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An estimated 12-minute read

Recent Judgments on Delay in Delivery of Possession of Property

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  • Pradeep Narula v. Granite Gate Properties - Consumer Complaint No. 315 of 2014 Dated 23rd August, 2016

Facts: Mr. Pradeep Narula (hereinafter referred to as the ‘Complainant’) booked a residential apartment with Granite Gate Properties (hereinafter referred to as the ‘Builder’).

In furtherance to booking a residential apartment with the Builder, the Builder issued an allotment letter dated June 28, 2010 to the Complainant. Additionally, the parties entered into an Apartment Buyers Agreement on June 29, 2010, according to which, the Builder was to endeavor to complete the construction within 39 months from the date of allotment, i.e. the possession was to be delivered by September 27, 2013. The possession however was not offered to the Complainant by the said date and he was informed that the possession would not be given before July 2014. The aforesaid deadline was later extended till December 31, 2014. Being aggrieved by the said delay, the Complainant approached the Commission against the Builder.

Held: The Commission held that the Builder was under a contractual obligation to complete the construction and hand over possession of the apartments to the Complainant within 39 months from the date of allotment, and the Builder had failed to do so and none of the reasons given by the Builder were justified.

Compensation Paid: The Commission directed the Builder to complete the construction and hand over 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. Accordingly the Commission ordered the Builder to pay to the Complainant, compensation to the same effect as mentioned in the Apartment Buyers Agreement. The Builder was also required to pay Rs. 10,000/- as cost of litigation to the Complainant.

 

  • Jitendra Balani v. Unitech - Consumer Case No. 510 of 2015 Dated 8th February 2016

Facts: The Complainants (being Jitendra Balani and others, hereinafter referred to as the ‘Complainants’) had booked residential apartments with Unitech (hereinafter referred to as the ‘Builder’).

In furtherance to the same, a Buyer’s Agreement dated 16.04.2010 was executed between them. The Builder was required to deliver possession of the flat to the Complainants within 36 months from the date of the Buyer’s Agreement. The grievance of the Complainants was that the Builder had failed to offer possession to them within the time period stipulated in the Buyer’s Agreement.

Held: 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 Commission also rejected the argument of the Builder regarding government regulations and economic recession being a justification of the delay. The Buyer’s Agreement was entered into by Complainants with almost no bargaining power and under the threat of losing the earnest money. Further, under the Buyer’s Agreement, in case of delay in payment by the Complainant, an interest at a rate ranging from 18% to 24% per annum compounded annually was charged.  

The Commission concluded that given the delay of almost 5 years an award in favour of the Complainants was justified.

Compensation Paid: 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 case the Builder failed to deliver possession within the time stipulated by the Order it was to pay interest at 18% till the possession was finally 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. The Builder was also required to pay a sum of Rs. 5000/- each as cost of litigation in each complaint.

 

  • AL Lalpuriya Construction v. Marari Poddar - Revision Petition No. 2083 of 2015 Dated 6 October, 2015

Facts: Marari Poddar (hereinafter referred to as the ‘Complainant’), entered into an agreement with the AL Lalpuriya Construction (hereinafter referred to as the ‘Builder’) for the purchase of a flat.

The agreement executed between the parties had no particular time period fixed for handing over possession of the flat to the Complainant. It was alleged by the Complainant that, according to a letter sent by the Builder to ICICI Home Finance Co. Ltd. the Builder had assured possession to the Complainant by October 2005. The last instalment of the total consideration for the flat was paid on 28.03.2007 and possession of the flat was given to the Complainant on 27.11.2007. Therefore, aggrieved by the inordinate delay by the Builder, the Complainant approached the Commission for redressal.

Held: The Commission observed that in the absence of the requisite documents, and keeping in view that the last instalment of the consideration was paid on 28.03.2007 and possession of the flat was given to the Complainant on 27.11.2007, it can be presumed that there was a delay of about 7-8 months in handing over possession to the Complainant. In any case the possession wasn’t handed over timely. 

Compensation Paid: The Commission upheld the award of Rs. 1 lakh as compensation to the Complainant for the delay in handing over possession to him along with interest and the cost of litigation quantified at Rs. 11,000 payable by the Builder.

 

  • Puneet Malhotra v. Parvsnath Developers - Consumer Complaint No. 232 OF 2014. Dated 29th January, 2015

Facts: An agreement for purchase of property dated 28.12.2007 was executed between the Mr. Puneet Malhotra, hereinafter referred to as the ‘Complainant’) and Parvsnath Developer (hereinafter referred to as the ‘Builder’), wherein the Complainant opted for down payment plan, whereby only 5% of the sale consideration remained to be paid at the time of offer of possession.

The construction was to be completed by December 2010, however the same was stopped by the Builder in July 2008 and had not been completed till the day of the decision. Aggrieved by the actions of the Builder, the Complainant approached the Commission, seeking refund of amounts paid along with an interest of 18% to 24% per annum. It was argued by the Builder that the quantum of compensation as mentioned under agreement should be the maximum compensation payable by the Builder in the prevailing circumstances, and not what the Complainant seeks.

Held: The Commission held that compensation mentioned under the Agreement shall be payable only if the possession of the property was accepted by the Complainant, despite the delay.

Compensation Paid: The Builder was ordered to refund the amount deposited by the Complainant, along with interest @ 18% per annum from the date the deposit was made till the date on which the refund was made. Since the rate of interest granted included compensation, no separate compensation or litigation costs were granted.

 

  • Beatty Tony v. Prestige Estate Projects Revision Petition No. 3135 of 2014

Dated 18th November 2014

Facts: Beatty Tony (hereinafter referred to as the ‘Complainant’) entered into an agreement with Prestige Estate Projects (hereinafter referred to as the ‘Builder’) for purchase of a residential flat in January 2005.

As per the agreement between the parties, the possession of the flat was to be delivered within 39 months i.e. by 01.10.2008. According to the agreement, in the event of delay of delivery of possession, the Builder was required to pay interest at the rate of 7% per annum to the Complainant. The possession was eventually offered to the complainant on 23.12.2011. The Complainant made payment of the full and final consideration on 24.12.2011 and took possession of the residential flat. Thereafter, the Complainant filed a complaint with the Commission, seeking compensation @ 7% p.a. (being the compensation agreed under the agreement) for delay in delivery of possession of the flat.

Held: The Commission held that the reasons accorded by the Builder did not justify the extent of the delay.

Compensation Paid: As per the agreement, the Commission awarded interest to the Complainant at the rate of 7% per annum, on the money paid by them before the allotment, for the period of the delay.

 

  • Kaushal Rana v. DLF Commercial Complexes Consumer Complaint No. 88 of 2012 Dated 9th September 2014

Facts: Kaushal Rana (hereinafter referred to as the ‘Complainant’), applied for allotment of a commercial office to DLF Commercial Complexes Ltd. (hereinafter referred to as the ‘Builder’), on 11.03.2008.

The Builder raised demand for various sums, which were paid by the Complainant. However, when construction did not begin on the proposed site by 2009, the Complainant sought a refund of his money, which though initially accepted by the Builder was later rejected and his allotment was cancelled.

Held: The Commission found that no construction had begun and the refund of money along with interest had been refused by the Builder without any reason.

Compensation Paid: The Commission directed the Builder to refund the entire deposited amount with interest @ 18% p.a., from 20.02.2008, till realization. It also imposed costs of Rupees Two Lakh towards harassment, mental agony and litigation charges. This was payable within 90 days from the date the Order, failing which interest would be charged on it at 18% p.a., till realization.

 

  • Sandeep Lohia and Ors v. Parsvnath Developers, Complaint Case No.34/10, Dated 20th December 2014

Facts: Mr. Sandeep Lohia and others (hereinafter referred to as the ‘Complainants’) booked a flat with Parsvnath Developers (hereinafter referred to as ‘Builder’), pursuant to which a Flat Buyer Agreement was entered into between the parties on 01.05.2006.

The Complainants were assured that possession of the Flat would be delivered within a period of 36 months under the Flat Buyer Agreement. However, even after expiry of 36 months, there had been no progress at the site. Thereafter, the Complainants approached the Commission filing a complaint against the Builder.

Held: The Commission held that the Builder has clearly committed a default. It had been more than 7 years since Flat Buyer Agreement was executed and possession of the Flats had still not been handed over to the Complainants. The Commission held that the Builder’s actions amounted to “unfair trade practices”. 

Compensation Paid: The Commission directed the Builder to refund the principal amount with interest @ 18% per annum from the date of its deposit till date of this Order and to pay compensation of Rs. 4,50,000 to each of the Complainants for causing harassment and mental agony. The said amounts were payable within a period of 30 days from the date of the Order failing which the Builder was liable to pay interest @ 24% p.a. on the amounts.

 

  • Nidhi Kumar v. Supertech Limited Complaint No. 94/09 Dated 17th October, 2014

Facts: Mrs. Nidhi Kumar and her husband (hereinafter referred to as the ‘Complainants’) booked a flat in the project of Supertech Limited (hereinafter referred to as the ‘Builder’) on 27.11.2007 with the agreement that the construction of the flat would be completed before March 2009.

However, in the second half of the year 2008, the Complainants were informed that the date of delivery of the flat was extended to March 31, 2010 and they were only entitled to compensation @ Rs.5/- per sq. ft. per month for the period of delay in delivery of possession. Aggrieved by the activities of the Builder, the Complainants filed a complaint with the Commission

Held: The Commission held that the Builder had admitted that the possession of the flat was to be delivered before March 2009. However, construction of the project stood left mid-way when the Complaint was filed and even during course of trial the Builder had not offered to deliver possession. The failure of the Builder to hand over possession amounted to an ‘unfair trade practice’.

Compensation Paid: The Commission directed the Builder to refund of money paid with interest @18% per annum on the money advanced by the Complainants from the date of deposit till the date of its realization.

 

  • Nameesh Miglani v. JMD Promoters Complaint No. 53 of 2011 Dated 31st July 2012

Facts: Mr. Nameesh Miglani (hereinafter referred to as the ‘Complainant’) booked a flat with JMD Promoters (hereinafter referred to as the ‘Builder’), pursuant to which, a Flat Buyer’s Agreement was executed on 22.7.2006 between them.

The Complainant alleged that although the Builder slowed down the construction, he continued to demand payments as per the payment schedule agreed under the Buyer’s Agreement. The project was to be completed within 3 years, but the Builder failed to complete the project even after the expiry of 4 years and flats had not been handed over to the owners till date of the Order.

Held: The Commission found the case of the Complainant was genuine. The Builder had cancelled the allotment of flat of the Complainant and had refunded the amount without the Complainant’s consent.

Compensation Paid: The allotment was to be reinstated and compensation of Rs. 50,000/- for mental agony and harassment and Rs. 11,000/- as cost of litigation was awarded in favour of the Complainant.

 

  • Premium Acres Infrastructure Private Limited v. Permanent Lok Adalat (Public Utility Service), Mohali and Ors, CWP 14724 of 2016

Facts: The allottees (being Respondent Nos. 2 and 3, hereinafter referred to as the ‘Allottees’) booked a flat with Premium Acres Infrastructure Private Limited, (hereinafter referred to as the “Builder”) and entered into an agreement regarding the same.

As per the terms and conditions of the agreement possession of the Flat was to be delivered by 3rd August 2013. Further, in case of failure on the part of the Builder to timely deliver possession of the flat, the Allottees were entitled to Rs. 7,000/- per month on account of default. The Builder delayed the delivery of possession of the flat and therefore the Allottees moved an application to the Permanent Lok Adalat, whose order was in favour of the Allottees. The Builder then appealed to the Punjab and Haryana High Court against the order of Permanent Lok Adalat.

Held: The Punjab and Haryana High Court held that the order of the Permanent Lok Adalat was valid and within the confines of the Legal Services Authority Act, 1987 and therefore the award in favour of the Allottees was therefore, upheld.

Compensation Paid: The High Court upheld the award of the Lok Adalat, according to which the Builder was ordered to refund the initial sum deposited by the Allottee, along with interest of 9% per annum from the date of the deposit, wherein the interest was to be calculated upto the date of realization. Additionally, the Builder was ordered to pay Rs. 7,000/- per month according to the agreement between the parties; Rs. 1,00,000/- for non-delivery; Rs. 15,000/- as litigation expenses, all of which were to be paid within 45 days. Failing this an additional interest of 9% per annum was to apply on the total amount, from the date of the award.

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