SC notice to builders for misleading flat-owners

The Supreme Court on Friday issues notice to three developers who constructed condominiums in Gurgaon but allegedly asked for escalated cost on account of delayed possession, reports Bhadra Sinha.

Can buyers of flats built by private developers drag the builders to consumer courts for delay in giving possession, demanding escalation charges and other breaches in contract?

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The Supreme Court on Friday issued notice to three developers who constructed condominiums in Gurgaon but allegedly asked for escalated cost on account of delayed possession. The builders are Gulab Farms, Sweet Peas Farms and Gesco Corporation, owned by the Mahindra Group.

Petitioner, Welfare Association of Aggrieved Residents of Central Park, Gurgaon, challenged the judgment of National Consumer Disputes Redressal Forum which refused to adjudicate on the issue saying: “This is not a fit case for deciding under the Consumer Protection Act.”

The consumer court had said it would be open to the flat-owners to approach the civil court or any other alternative forum for redressal of their grievances.

Interestingly, the Forum on May 24, 2007 had asked flat-owners to pay statutory charges including electricity, infrastructure development charges, service tax and additional registration charges to the builder.

However, the petitioner’s counsel contended before a bench that the Forum was meant for the benefit of the consumers and not for the builders.

The petitioner claimed the builder had promised the consumers to deliver the flat by March 31, 2005, but the deadline was not adhered to.

Further, the builder later demanded more money as the constructed super area was in excess of the what was mentioned in the agreement. Even as the possession of the flats were handed over to the owners in December 2005, the builder failed to get it registered within the stipulated time of January 2006. And when the Haryana government increased the circle rate of the area, the builders later allegedly asked for more money to get the flats registered in October 2006.

The petitioner claimed the builder even failed to live upto its promise of paying Rs five per square foot per month in case the possession got delayed.