From dreams to realty
If you have questions or would like additional information on the material covered herein, please contact:
From dreams to realty
A. NCDRC to the Rescue of Beleaguered Buyers
The National Consumer Disputes Redressal Commission (the “NCDRC”) has recently passed stringent
directions1 against a builder taking strong objection to delays in construction, coupled with failure of the
builder to share the EMI of the flat buyers (“Complainants”) in agreed proportion.
The Complainants booked a flat with the builder in 2007. The builder assured to share 3/4th portion of the
EMI to be paid to the bank, if the Complainants paid 95% of the basic sale price of the flat to the builder
upfront, and availed a bank loan in such regard.
The Complainants took a loan and paid a total of 95% of the basic sale price of the flat upfront. The
Complainants even received EMI payments from the builder for the initial few years. Thereafter, reportedly,
the construction of the project stalled, and the builder even defaulted in EMI reimbursements.
The Complainants then approached the NCDRC. The builder cited various defences and offered to pay the
construction delay penalty as per the flat buyer agreement. The NCDRC, while noting the undertaking of
the builder to pay the construction delay penalty, passed various far reaching directions against the builder
including the following:
i). Builder shall complete the construction of the flat by 31.03.2017. Any revision of plans to be
accommodated within this time at the cost of the builder;
ii). Builder to obtain completion certificate by 30.06.2017;
iii). Builder shall then offer possession of the flat to the Complainants by 31.07.2017;
iv). If the builder is unable to offer possession of the flat as above, it shall offer to the Complainants a
similar flat of the same size and on the same floor, in a comparable locality at the same price which
the Complainants had to pay for the flat booked by them;
v). Builder to reimburse to the Complainants by 30.06.2016, the arrears towards agreed EMI share
with 10% interest on delay;
vi). Builder shall not increase the size of the flat sold to the Complainants without their consent; and
vii). The Complainants would be entitled to seek execution of the order through the NCDRC.
B. Significance of the NCDRC’s Order:
While the NCDRC’s order validates the contractual rights and expectations of the Complainants, it has
accorded additional remedies to the Complainants in the event of failure of the builder to comply with the
directions of the NCDRC such as:
i). Entitling the Complainants to ask the builder to buy a similar flat at the same price. There is no
restriction that the alternate flat should be of the same builder.
ii). The builder shall not increase the size of the flat without the Complainants’ consent. Increase in flat
size has been a common practice followed by many builders, which in turn not only sets off the
construction delay penalty but also leads to demand of additional sums by builders from flat buyers.
This order shall pave the way for expeditious enforcement of flat buyer agreements against deficient
1. Case Referred: Shoibal Mukherjee & Anr. vs. Parsvnath Developers Ltd.