Despite several rulings defining the set principles of law, the builders continue to define law as per their fancy. After all they are fully conscious of the fact that the poor home buyers have limited resources to get into lengthy and costly litigation. The omissions by the lower courts more often than not emboldens these builders. Ravi Sinha reports about another landmark ruling by the apex consumer court, NCDRC (National Consumer Disputes Redressal Commission).
The NCDRC in a case against real estate developer Wave Group has stated that the home buyer is not bound by the “Period of Limitation” if there is a clear case of breach of contract. The period of limitation is the time limit set by the Limitation Act of 1963 for filing a lawsuit, appeal, or application.The Limitation Act defines the prescribed period as the time limit calculated in accordance with the provisions of the Act.
In this case, the home buyer Veena Jain had booked an apartment in Wave Gardens at Mohali. She was given a provisional allottment letter for a duplex apartment measuring 3275 sq feet at a negotiated price of INR 1,32, 63, 750. The project was to be delivered in 30 months, with a grace period of 6 months, and possession was promised by November 2015. Jain paid an initial amount of INR 68,50,836.
However, when she visited the site in December 2015, she was shocked to see there was no development at the project site, as proimised. Yet, the builder sent a further demand note of INR 42,28,063 on January 2016. This was followed with another demand note dated July 7, 2018, and threatened to levy heavy interest penalty for late payment.
Sensing foul play on part of the builder, she demanded her money back along with interest in January 2020. The builder not only ignored her demand but in July 2020 asked her to take possession after paying all the dues including the interest penalty of what builder termed as delay payment.
The poor home buyer had no option but to file a complaint before Mohali district consumer forum in August 2020, complaining about deficiency in service and unfair contract.
Now in a blatant violation of the set principle of law, the builder contested her claim saying that the home buyer is barred by period of limitation. The builder also argued that a home buyer is not entitled to ask for refund after Occupancy Certificate is obtained and Offer of Possession is given.
The District Commission observed that the last payment was made in September 9, 2014, and the limitation of two years would be computed from that date. Since the complaint was filed in August 2020, the commission dismissed the case as time barred. Jain challenged the order before Punjab State Commission which upheld the judgment of District Commission and dismissed the appeal.
Jain then filed a Revision Petition before the National Commission, NCDRC, which observed that Section 69 of the Consumer Protection Act 2019, which empowers the commission to condone delay if there is a sufficient ground shown to justify the cause for such a delay. It also said that a separate application is not a mandatory requirement for condonation of delay.
The National Commission also noted that the builder had continuously been breaching the obligation imposed by law and contract. It said that the flat was offered for possession after a delay of four and a half years, and hence the home buyer can’t be expected to wait endlessly for possession. And hence, the NCDRC maintained that the buyer is entitled to claim a refund. The National Consumer Commission also pointed out that there was continuous breach of contract during the period of delay and hence a fresh period of limitation would run after every moment of time during which the breach continued.
Since Jain had filed the complaint within a month of getting the Offer of Possession, so NCDRC found the complaint to be in time. Therefore, in its order the NCDRC set aside the earlier order and asked the builder to refund the amount with 9% penalty within 45 days, or pay at 12% interest if there is a delay.
The judgment though is a landmark one in a housing market like India where the home buyers are always at the mercy of the defaulter builders. But the case also leaves some questions unanswered:
Q: How could the District and State Consumer Commissions erred in making the judgment?
Q: Why Section 69 of Consumer Protection Act was ignored by the District & State Commissions?
Q: Why builders’ delays & defaults are not strictly addressed at the lower courts?
Q: Most importantly, how many buyers have the might to get into costly & lengthy litigation?
The Supreme Court, in its landmark judgment in the infamous Supertech Twin Tower demolition case had categorically asked as to how many buyers have the might to get into lengthy & costly litigation against the builders. But still nothing seems to have changed in the Indian housing market. And justice delayed, is more often than not, justice denied.
Ravi Sinha
Twitter: RaviTrack2Media
Ravi Sinha is a journalist with over two decades of cross-discipline media exposure. He is the CEO of real estate thinktank group Track2Realty. He has been writing extensively on the real estate sector for more than a decade now. Evaluation of real estate brand performance is his core domain expertise and he has immense insight into consumers’ psychograph. He has conceptualised Track2Realty BrandXReport as India’s 1st & only objective & non-paid brand rating journal that is industry-accepted benchmark of brand equity & ranking of the Indian real estate companies.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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