‘Flat buyer can’t be made to pay for builder’s woes’

A flat purchaser cannot be penalised for the hurdles faced by a builder, the National Consumer Commission observed while upholding an order passed by the Maharashtra State Consumer Commission directing a builder, Sharma Realty Private Limited, to pay Rs 25 lakh to Pawan Kumar Tripathi for failing to hand over ready flat to the Vikhroli resident within the stipulated time.

A flat purchaser cannot be penalised for the hurdles faced by a builder, the National Consumer Commission observed while upholding an order passed by the Maharashtra State Consumer Commission directing a builder, Sharma Realty Private Limited, to pay Rs 25 lakh to Pawan Kumar Tripathi for failing to hand over ready flat to the Vikhroli resident within the stipulated time.

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Tripathi had booked a 780-square-feet flat in a proposed project of Sharma Realty at Bhandup in May 2003 for Rs 14.85 lakh, and in December that year his bank released payment of Rs 4.8 lakh to the builder towards the first installment.

According to his complaint, filed in late 2009, the builder had agreed to hand over possession of the ready flat by June 2007, but there was no construction activity at the site. Tripathi sought possession of a ready flat or compensation of Rs 35.88 lakh — the price that time of a flat of the same dimensions in the locality.

Sharma Realty pleaded that continuation of their development agreement with the landowners itself was threatened because of a civil litigation, and the development work was further delayed because it took five year to obtain a mandatory NOC. The builder then offered to refund the amount received from Tripathi along with interest, but expressed inability to give him a flat at the price at which he had booked it in 2003.

Sharma Realty challenged the order before the national commission, which stated the state commission had considered the case background and the compensation was computed based on principles of reasonableness.