con­sumer, with­out dis­clos­ing the area, lo­ca­tion and num­ber of the plot etc, it amounts to a ‘de­cep­tive prac­tice,’ which falls within the mean­ing of ‘un­fair trade prac­tice’. It fur­ther ob­served that such con­duct of the builder/pe­ti­tioner and al­lur­ing of in­no­cent public to part with their hard earned money, with­out giv­ing them any de­tails as to for what pur­pose the hard earned money was taken, amounts to an act of mis­rep­re­sen­ta­tion. Fol­low­ing this the Na­tional Com­mis­sion im­posed a puni­tive dam­age on the builder for drag­ging the buyer to con­test the case be­fore var­i­ous fo­rums and fur­ther or­dered that fail­ure to pay the cost within the timeline fixed would at­tract in­ter­est at 9%.

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