Pay Rs 10 lakh to buyers for not handing over flats, builder told | mumbai | Hindustan Times
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Pay Rs 10 lakh to buyers for not handing over flats, builder told

Builders will now be more cautious dishonouring agreements they have made with customers. In a recent ruling, the Mumbai district consumer forum ordered a builder to pay compensation of Rs 10 lakh to two buyers for failing to hand over flats booked by them.

mumbai Updated: May 04, 2011 01:02 IST
Kanchan Chaudhari

Builders will now be more cautious dishonouring agreements they have made with customers. In a recent ruling, the Mumbai district consumer forum ordered a builder to pay compensation of Rs 10 lakh to two buyers for failing to hand over flats booked by them.

“The opponent [builder] was under legal obligation to execute the Agreement for Sale in accordance with provisions of the MOFA [Maharashtra Ownership of Flats Act] after accepting the booking amount,” the Mumbai suburban district consumer disputes redressal forum observed last week.

The bench comprising forum president Suman Mahajan and member GL Chavan held that failure on part of the builder, Sharma Realty Pvt. Ltd., to execute the Agreement for Sale was deficiency in service.

The forum has directed Sharma Realty to pay Rs 5 lakh each to Thane resident Jaywant Thorve and Shahad resident Ram Niwas Rai.

In November 2003, Thorve and Rai paid a booking amount of Rs 51,000 each and booked two 780 sq feet flats in Sharma Realty’s project at Bhandup (west). At that time, they were assured that they would get possession of the flats within 24 months.

As per the agreement, they were to pay the remaining amount in installments after construction began.

The project took off in April 2004, but a year later, Thorve and Rai were told that the property was embroiled in legal dispute and that it had to be resolved before construction of the wings in which they had booked flats could begin.

In November 2005, they approached the consumer forum after they realised that the builder could not hand over the flats they had booked. They filed a complaint demanding a refund of the booking amount and Rs 19.32 lakh - the difference in the then prevalent rate and rate in November 2005 to make up for their financial loss.

The builder had offered to refund their booking amount with interest or give them flats in other completed wings of the project at higher rate. However, Thorve and Rai refused to pay the additional amount. Their contention was that the builder is legally bound to hand over possession of ready flats to them at the rates agreed between them when the flats were booked.

Sharma Realty admitted receiving the booking amount, but disputed the rate at which the flats were booked. The complainants maintained that the rate was Rs 1,500 per sq feet, while the builder claimed it was Rs 2,500 per sq feet.