Buying an own home might be one of the biggest dreams for many people. One invests their hard-earned money to get the dream home for their family, but sometimes all these dream are shattered. In today’s world, every home buyer is afraid of being cheated by malicious builders, and cases of cheating, fraud and other incidents of like nature are rising in day-to-day life. Sometimes home-buyers don't even know that the property in which they have invested will be delivered to them at a stipulated time period, or be allotted to them in good condition.
In Simple terms, “delayed possession” means delay in delivery of possession of the property to the buyer within stipulated time period as specified in the Agreement. The Builder is liable to pay the compensation for his own fault to the buyerbut builder may not be liable to pay compensation when delays are caused by natural calamity or the delay is caused by the default of the buyer himself.
In this case, The National Consumer Disputes Redressal Commission (NCDRC) noted that possession was not given to buyers 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.
Aggrieved home buyers can seek the remedies under various statues such as:-
In case of breach of the agreement, i.e. Where the builders fails to meet the obligation set forth in the agreement, the aggrieved home buyer may move to civil court and may file a suit for recovery of money and also claim the interest thereon, as per the Civil procedure code,1908. Also, If the builders do not fulfill any obligation set forth in the agreement, or engages in unfair practice during the term of agreement, or try to change the agreed conditions of the agreement, the buyer can move to the civil court and ask for a refund of the amount that has already been paid to the builder.
If an aggrieved home buyer does not receive the possession of the property in which he has invested within a stipulated time period, or if there are delays in possession on the part of builder, or builder deliberately not ready to refund the paid amount, or if there is deficiency on the part of builder, he can file a criminal case against the builder for cheating Under section 420 of IPC, or criminal breach of trust U/S 405 IPC. Before initiating the criminal case, the aggrieved buyers have to send the notice to the builders.
Consumer protection Act established various redressal forums at different levels such as district forum, state commission and National Consumer Dispute Redressal Commission ‘NDRC’. These forums have been established with the jurisdiction being defined in terms of territory and monetary value.
An Aggrieved home buyer can file a complaint as per section 12 of the Act against the builders before the consumer forum regarding delay in possession or deficiency in service by the builders. Under the consumer forum, a complaint can be filed by any home buyer or group of consumer having common interest. The consumer forum can pass an order either directing to builder to refund the amount along with Interest and compensation for any loss or damages caused to home buyer due to a deficiency in service of builders. The Consumer forum provides faster relief to dissatisfied buyers than other authorities.
The Following are the steps an aggrieved home buyer should take to file a complaint against the builder in the concerned consumer court.
Deficiency of service According to Section 2(11) of consumer Protection Act 2019, “any sort of imperfection or defect in the feature, quality, amount, worth, authenticity, its capacity or potential, and standard which is obligatory to be maintained and regulated as per the laws and statutes in function or any agreement/contract claimed by the seller, with respect to the products and goods, is known as deficiency.
Willful and deliberate concealment of important information, omission or negligence of acts by seller which may lead to injury or loss to the consumer(s), also comes under the ambit of deficiency of service.
Any act(s), which a prudent seller is supposed to do or is supposed to omit, but deliberately does the contrast, such actions amount to 'deficiency of service'.
In this case, the hon’ble supreme court though this case included medical profession and medical negligence, within the scope of Consumer Protection Act. Consequently, empowering the aggrieved (due to medical negligence) to sue for damages for deficiency in services by a medical professional or medical institution, in a Civil Court.
In this case court held that “In case of failure of builder/developer to deliver possession of 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 such consumers and claiming same relief for all of them, would be maintainable under Section 12(1) (C) of consumer Protection Act.
In this case commission held that a builder was under a contractual obligation to complete the construction and handover possession of the apartment to the complainant within 39 months from the date of allotment, and the builder had failed to do so and more of the reasons given by the builder were justified. The commission directed the builder to complete the construction and handover 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.
In this case complainant had booked residential apartment with the unitech and agreement was executed between buyer and the builder. Builder was required to deliver the possession of the flat to the complainant within 36 month from the date of the buyer Agreement which he failed to do so. 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.
GuptaIn this case the Honorable Supreme Court held that when a person hires the services of a builder, or a contractor, for the construction of a house or a flat and the same is for a consideration, it is a service as defined by Section-2 (o) of the Consumer Protection Act, 1986. An inordinate delay in terms of handing over an apartment’s possession equals to deficiency of service.
Before the passing of this Act, there was no specific law which provided the punishment, or specific provision in the case of delays in possession of property by the builder/developer. This Act considered to be special law which deals with the matter of the real sector and was passed by the parliament with the objective to Redressing the grievances of the buyers against the builder in case of default of the obligation set forth in the agreement. This is in line with the tremendous growing demand of the real estate sector to streamline the industry and balance the interest of home buyers and builders. If the builder fails to provide the possession of property in a stipulated time period in accordance with the agreed terms and conditions, RERA will provide the buyer an efficacious remedy to refund the amount of property in which he has invested the money along with the interest that is set forth by the states. The rates of interest in the furtherance of the above are prescribed under the rules of the Real Estate (Regulation & Development) Act, 2016, which vary from state to state. Under this Act, the concerned authority may impose a penalty against the builders that can be extended up to the 5% of the estimated cost of the real project as determined by the concerned real estate regulation authority.
This Act has been enacted by the parliament with the objective of timely recovery of money and revival of sick companies. Under this Act, the procedure of adjudication shall be done by the National Company Law Tribunal (NCLT). If a debtor goes bankrupt and commits defaults, then a financial creditor or the debtor itself may approach to the NCLT to submit an application to initiate the CIRP (Corporate Insolvency Resolution Process) against the defaulter under Section 7 of the Act. IBC is totally a time-bound process.
Only when there is the arbitration clause in the agreement between the buyer and builder, the homebuyer can invoke the provision of arbitration And Conciliation Act, 1996. The Arbitration proceedings are governed by the Arbitration and Conciliation Act, 1996. The procedure under this Act is less time consuming as compared to the civil remedy of getting the award. In Arbitration proceedings, the arbitrator is the only one to determine whether the builder has deviated from the agreement or not, and he will pass the award as he deems fit. An Arbitrator will determine the amount of Compensation in the case of default on the part of builder.
According to this Act, where the builder has misused his dominant position leading to disadvantage to the buyer, he can file a complaint before the consumer Commission of India against the builder in case of abuse of dominant position. When the builder found to be guilty after due investigation, CIC may direct the builder to pay the fine.
Arifur Rahman Khan and Aleya Sultana vs. DLF Southern Homes Pvt Ltd In this case where 339 flats has complained against delayed handing over possession court held that buyer is entitle to get the compensation for delayed handing over compensation and court also observed that “A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service”
[1]Consumer case No. 226 of 2015) NCDRC
[2]Consumer Protection Act, 1986 No.68, Act of parliament, 1986
[3] 1996 AIR 550
[4] (02.05.2016- NCDRC) MANU/CF/0497/2016
[5](23.08.2016-NCDRC) MANU/CF/0334/2016
[6] Consumer Case No. 510 of 2015(NCDRC
[7] (1994) 1 SCC 243
[8] Section 18 of Real Estate and (regulation and Development) Act, 2016
[9]Section 19(1) of Real Estate and (regulation and Development) Act, 2016
[10]Section 19(2) of Real Estate and (regulation and Development) Act, 2016
[11]2020SCC online 667SC
By Admin
By Admin
By Admin
By Admin
By Admin
By Admin
By Admin
By Admin
By Admin
By Admin
Copyright 2023 Lawshrine.