News Reports on cases involving Builders.

We have collected about 20 newspaper reports -pertaining to cases involving Builders- from the website of the leading news-papers of the country. These reports confirm that the Judiciary is very tough on the builders when it is proved that the builder is involved in violation of laws of building construction. On appeal in Higher Court, builder never gets any relief but there are instances where compensation is enhanced.

Judgment in our case with builder at DKDCDR Forum proves

  • 1.Violation of MCC's Building Licence,
  • 2.Failed to provide registered DoD,
  • 3.Illegally retained 3.34% undivided share of land for himself.
  • 4.Illegal collection of Service Tax & VAT,
  • 5.Illegal occupation of Common Areas in terrace & Car-park area,
  • 6.Failed to provide clear marketable title,
  • 7.Failed to form Association,
  • 8.Unfair trade practice,

You will oberve that above mention points were dealt in the past judgment of various court.

Sr.No News Paper Report -HEADLINES News Paper Date
24 DLF judgement fallout: How homebuyers can benefit from CCI verdict Economic Times Aug2011
23 CREDAI opposes proposal to form regulator for realty sector Economic times Aug2011
22 Firm told to refund Rs. 12.77 lakh paid for apartment The Hindu 23 August, 2011
21 Pune's housing society goes online 7 Jan, 2010
20 Builder's beware Nov 2010
19 The Builder is obliged to give the Occupation Certificate 03-12-2009
18 Consumers told to stand up for their rights The Hindu 17-1-2010
17 Builders must fulfill promises in brochure: HC Times of India 23-3-2006
16 Show no Mercy to Encroachers-SC DECCAN HERALD 6-12-2009
15 Bare all or lose all, HC tells builders Times of India 25-12010
14 Consumer court orders erring builder to repay deposit Times of India 8-5-2003
13 Builder ordered to refund deposit with interest The Hindu 12-3-2004
12 Builder directed to pay interest for delayed delivery of apartment The Hindu 8-12-2006
11 Flat builder ordered to pay for repairs The Hindu 28-4-2003
10 NBW issued against builder for disobeying consumer forum Times of India 10-10- 2009
9 HC stays builder's bail in fraud case Indian Express 16-5- 2009
8 High Court : Anticipatory bail plea rejected in Natu case Indian Express 04-7- 2009
7 Builder case bail plea rejected Indian Express March 9
6 Builders must come clean on rights: HC Times of India 25-1-2010
5 Blacklist builders flouting plan: HC Times of India 5-1-2010
4 HC orders demolition of unauthorised buildings Times of India 16-11-2002
3 Builders, flat-owners lock horns over fire safety norms Times of India 24 -6- 2006
2 Flat owners, know your rights Times of India 12 -3- 2005
1 Developer shenanigans Times of India 18 -12- 2004

DLF judgement fallout: How homebuyers can benefit from CCI verdict

The Competition Commission of India (CCI) has imposed a penalty of around 600 crore on realty major DLF for abusing its dominant market position. Levied by the anti-monopoly watchdog , the penalty was imposed after DLF was found guilty of violating the Competition Act, 2002. The fine amounts to 7% of the company's average annual turnover in the past three years.

Following complaints in May last year by several people who had booked flats in a DLF project, the CCI had referred the matter for probe by the Director General (Investigations). According to one such complaint, DLF had promised to complete Belaire, its residential project in Gurgaon, in 2009, but buyers are yet to get possession of their apartments.

In addition, DLF has increased the number of floors in the apartment complex from the original figure given to buyers. This led to the number of apartments in Belaire shooting from 384 to 564. DLF has been penalised for an offence that is common among the hundreds of other builders in the country.

"This is a significant intervention by the Competition Commission and if upheld, it gives a powerful tool to the average property buyer against the developer. A buyer may refuse to sign the agreement quoting this judgement, saying that it is anti-competitive and, therefore, unacceptable to him," says Farhad Sorabjee, partner at law firm JSA Law.

Is your builder going the DLF way?

The CCI, in its 237-page order against DLF, has criticised the terms and conditions of the contract, which was signed by the company with the buyers of Belaire. It said that these were stacked in favour of the developer. DLF, in its defence, says that these were industry practices and it was merely adopting the same. Now, the Commission is likely to order a probe into other developers based on preliminary investigations , which suggest abuse of power by the developers.

To avoid the same fate as that of DLF homeowners, consider the following points highlighted by the CCI before signing the buyer's agreement. If, however, you are a victim, we tell you how to approach the Competition Commission in order to redress your grievances.

Punitive penalty: For any delay in payment by buyers, DLF wanted them to pay an interest of 15% per annum for the first 90 days after the due date, and 18% for delays beyond that. In sharp contrast, a delay of over three years on the part of the builder would entitle the buyer to a compensation of just 5 per square foot per month. There is no timeline specified for delivery of possession by DLF.

Unilateral right to increase/decrease super area: DLF has the unilateral right to increase or decrease the super area without consulting allottees, who are bound to pay an additional amount when demanded by the company or accept a reduction in area. If there is a reduction in the super area, the refundable amount due to the allottee is to be adjusted from the final instalment.

No exit option for buyers: Allottees have no exit option except when DLF fails to give possession within the agreed time. Even so, the buyer gets the refund without interest only after the sale of the said apartment by DLF and without accounting for the sale proceeds to the allottee.

Exit clause for the company: DLF's exit clause gives it full discretion, including abandoning the project, without any penalty. The company's liability in such a case is limited to refunding the amount paid by the allottee, with a simple interest of 9% per annum for the period for which the amount was lying with the company, and to pay no other compensation.

Unilateral changes in agreement: The developer claims the right to make changes in the agreement unilaterally without any right to the allottee.

Layout plan and land use: DLF retains the right to change the layout plan without the consent of the allottees. The agreement says, "It shall not be necessary on the part of the company to seek consent of the allottee for the purpose of making any changes in the layout plan. It is also the company's discretion to change areas for different uses like residential, commercial, etc, without even informing the allottees ('the total number of zones and their earmarked uses may be changed as per the sole discretion of the company').

Preferential location charges: The preferential location charges are to be paid upfront. However , if the allottee does not get the location, he only gets a refund or an adjustment of amount at the time of paying the last instalment without any interest.

Proportion of land: The proportion of land on which the apartment is situated and on which the allottees would have ownership rights shall be decided by DLF at its discretion and the allottee cannot raise any objections in this regard.

Community buildings: DLF enjoys full rights to community buildings, sites, recreational and sporting activities, including maintenance, with the allottees having no rights in this regard.

External development charges: Allottees are liable to pay external development charges without these being disclosed in advance and even if these are enhanced.

Power supply and charges: The arrangement of power supply and rates levied for the same are at DLF's discretion. These rates will be fixed from time to time by the company and may not be limited to the rate charged at the time by the state electricity boards.

Forfeiture of the amount paid: The allottees are required to authorise the company to forfeit the amounts paid or payable by them, the earnest money if the allottee fails to perform his obligations, or doesn't sign and return the agreement in its original form within 30 days of its dispatch by the company.

Third-party rights: Third-party rights have been created without the allottees' consent and against their interests. The company can raise money from any financial institution by mortgaging or securitisation of receivables of the apartment, building, complex or a portion of land. The company/ financial institution / bank shall always have the first lien/ charge on the said apartment for all their dues and other sums payable by the allottee or in respect of any loan granted to the company for the purpose of construction of the said building or complex.

When to approach the Competition Commission

The Competition Act prohibits three thingsanti-competitive agreements, abuse of dominant positions and mergers, as well as acquisitions and amalgamations that hamper competition. In cases related to real estate, it is usually the abuse of dominant position that is relevant. So before approaching the commission, make sure that you have enough evidence to show that the company you are complaining against is dominant in the correctly defined market.

You can do this by way of market shares as a starting point. "Any individual can approach the Competition Commission if he can prove that the practice followed by the developer is anti-competitive . In that sense any shifting of goal post after you have signed the agreement may also be construed as anti-competitive ," says Sorabjee.

How to file a complaint with the Competition

Commission Filing the application

The application should be in the form of a statement of facts, containing details of the alleged contraventions of the Competition Act. The application should also have: 1. A complete list of all the documents presented in support of each of the alleged contraventions. 2. A narrative supporting the contraventions. 3. A mention of relief or interim relief which you seek from the Commission.

This information should be signed by the individual, or by the sole proprietor in the case of a proprietorship firm, or the karta in the case of a Hindu Undivided Family (HUF). Your counsel can also append his signature to it.

Any additional documents that you want to present in support of the information should be filed at least seven days prior to the date of the first meeting. This, after copies of documents have been served on the other parties regarding the proceedings. All information should be typed in the Arial 12 font on one side of A4 size (210 x 297mm or 8.27"x 11.69") white bond paper. The text should have double spacing, with a 2" margin on the left and a 1" margin on all other sides.

You should also indicate your preferred mode of service through which you would like a reply from the Commission. Mention the legal name (s) and address (es) of the enterprise (s) that are alleged to have contravened the provisions of the Act and also the legal name and address of the counsel or other authorised representative, if any.

Whom to address and where to file

The information should be sent to the secretary of the Commission in person, or by registered post, or courier service, or facsimile , addressed as follows: The Secretary, Competition Commission of India, The Hindustan Times House, 18-20, Kasturba Gandhi Marg, New Delhi - 110 001 Tel: + 91 - 11 - 23704651 Fax: + 91 - 11 - 23704652 Provide your complete postal address with the PIN code, telephone number, fax number and e-mail address.

Fee to be paid The information should be accompanied by proof of paying the fee. This is 5,000 for an individual, HUF, NGO or consumer association; 20,000 for firms, companies having a turnover of up to 1 crore in the preceding year; and 50,000 in case of others.

The fee can be paid through a demand draft, pay order or a banker's cheque, payable in favour of the Competition Commission of India (Competition Fund), New Delhi, or through the Electronic Clearance Service (ECS) by direct remittance to the CCI accounts. These can be either: Account No. 1988002100187687, Punjab National Bank, Bhikaji Cama Place, New Delhi-110066 ), or Account No. CLCA01100002, Corporation Bank, Bhikaji Cama Place, New Delhi-110066 .


CREDAI opposes proposal to form regulator for realty sector

CHANDIGARH: Real estate industry body CREDAI today opposed constitution of a regulatory body for the real estate sector, saying that it would become a "breeding ground for corruption" if implemented. "The proposed regulatory bill will become a breeding ground for corruption (if implemented)," the Confederation of Real Estate Developers Association of India (CREDAI) President Lalit Kumar Jain told reporters here today.

The Centre has proposed to form a regulatory body through the Real Estate Regulation Bill 2011 which seeks to protect home buyers from fly-by-night developers.

Arguing that the objective of draft regulatory bill was limited to just consumer protection, Jain sought the jurisdiction of the bill be expanded to address other pressing issues like long delay in approval, rising cost of material and labour etc, which hold utmost importance for the sector.

"Only controlling one issue (consumer protection by the regulatory bill) is not going to help unless the entire spectrum of the industry is handled by the proposed bill," he said.

CREDAI further questioned the formation of any regulatory body on the ground that there were a number of options and mechanism like the consumer affairs department, the Competition Commission of India redress consumer grievances.

"Then what is the need for increasing the number of windows for (consumers)," asked CREDAI Vice President Getamber Anand.

Firm told to refund Rs. 12.77 lakh paid for apartment

The HINDU MANGALORE, August 23, 2011

The Dakshina Kannada District Consumer Disputes Rederessal Forum has asked two partners of a real estate company to refund Rs. 12.77 lakh paid to them towards an apartment along with a compensation of Rs. 10,000.


The forum found that the company failed to realise the promises made.

Complainant K. Dinesh of Karwar had accused Pramod Gupta and Shakir Ahmed, managing partners of the city-based BRP Developers, of failing to deliver the apartment on time and not providing the facilities promised.

The builders had promised to provide amenities such as water connection, roads, electric connections, club house, swimming pool, compound wall, etc.

Mr. Dinesh had paid Rs. 12.27 lakh of the Rs. 15.84 lakh to be paid for the apartment. He stopped further payment on finding, during a visit to the property at Kotekar village in May, 2010, that the promised facilities were not being provided. His letters to the managing partners did not evoke any response.

The respondents maintained before the forum that the case was not maintainable because of the clause in the agreement that any dispute between the parties had to be solved through an arbiter. The fund could not be claimed as he had not made the full payment of the deal, they contended.

The forum headed by Ravishankar said that Mr. Dinesh had exercised the additional remedy to redress his grievance by approaching it. The forum found that the builders had not delivered the promised property on time to Mr. Dinesh.

The forum also asked the firm to pay a litigation cost of Rs. 1,000.


Pune's housing society goes online

Submitted by admin on January 7, 2010 - 11:01 am

Going online has become a trend in the IT capital of India. And apartments can't be left behind. A former techie couple have developed a website that allows managing committees of housing complexes to post their financial accounts and related news online.

Here is how it works:

Let's say you are a working couple living in an apartment complex. If you have a problem, let's say a leak in the roof, simply post your complaint on the website http://www.apartmentadda. com, which members of the managing committee of your apartment complex will be monitoring. This way, you don't have to make time on the weekend to inform the managing committee in person.

The website is the brainchild of Venkat Kandaswamy and Sangeeta Banerjee who bought an apartment in Bangalore in 2006. At that time, they became members of the apartment owners' association, which kept them up-to-date on the goings-on in the housing complex.

However, its functioning left much to be desired. For example, members relied on wordof-mouth reports from staff on the goings-on in the complex. Secondly, working styles used to change with every new management committee. Also, meetings were scheduled for weekends, which ate into time with the family.

Venkat and Sangeeta felt the need for a comprehensive ready-to-use software that offered an apartment management system. That is when the couple came up with the idea of apartmentadda ('adda' means hangout in Bengali and some other languages).

"It took us just three months to develop the software, and since then we have been focusing on improving the website," says Sangeeta. And now, they have invited residents of other apartment complexes to use the website.,


It has three tools: 1. Communication tool includes Notice Boards, residents' directory; 2. Management tools includes online complaint system; 3. Accounting tools includes tracking maintenance dues. "To use the tools, the management committee of an apartment complex has to register with the website. Once registered, each apartmentowner will be given a login name/password," says Venkat.

"If they have any problem to be taken care of immediately, all they have to do is register their complaint online and it will be taken care of by the staff appointed by the managing committee to monitor the website. Residents can keep track of their complaints, or other society matters, even when they are not in town. The website also makes it easier for them to keep track of their maintenance dues. It is a boon for apartment-owners who are not residing in the State or country," says Sangeeta. The financial details can be accessed only by residents of that particular complex.


The website also provides a platform for residents to share their views on the facilities available in the locality. There is a section called Crossover Adda, which allows different apartment-owners to interact with each other, share views and opinions. "Residents can rate their newspaper vendors, cable network, milk vendors, creches and lots of other things. This can be very useful to new residents," says Sangeeta.

"You can also have lots of fun on the website. Suppose you are an IT professional and you want to know of fellow software engineers in the complex, use the search engine in the website. It helps make friends easier," says Venkat. In the last one year, 103 apartments have subscribed to the website. "We expect many more to join us," said Venkat.

How different is this website?

The website offers flat-owners a platform to discuss problems and offer solutions. While other interactive platforms (online communities) provide for a general mailing list, goes a step ahead by allowing users to access financial and management tools pertaining to their housing complex.


Builder's beware

By Prasad Sathyen.

Now please get ready to be more transparent while dealing with the purchasers. Next time any potential purchaser's approaches your office please make sure to be ready with full and final, true disclosure of the comprehensive scheme or project of the development plan of the plot on which flats are going to be constructed. In other words, the entire project plan has to be placed before the promising purchasers. Any deviations from the existing original plan shall require consent of flat purchasers. Further, any additional future developments cannot be concealed by the developers before potential purchasers or at the time of signing of the agreement. This was one of judicial pronouncement very recently held by the supreme court of India. Whether a particular project on the plot will be loaded by Transfer of Development rights or is their any plan to utilize the additional floor space index to construct additional structures, whether there will be a multiple building scheme or a single building scheme or a ten storey tower or a twenty storey tower, developer shall be legally bound to disclose everything at the time of the execution of the agreement with the flat purchasers. Only due to such disclosure of plans and specifications potential purchasers are persuaded to purchase the flats.

In big relief to flat buyers in the state, the Hon supreme court in its historic verdict under the presence of Justice Arijit Pasayat and Justice SH Kapadia in the case of M/s Jayantilal Investments vs Madhu Vihar co-operative housing society Ltd as on 11th Jan 2007 held that Once the original plans of the building are approved by the local authority and the flats are sold on that basis, promoter/developer is prohibited from making any additions or alterations without the consent of the flat purchasers. It was held by Supreme Court that a comprehensive project scheme has to disclosed on such plot of land where the builder is going to construct the flats. Further it interpretated section 7A of Maharahstra Ownership of flat Act,1963 stating that builders cannot construct additional structures which is not in original layout plan without the consent of flat purchasers and concluded that it will not get protection under the said provisions if any additional structure proposed to be constructed is absent in the original layout plan. Thus Once the original plans are disclosed and registered, then subsequent amendments cannot made by the builder.

The Hon. Supreme court stated that The MOFA law which regulates the activities of the builder was enacted for the benefit of flat purchasers and not to confer benefits to builders which makes amply clear that when builder enters into agreement with the flat purchasers, he is required to form the society as soon as minimum number of flat purchasers is required to form the society. And, thereafter the conveyance has to be executed in the favour of the society within 4 months. The court reminded that builder's obligation is statutory as the concept of development should be directly in rhythm with the conept of registration of society and conveyance .

In the given case Madhu vihar scheme was floated by developer at Kandivali where he had purchased the plot. Construction of the Madhu vihar scheme started in the year 1980 and was completed in the year 1989. In the mean while, there were changes in the plans as many as four times. However no additional building like the one proposed in the plan approved on 29th march, 2001 was included in the plans between 1985 and 1989. The promoter wanted to utlilise the garden which was maintained by the flat purchasers to construct additional building. Promoter/developer neglected to form the society. Inspite of stiff opposition from the promoter, the purchasers moved to the concerned authorities for registration. Ultimately, when the society got registered on 20th January, 1993, it was obligatory on the part of the promoter to convey and to give conveyance within 4 months from the date of the registration of the society. But unfortunately the promoter neglected as the Madhu Vihar scheme was incomplete which was the main plank of the developer against the society.

Nainesh Shah, of Everest group reacted, " the entire project approved plan cannot be obtained in big projects but as far as transparency is concerned we can disclose how we are going to utilize the FSI in the given layout to the purchasers."

"The verdict is good but cannot be generalized, but as there are so many housing projects in Mumbai where several times the layout plan get changes. What can be done if a builder is developing a big project in phases and getting additional FSI and TDR later which is also a cumbersome process that normally gets delayed due to the slow system. Consequently, a revise plan has to be submitted before the corporation once you get additional FSI and TDR", concurs Mufotraj Munnot, president of Maharahstra chambers of housing industry.

"Before the Supreme court verdict, there was a lot of confusion among the flat purchasers in Mumbai due to the routine mundane excuse of the builders stating that they are unable to form cooperative housing society and give conveyance as the entire project is not yet completed", explains Advocate D.S. Vader, chairman of Mumbai Housing Federation. Supporting the view of Housing Federation, Advocate Vinod Sampat said, "it is a misconception of many developers to wait for the entire project to get completed and then register the society and thereafter give conveyance. Now such misconceptions shall have no place due to this verdict." Further he said, " non cooperation from builders to form the society and give conveyance due to such planks , purchasers can take the support of this verdict which would be of immense help while filing a case in the consumer court."

Point to be noted is that Supreme court interpretated the law already under the provisions of MOFA.In the past there was a micsconception that builders are protected under section 7A of MOFA.

The arguments shall never end but this verdict is a real New Year gift for the purchaser's as the builders will be now duty bound to be more transparent while dealing with the purchasers. The verdict has shown that today consumers are the king and they cannot be taken for a ride.


The Builder is obliged to give the Occupation Certificate

The Occupation Certificate (OC) is an important document for those purchasing flats under the MOFA (Maharashtra Ownership Flat Act), and must be acquired before possession of property. Consumer courts will support the purchaser if the said is not done by a developer.

Recently, a Consumer Disputes Redressal Forum ordered a developer to give a purchaser OC within four months.

A recent case

As per an agreement in September 2006, the purchaser bought two flats in a locality near Powai Lake. After paying the agreed amount for the flats, a remainder of one lakh per flat was agreed to be paid on possession. The possession was promised within 12 months from the date of agreement. The promise was not fulfilled

The OC or the Completion Certificate however, was not provided as promised. The builder was notified; failure to respond prompted the purchaser to file a complaint before the Forum and also an application seeking interim relief.

The developers said that the purchaser wanted to merge both the flats into a single unit, as per the letter in September 2006. And since this was against the building's approved plan, he was to do so at his own expense after getting an approval from the sanctioning authorities. Since the purchaser failed to set what he had planned the OC couldn't be obtained from the authorities.

The forum maintained that the developer should have fulfilled their basic obligation of constructing the flats as per the original plan. The flat's construction is incomplete even after three years. The modifications were at the purchaser's behest. The developer had received a payment of almost 98 per cent of the final agreed amount, and in spite the flats were not finished.

The developers claim that the work was completed and possession handed and will appeal against this order.

Importance of Occupation Certificate (OC)

The OC, issued by the local municipality, stands for the completion of the property as per the approved plan, so as to be fit for occupation, and should be in compliance with all concerned laws.

Many get possession, though not the OC, due to which the municipality can either evict or impose penalties. Without the OC, the possession is illegal.


Consumers told to stand up for their rights -

Special Correspondent HINDU OF 17-1-2010 Mangalore -From the website of the newspaper

9,351 of the 9,500 cases received by district forum have been cleared
People should demand receipts for any purchase: commission

MANGALORE: Consumers in the coastal region do not seem keen on initiating legal action against companies and institutions for supplying faulty gadgets or providing deficient service.

This was stated by K. Ramanna, president of the Karnataka State Consumer Disputes Redressal Commission. He was inaugurating a consumer awareness programme and legal workshop at Lions Seva Mandir here on Saturday. Mr. Ramanna said that although the region, and the districts of Shimoga and Kodagu, had a high percentage of educated people, they were not taking recourse to the law even when they were exploited by certain providers of goods and services. He wondered whether people preferred out-of-court settlements.

People could file cases against educational institutions, post offices, hospitals and nursing homes. He cited the example of a girl who had not received from her college the hall ticket to attend the second PU examination, despite having paid Rs. 6,000 as tuition fee. The college did not have government recognition. A district forum had ruled that 50 per cent of the tuition fee should be refunded to the student along with a compensation of Rs. 2,000 and litigation cost of Rs. 500. When the college appealed to the commission, it increased the compensation to Rs. 25,000 and asked the college to refund the entire tuition fee along with the litigation cost of Rs. 2,000, Mr. Ramanna said. The commission had also allowed a case filed by an unemployed youth against the post office, which had delivered an interview call letter after the interview date. on.

Mr. Ramanna advised people to compulsorily obtain receipts for whatever they bought. Traders usually discouraged people from demanding receipts by referring to the additional tax burden. There were many instances of consumers failing to produce a receipt before consumer forums, he said.

Complimenting a television news channel for exposing the malpractices in sale of petrol in Bangalore recently, he said the media could spread the awareness about the Consumer Protection Act. District in-charge Minister J. Krishna Palemar said that many people wrongly believed that going to court with cases involving meagre losses was not worthwhile. In Bangalore, a few advocates were offering free service to the people for filing cases in consumer forums. In Dakshina Kannada this was missing, he said.


Builders must fulfill promises in brochure: HC

Shibu Thomas, TNN, 23 March 2006, 12:32am IST Source:

MUMBAI: In an order that will bring cheer to flat buyers, the Bombay high court has held that builders are bound to honour the promises made in their brochures.

Justice K J Rohee observed that the facilities mentioned in the brochure can be treated as part of the agreement even if it not part of the pact between the builder and the flat buyer.

The verdict will have an impact on the real estate industry where developers are known first to present glossy green vistas to buyers only to alter the layout later and shrink the gardens.

Hearing a petition filed by residents of the Madhu Vihar Cooperative Housing Society in Kandivli, the court restrained the developers, Jay-antilal Investments, from any construction on the plot of land shown as reserved for a garden.

It also asked the developers to convey the title and execute all the relevant documents in the society's favour.

The Madhu Vihar housing project of 126 flats and 12 shops was floated by the developers in 1985 and completed four years later.

When the developer failed to form a society as per the rules, residents got their society registered in 1993. The builder, however, did not convey the title of the land, flats and shops to the society.


Bare all or lose all, HC tells builders

Shibu Thomas, TNN, 25 January 2010, 02:54am IST

MUMBAI: Builders who fail to make "full and true disclosure" beware. In an important judgment, the Bombay high court has held that a builder loses the right to engage in further construction on a plot if he fails to inform the flat buyer of the complete details of the housing project on the plot, including any future available building rights on the property.

"If the entire scheme, including the information about Transfer of Development Rights/Floor Space Index, is not disclosed, then the promoter loses his right to use the residual FSI," said Justice C L Pangarkar. The HC dismissed an application by Noopur Developers seeking a stay on a civil court's injunction against their building project on a plot in Borivli (W).

"Had the original layout shown the proposed construction in a phased manner, then the promoter did have a right to make construction of an additional building without permission of flat purchasers," said the judge. In such circumstances, the new project can go ahead only if the flat owners give their permission.

More importantly, striking a blow for flat owners who wait for years for the builder to form a housing society, the HC has held that the builder also loses his right over any additional building rights on the property if he fails to register a society within four months of handing over the flats or the time stipulated in the agreement.

According to provisions in the Maharashtra Ownership of Flats Act (MOFA), the developer has to see that a society is registered within four months of handing over flats. It is the builder's duty to convey the flats to the owners within a further four months, the law also says. "The legislature intended that conveying the title and formation of society must be completed within the time as stipulated" to safeguard against an "unscrupulous promoter", said the judge.

The case in which the judgment came concerned a plot spread over 2,642 sq m at the junction of Factory Lane, S V Road, Borivli (W). Noopur Developers had constructed a building, Megh, of ground-plus-seven storeys with two wings on the plot in 1997. According to the flat purchasers, the original layout shown to them comprised Megh, another existing old building on the plot, a pump room and underground water tank. Recently, the developer demolished the old building and proposed to construct a new one. Around 43 flat owners in Megh opposed the project, claiming that their permission was necessary. When the civil court granted an injunction, the builders moved the HC. Senior advocate V A Thorat, counsel for the builder, pointed to the changes in MOFA (Section 7) which said that flat owners have no right to object to any additional construction sought to be put up on a property if it is approved by the municipal corporation. The demolition of the old building and its redevelopment was approved by the BMC, the advocate said.

The judge did not agree and cited sections 3 and 4 of MOFA as well as Supreme Court judgments, which make it mandatory for the builder to give complete details of a project and whether additional building rights can be utilised on the property. The judges said the SC had clarified that, "If the promoter places these things before the flat purchasers, then their permission would not be necessary."

The HC said in the present case that was not complied with. "(The original plan) did not disclose that as and when the tenants in the old building would vacate it, the same would be pulled down and a new one would be constructed. The plan did not show proposed development of this area in a phased manner," said the judge.


Consumer court orders erring builder to repay deposit

TNN, 8 May 2003, 12:38am IST

|VADODARA: A recent order of the Vadodara district consumer court has come as a shot in the arm for the consumer movement as it reasserts the remedial powers of the forum to try cases involving dispute between residential societies and its members.

In one such case about a dispute between the builder and a member of Vaibhav Apartments in Alkapuri, the district court held the builder liable for penalty for deficiency in service and unfair trade practice. The builder, Dineshchandra Pathak, had not only failed to build the house within the agreement period, but had also refused to refund the deposit to the member, Satish Brahmabhatt.

In an order issued on Tuesday, Vadodara Consumer Disputes Redressal Forum president S B Shah and jury member Harsha Chauhan ordered builder Dineshchandra Pathak and the society to jointly repay the deposit of Rs 64,500 to Brahmabhatt.

A compound interest of 18 per cent per annum will be added to the deposit from the date of payment (July 14, 1993). Also, a compensation of Rs 15,000 for mental agony and Rs 10,000 towards cost of litigation was ordered to be paid to the complainant within 30 days from the date of the order.

The case proceedings revealed that office-bearers of the proposed society (plot no 609/40), Dineshchandra Pathak and Dineshchandra Muljibhai Shah had allotted plot no. 11 to Brahmabhatt on payment of Rs 64,000 as deposit.

But in December 1991, when Brahmabhatt was to take possession of the house as per the agreement, he found that the plot was still not developed. He immediately sought refund of the deposit amount from Pathak, who is also the builder and developer of the plot.

Brahmabhatt filed a petition in the consumer court against the builder and the society in 1993 when the builder refused to refund the deposit even after Brahmabhatt pointed out that there was no sign of progress on the site. The consumer forum gave a verdict in favour of the complainant. The opponents then filed an appeal before the High Court, which was rejected.

Advocate Rekha Desai said In her argument that under section 3 of the Consumer Protection Act 1986, the forum had been given additional power for remedy in cases of grievance of unfair trade practice and deficiency in service, and hence the claim of the opponents that the forum had no jurisdiction to try the case was void.


Builder ordered to refund deposit with interest


NEW DELHI, MARCH 11. Builder Maxworth Home Ltd. has been ordered by a Delhi consumer court to refund over Rs. 5 lakhs with 15 per cent interest from August 1997 till payment to an aggrieved client for deficiency in service. The builder allegedly failed to construct a house for which the client had given money.

``The opposite party (Maxworth Home Ltd.) was certainly deficient in service. It has failed to perform its obligation in time and instead gave false promises and information to the complainant. It even failed to refund the money deposited by the complainant which is another instance of deficiency in service,'' the Delhi State Consumer Disputes Redressal Commission has said in its order.

The presiding member of the commission, Rumnita Mittal, and a member, Mahesh Chandra, also asked Maxworth Home to pay Rs. 5,000 as litigation cost to the complainant.

The consumer court, however, said, ``since interest is sufficient compensation, no separate compensation for mental agony or harassment is being awarded.'' The complainant, Kalpana Dube, said that on April 29, 1996, she had booked a plot-house in Maxworth Home's project in Bannerghatta, Bangalore, and also made all the payment by cheques as per the schedule in the brochure issued by the company.

Maxworth Home had promised her that the possession of the house would be given to her by the end of 1997 and continued to send her updates regarding the acquiring of land, progress of construction, Ms. Dube said.

However, when she visited Bangalore in February 1998, she found that the land was vacant with no construction at the site, Ms. Dube said and added that she was shocked to learn that even the land for construction was not acquired by Maxworth Home.

Then she decided to withdraw from the project and requested for refund of the deposited amount with interest and cancellation of the allotment. But Maxworth Home failed to refund the amount. Ms. Dube then moved the commission for relief. - PTI


Builder directed to pay interest for delayed delivery of apartment

Staff Reporter

Thiruvananthapuram: The State Consumer Disputes Redressal Commission has ordered a builder to pay interest on the amount paid by a consumer for booking an apartment, at the rate of 15 per cent, as compensation for failing to deliver the apartment on time.

The compensation that the builder, M/s Southern Investments, will have to pay the consumer amounts to Rs.27 lakh. The consumer had paid over Rs.20 lakh in 1997 to the said builder for an apartment in one of their projects, which is yet to be delivered. The commission has also ordered the builder to deliver the completed apartment within three months from the pronouncement of the order.

Though consumers have, in the past, secured compensation from consumer court for delayed delivery of apartment projects, this is the first time that the court has decided to award interest on the money paid by the consumer to the builder. The case against the builder was filed by E.M. Najeeb, Managing Director, Air Travel Enterprises (India) Ltd. His case was that he had paid Rs.20, 07,400 in instalments to the builder and booked apartment no. C5 in the project, Windbrook Place at Vellayambalam.

The total value of the apartment as per the contract was Rs.22, 57,000. As per the contract, the apartment was to have been delivered by the end of 1997.

The builder, in the allotment letter to the consumer in July 1995, said that they had received permission from civic authorities for construction of ground plus seven floors of the building. However, in October 1997, the builders informed him that the Government had revoked the sanction given for constructing 16 floors and fixed it at 15 floors and hence there would be a delay in the project.


The complainant was then informed that the project would be completed by the end of 1998, instead of 1997. The apartment has not been handed over to the complainant till date.

The complainant's case was that he had taken a bank loan at 18 per cent interest for paying the builders. Hence he wanted interest on the Rs.20 lakh he had paid to the builder. The builders claimed that the delay had occurred due to circumstances beyond their control. The commission said that the builders already received sanction for constructing seven floors.

By December 1997, as per their own admission, the builders had completed brick masonry work up to eight floors.

Hence it could not be accepted that delay in the completion of the apartment on fifth floor was due to unforeseen circumstances.

The builders has been asked to pay interest to the consumer at the rate of 15 per cent per annum on Rs.20,07,400 from January 1, 1998, till the handing over of the apartment,constructed as per the original agreement. The complainant will pay the remaining instalment money on handing over of C5 apartment


Flat builder ordered to pay for repairs

Source: By A. Subramani

CHENNAI APRIL 27 . Coming to the aid of a flat owner, who complained of cracks and seepage in his residence, a consumer forum has directed the builder either to undertake repairs or pay him Rs. 40,000 to the owner for repairs.

The Chennai (North) District Consumer Disputes Redress Forum also awarded a compensation of Rs. 10,000 to K.S. Varadan, who demanded from Abhinav Associates Rs. 40,000 for repairs and another Rs. 15,000 for the mental strain caused by poor construction.

Two years after taking possession of the dwelling unit in September 1989, Mr. Varadan found that water was seeping through bedroom walls and cracks appeared on partition walls.

A chartered engineer, engaged by him, submitted a report that there were several shortcomings in and violations of the building approval plan. Also, teakwood, French window and flush doors were not provided, as agreed upon.

Refuting the claims, the builder contended that the complainant had never notified any repairs.

Describing the engineer report as `false', the counter said the professional should have inspected the premises only after giving notice to the builder. He denied any contravention of the approved plan and agreement.

The forum bench, comprising the president, K. Ramasamy, and the members, V.M. Thandapani and Nagammai Karuppiah, however, rejected the builder's version and pointed out that the construction company had not taken any step to disprove the complainant's case.

On the contention that the complaint was made two years after having taken possession of the flat, the forum said seepages and cracks would not be visible when construction was fresh.

"Everything might have been in good condition immediately after construction. Therefore, the builder cannot contend that the defects were reported only after two years."

It also cited violations in thickness of the outer walls and RCC covering.

The forum directed Abhinav Associations either to carry out the repairs mentioned by the complainant or pay Rs. 40,000 so that he could undertake repairs on his own.


NBW issued against builder for disobeying consumer forum

TNN, 10 October 2009, 05:27am IST

PUNE: The consumer forum, Pune, has issued a non-bailable warrant (NBW) against builder Sunil Anthony Lazarus of JMJ Developers Private Limited for disobeying its order to refund Rs 3.92 lakh to a flat owner in 2002.

The NBW was issued by forum president P K Gaikwad and member S C Joshi on September 25. The NBW will be served on senior police inspector of the Yerawada police station through the city police commissionerate to take action against Lazarus.

Rajendra Holkar and his wife Mangala of Indore had booked a flat in a scheme floated by the builder in Pune and had paid Rs 3.92 lakh on March 26, 1998.

The Holkars moved the forum as the builder did not under taken any construction work. The forum had ordered the construction firm to repay the amount to the Holkars with nine per cent interest since filing of the case in 1998.

The firm challenged the order before the State Consumer Disputes Redressal Commission, but the same was dismissed in 2002. The national consumer disputes redressal commission, too, had dismissed the firm's appeal in 2003.

The firm filed criminal and civil petitions before the Bombay high court, but the same was also disposed off on August 10, 2009.

Lawyer Sanjay Gaikwad who is representing the Holkars filed a miscellaneous application before the forum under section 27 of the Consumer Protection Act for taking action against Lazaurs for not executing its order dated March 26, 2002. The forum then issued an NBW against Lazarus.


HC stays builder's bail in fraud case
Express News Service Posted online: Saturday , May 16, 2009 at 0429 hrs

Mumbai : The vacation judge of the Bombay High Court on Friday stayed the bail granted to builder Rashmikant Shah who was arrested at Chhatrapati Shivaji International Airport while allegedly trying to flee to Dubai on May 12.

Vacation judge A R Joshi had refused to grant any interim relief in the anticipatory bail application filed by Shah on May 12 and posted the case for hearing before the regular court on June 16. The same night, Shah was arrested by the police at the airport.

After his arrest, Shah complained of high blood pressure and was admitted to the JJ Hospital without being produced before the magistrate and was sent to police custody till May 16.

On May 14, the state government moved an application before the magistrate in Thane to convert the police custody to judicial custody as Shah was in hospital and police could not proceed with investigations. The same day, Shah filed a bail application and was granted bail of Rs 15,000. Shah is wanted in a Rs 80 crore fraud alleged in a complaint filed by another builder Mahendra Shah. Vacation judge A R Joshi said that the facts and circumstances in the case were peculiar. The court has also asked for the hospitalisation papers of Shah.


High Court : Anticipatory bail plea rejected in Natu case
Express News Service Posted online: Saturday , Jul 04, 2009 at 0113 hrs

Pune : The Bombay High Court on Friday rejected Deepak Mankar's anticipatory bail application in a land-grabbing case lodged by Yeshwant Natu, a resident of Sahakarnagar. The court also rejected the anticipatory bail application of builder Sudheer Karnataki, a co-accused in the case. The city police can now arrest Mankar in Natu's case also.

Mankar and Karnataki had filed their application for anticipatory bail in the high court after the Pune Sessions Court rejected their applications. Both of them had appeared before Justice B D Bhosale at the court on Tuesday, but the hearing was adjourned for two consecutive days as Justice Bhosale refused to look into the case. Lawyers of Mankar and Karnataki then filed the bail applications before Justice Abhay Oak on Thursday.

As the Pune police team had arrested Mankar in another case on Thursday, he could not attend the hearing on Friday. Karnataki was also absent. Justice Oak rejected their anticipatory bail applications.

The crime branch has intensified the search for Karnataki and accomplices Sadhana Vartak and former corporator Datta Sagare, who are co-accused in the Natu case. Natu had alleged that Mankar, Sagare and Vartak were involved in the attack on his house in Shukrawar Peth in February 2008. They allegedly forced the Natu family to sell its property to Karnataki for Rs 1.25 crore in March 2008.

Builder case bail plea rejected


VADODARA, March 9: Additional Sessions Judge V K Mali on Tuesday rejected the anticipatory bail applications of four persons in the case relating to assault on city-based builder Upendra Patel on February 10 last.

The learned judge also turned down the plea of the four accused-J J Dave of Jairaj Builders and his associates Kirtikant Soni, Arvind jain and Himanshu Desai-seeking interim relief of 10 days for approaching the Gujarat High Court.

The anticipatory bail application of accused persons which was pending for hearing earlier in the court of Additional Session A P Trivedi, was transferred to the court of judge Mali for de novo hearing on orders of Joint district Judge R M Parmar on February 26.


Builders must come clean on rights: HC

Shibu Thomas, TNN, 25 January 2010, 02:38am IST

MUMBAI: The Bombay high court has ruled that a builder loses the right to engage in further construction on a plot if he does not inform flat buyers of future building rights on the property. He can avail of the rights only with the flat buyers' permission.

The HC also held that the builder loses additional building rights if he fails to register a society within four months of handing over the flats or the time stipulated in the agreement and if he fails to convey the title in a further four months.

The ruling came in a court battle between over a building which Noopur developers had built in Borivli in 1997.


Blacklist builders flouting plan: HC

A Subramani , TNN, 5 January 2010, 07:05am IST

CHENNAI: The search for a mechanism to rein in builders and developers who churn out buildings in violation of sanctioned plans or raise unauthorised constructions, may end here.

If this suggestion of the Madras high court is implemented, unscrupulous builders and promoters, who flout development control rules, may have to either quit the trade or comply with the regulations. A division bench of Justices Prabha Sridevan and M Sathyanarayanan has said the government could withhold sanction for fresh projects of builders who face charges of unauthorised construction or deviation from sanctioned plan

"Desperate situations require desperate measures," the judges said, adding: "If sanction is refused on the ground of previous violation, these unscrupulous and careless buildings will be reined in and (will) toe the line. These irregular constructions will not come up. Only then, the living standards of this city can be maintained." The judges also hoped that the Chennai Metropolitan Development Authority (CMDA) and the government would take necessary action. The Ambattur Municipality, which too was made a party to the proceedings, was represented by special government pleader I Paranthamen.

The matter relates to a PIL filed by R Vanaja, who alleged that a builder had put up a totally unauthorised construction at Golden Colony in Mogappair (West), and that the building enjoyed electricity as well as sewerage connection. With these facilities in place, the builder had transferred the property to a third party, she said. She wanted the building to be razed. Not denying the charges, the builder said the structure had no sanction plan and that his first plea for regularisation had already been rejected by the CMDA. His second application is pending, he said.

The bench, expressing concern at the "unchecked proliferation of deviated construction," said: "We think that a time has come for the CMDA to consider whether some safeguards should be provided or should be introduced in the form of regulations, which will bring to the notice of the sanctioning authorities that the builder or the promoter who applies for sanction plan is already facing litigation for construction not in accordance with sanctioned plan. Then, approval shall not be given to such applicants. Some measures like this alone will discourage the persons who have no respect for adhering to the sanctioned plan, and who are motivated by greed and nothing else."

The bench has adjourned the matter to February 2, for further proceedings.

As per the original Supreme Court order, only those buildings that were completed before the cut off date of February 28, 1999 were eligible for exemption from demolition. However, the state government issued three ordinances in 2000, 2001 and 2002, each time giving a one-year moratorium for the rogue buildings. Though the Madras high court struck down the ordinances in 2007, the apex court ordered status quo.

The government, in the meantime, came out with two more ordinances of similar nature, and the second ordinance is valid till July 2010.


HC orders demolition of unauthorised buildings

TNN, 16 November 2002, 02:00am IST,br> Source:

HYDERABAD: The High Court on Friday directed conditional demolition of unauthorised constructions at Topaz, Sapphire and Emerald Buildings in Punjagutta and handed out a series of directions to authorities. Justice B S A Swamy, dealing with a batch of writ petitions challenging the construction of these buildings, ruled that there was violation of building laws and directed imposition of penalties by authorities.

In a judgment running into 400 pages, Swamy pointed out that the builder had violated "every rule in the book," which included provisions of the Urban Land Ceiling Act, zoning regulations and provisions of the Municipal Corporation of Hyderabad Act.

He gave a series of corrective directions requiring the builder to issue a notice before beginning construction, to the authorities to inspect the construction sites at the time of beginning of construction and periodically, to builders to exhibit the sanctioned plan at the construction site and on construction plans to be counter-signed by architect and civil engineer. The authorities would ensure that no multi-storeyed building is occupied without an occupancy certificate. The judge also suggested certain statutory changes in the MCH Act to bring it in line with other statutes including the constitution of a tribunal on relaxation and regularisation of illegal constructions.

The judge found that the builder in the case of Topaz Building had failed to provide borewells, lift, rain water disposal mechanism, fire-fighting equipment the absence of which posed serious danger to inhabitants of the said buildings. It was also an environment challenge.

The judge pointed out how the concerned file with the municipal corporation was missing. The judge said that the illegal structures shall be demolished after taking experts' opinion. He made it clear that those owners whose flats would be demolished would be free to initiate civil and criminal action against builders.


Builders, flat-owners lock horns over fire safety norms

TNN, 24 June 2006, 01:43am IST

HYDERABAD: With several high-rise buildings in the city getting notices for not following fire-safety norms, apartment owners and builders are at loggerheads over who should foot the bill to make the structures compliant.

Adding to the confusion, even bureaucrats are not sure who will finally implement the fire-safety norms. Some months ago the High Court had constituted a committee to suggest remedial measures that would prevent high-rises from becoming firetraps.

"While the committee is clear that the norms have to be implemented and violation of the provisions of the National Building Code (NBC) will be penalised, it is still not decided who is responsible for its implementation," director-general of fire services Alok Srivastava told TOI.

After the High Court order, notices were served on 253 buildings (above 15 metres) which were asked to put the required fire safety measures in place and obtain a final no objection certificate (NOC) from the fire services department.

"We have started inspecting these buildings afresh. The reports are awaited," said additional director of fire services P Venkateshwar. These buildings had only obtained a provisional NOC from the fire services department before construction.

Now, they have to obtain an NOC for occupancy from the department, he added. With the two-month waiver granted by the court for implementation of safety measures coming to an end, a number of apartment associations are rushing with their requests to the fire services department.

Around 40 apartment associations have made representations saying that the onus of following fire-safety norms rests with the builders. "Most of the apartment owners are reluctant to foot the bill as it is an expensive affair.

They claim builders' should put them in place at the time of construction," he said adding, "the builders too are equally reluctant."

The basic safety measures include having water tanks of 20,000 litre capacity in the basement and terrace, exit stairway, a smoke-detection system and sprinkler systems. Incorporating all these measures would cost about Rs 15 lakh, said fire department officials.

"While most sub-committees have submitted their reports, the legal sub-committee is yet to submit its report after which the committee will meet to decide on what needs to be done. The final say on the issue is left to the court," said Srivastava.

In a writ petition filed against two apartment complexes on Hill Fort Road, the AP High Court on Monday had ordered that the builder should put the fire-safety measures in place. This order is now being viewed by apartment associations as a positive sign in their favour.

"This order shows that the court is sympathetic towards flat owners. It is not fair to ask flat owners to put fire norms in place. We have made a representation to this effect to the fire services and MCH commissioner too," Dr R V Reddy, a resident of an apartment complex on Prenderghast Road, said.


Flat owners, know your rights

12 March 2005, 03:15pm IST

An association by the name "Premises Owners' and Occupiers' Association' has been formed. The aim of this association is to create awareness amongst the public about the rights and obligations of individual members of a housing and premises society. It will also deal with the subject of rights of people when they purchase flats, shops and other premises from builders and developers and the rights of the tenants and occupiers of premises.

More often than not, an individual occupier of a flat or other premises is left with the choice of either enforcing his rights or buying peace; for example, there are many rights in favour of flat purchasers and there are many legitimate obligations on the part of builders/developers but in reality, not many of them are implemented. Furthermore, to enforce rights against a builder / developer either, under a consumers' court or in a civil or high court, requires resources and determination. Builders nowadays give possession without obtaining an occupation certificate. This is illegal but to cover it up, a letter is obtained from the flat purchaser stating that he is taking the keys of the flat for the purpose of interior decoration, furniture-making etc. Thus the flat purchaser invariably becomes party to the builder's illegal act.

In a housing or a premises society, it's often been found that wrong practices that have been prevailing for a long time become the law. A purchaser of the premises is admitted as a member only during the general body meeting whereas certain bye-laws clearly state that this practice can be carried out in committee meetings and must be within a maximum of three months from the date of submission of the application for membership. Some societies ask incoming members to sign undertakings that are not part of the bye-laws. Others charge a transfer premium of over Rs.25,000 under disguised names like donation, repair funds etc.

Under the law, all these collections amount to transfer premiums. The nomenclature does not change the nature of transaction or the nature of receipt. Most of the time members relent to these unreasonable demands as opposed to taking up the issues legally. If the members resort to legal measures, the management (wrongly) uses the society's money to defend their actions, whereas the member has to use his own funds.

Despite the co-operative courts, high courts and the Supreme Court having laid down judgements stating that professionals like doctors, advocates, chartered accountants etc., they would not be violating any of the applicable laws like the societies laws, the municipal laws, tenancy laws etc. even if they take up entire portions of residential premises for their professional practice, societies' managements still raise objections against their presence and even file cases against these professionals using the society's funds to fight the cases. Thereafter, the member who had filed the case would have to continue fighting the case at his own cost.

Every society's' model bye-law book suffers from fallacies and some of them may not hold water when tested by the law. Many people now prefer apartment ownership condominiums or limited companies for their housing buildings as such organisations have proved to be better than a housing society.


Developer shenanigans

TNN, 18 December 2004, 03:31pm IST

These days due to lack of time and knowledge it is not possible for everyone to construct a house according to their choice. Hence most people select a builder and entrust the job to him. Selecting a builder is a vital element in the entire gamut of tasks associated with the construction or purchase of a house.

Before deciding to buy a house from a builder, you should check the track record of the builder. You should visit some of the earlier projects completed by him and get feedback from the people living in these projects. Thus, you should go more by word-of-mouth recommendation of previous buyers instead of relying on glossy brochures and advertisements which can be very misleading.

Selecting a builder also means getting an idea of quality and costs: the quality of material used by him in construction, labour charges, builder's fee and other details like site plan, roof-framing details, etc.

In addition, a written agreement with the builder is essential. This document should clearly define the scope of the work and timeframe within which possession will be handed over to the purchaser.

The agreement with the builder should also contain a default clause.

Some developers charge huge sums of money from customers under various pretexts. For instance, the developer could charge more money than was initially agreed upon. They also charge huge sums for providing facilities, like a fee for car parking (irrespective of whether the allottee owns a car or not), club membership fee (again irrespective of whether the allottee wants to use the same or not), swimming pool fees, IFMS (Interest Free Maintenance Security) of around Rs 50,000 to Rs 1 lakh, and last but not the least, PLC (Preferential Location Charges) which is around 5 to 10 per cent of the basic price.

In addition to the above, the purchaser also has to bear the legal and documentation charges. These include stamp duty, registration fee and service charges. All the necessary paper formalities are completed only after payment of the above said charges.

Given the contentious nature of the builder-purchaser relationship, it is not surprising that victims have had to knock at the doors of law courts often in the past. Let us now look at some real life cases that show how builders commit breach of trust and how courts had to come to the rescue of the common man. These rulings also give us a good sense of which way the courts will rule in case of future builder-buyer disputes.

In a case called National Insurance Company vs Venkateshappa, the NCDRC observed that the clauses in the agreement should spell out the rights available to the purchaser and the authority.

In another case called HUDA vs Sunita Agarwal, the NCDRC observed that in case of a breach of agreement by the builder, the latter should pay interest to the allottee.

In another case (OP Singh vs Chairman, Gorakhpur Development Authority), the Allahabad High Court observed that the authority (builder) is at liberty to adjust the price after taking into account the total cost of construction. The cost indicated in the brochure is only indicative. If the builder charges more than the initially agreed cost for the building, then the builder is right in demanding the same. The court said that the builder is entitled to demand more money even after handing over possession of the building. The court, however, added that the fresh demand should be justified and should not be arbitrary. The Court said its ruling was based on the simple logic that no one should be asked to carry on business by suffering losses, specially in cases where the builder is a Public Authority, as the latter function with public money.

In another case, the NCDRC observed that handing over of possession of a building which is incomplete even in some respects is no possession at all. In a case called Consumer Protection Council vs. Rourkela Development Authority (a public authority), the Apex forum found that the Authority had handed over possession to allottees after considerable delay. Moreover, to the utter surprise of the allottees, several infrastructure facilities like drinking water, sewage, link road, etc. were not provided. The allottees approached the State Commission and the Commission appointed a local commissioner to assess the situation. The said Commissioner in his report submitted that all the allegations were true and that basic amenities were not provided by the public authority. The local commissioner awarded compensation which the State Commission felt was on the higher side. The State Commission then set the order aside.

Aggrieved by this order the allottees made an appeal to the Apex forum. The latter set aside the State Commission's order and directed the Development Authority to pay compensation as awarded by the local commissioner.

In another similar matter (HP Housing Board vs Varinder Kumar Garg), the Hon'able Supreme Court held that even if the allottees want to retain the flat, they should be compensated with Rs. 60,000 for carrying out repairs. In case they did not want to retain the flat, their money should be refunded along with 18 per cent interest calculated from the date of deposit.

Thus, in selecting a builder, your best option might be to purchase from established, well-reputed names.


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