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Builders must pay for delay in possession

More power to the consumer is our motto, whether buying rajma or a watch. Pushpa Girimaji tells you how to get empowered. Pushpa Girimaji writes.

delhi Updated: Aug 28, 2010 22:57 IST
Pushpa Girimaji
Pushpa Girimaji
Hindustan Times

In recent months, I have received a large number of highly distressing mails from consumers on the harassment that they are facing at the hands of builders. In most of these cases, the consumers are senior citizens who have sunk in a large chunk of their savings and are unable to get back their money or the promised flat.

In one particular case, for example, where the builder has not given possession even three years after the promised date, the consumer is being offered a refund of only 50 per cent of the money paid by him on a 'take it or leave it' basis. In another case, the builder not only delayed handing over possession, but insisted on the consumer signing on a back-dated possession letter. He was even threatened that if he refused to sign on the dotted line, he would not get possession at all.

What is apparent in all these cases is the failure of the government to protect the interests of the consumers vis-à-vis the housing sector. Here is a typical case.

SK Dodeja: On superannuation from a PSU in JULY 08, I invested Rs 32 lakhs, a large part of my retirement proceeds for a Property with a private builder August 1, 2008. The builder is neither giving possession nor refunding my money. At the time of booking there was no clause for payment of interest etc but it was also not expected that my huge amount of Rs 32 lakh would get locked for such long time. Kindly suggest remedy. .May be like me, there are many others suffering but in my case because of full down payment, the suffering is all the more.

A: I would suggest that you first try the Mediation Centre provided by the Delhi government and see if you can get back your money ,along with interest, from the builder. (Mediation centre telephone numbers: 23381759, 23379074)

If mediation fails, you can always file a case before the consumer court. In its landmark judgment in the case of Lucknow Development Authority Vs MK Gupta (CA No 6237 of 1990 decided on 5-11-1993), the Supreme court made it clear that “When possession of property is not delivered within the stipulated period, the delay so caused is denial of service” and a consumer who is a victim of such delay is entitled to compensation.

It also made it clear in this judgment that the compensation awarded by the consumer courts in such cases should serve the dual purpose of recompensing the individual while simultaneously bringing about a qualitative change in the attitude of manufacturers and service providers towards consumers.

Subsequently, in a number of cases where possession was not given within the stipulated time, the consumer courts have directed builders to return the money, along with penal interest, or hand over possession and pay the consumer compensation for the suffering caused on account of the delay.

I must also mention here the case of JL Sethi Vs Senior Citizen Home Complex Welfare Society (RP no 3129 of 2005, decided on August 21, 2006) where the National Commission chastised the Delhi State Commission for not keeping in mind the fact that the consumers were senior citizens while deciding the case.

There are also cases where consumers have taken possession and then filed a case demanding compensation for the inordinate delay in handing over possession.

In the case of Ghaziabad Development Authority Vs Gurdutt Pandey (RP No 152 of 2000) for example, the National Commission dismissed the contention of the authority that the right of the consumer stood extinguished on his taking possession of the house and said that consumers could seek compensation for defective construction or delayed possession even after taking possession.

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First Published: Aug 28, 2010 22:53 IST