Last Updated on June 21, 2024 by Satish Mishra
Recently, cases wherein builders or purchasers causing unreasonable delay in handing over the possession of the property are on a rise. The builders refuse to handover the property even after the amount agreed has been paid by the buyer. The buyers are left in a lurch without no affirmation whatsoever.
It happens so often that the builders don’t abide by their own builder-buyer agreement.
Nevertheless, it does not mean that the buyers or consumers of services are left unprotected by the law. The Consumer Protection Act protects such Consumers who fall prey to such situations.
Also Read- DELAY IN POSSESSION COMPLAINT TO RERA PUNJAB
When can you take legal action against the builder?
You can take legal action the builder in the following cases:
1. The builder has used substandard products or poor quality material to construct the project.
2. The builder does not have relevant permits by local authorities.
3. The builder has constructed the project on the illegally acquired land.
4. The builder has committed fraud in booking the project.
5. The builder changed land use, layout plan, and structures without approval.
6. The builder is charging hidden charges.
7. The builder has canceled the booking after receiving the booking amount.
8. The builder is causing a delay in delivery of possession.
9. The builder has created a third party interest in the flat allotted.
10. The builder is not providing a Completion Certificate.
Also Read- LEGAL NOTICE BEFORE RERA CASE FOR ANY DEFICIENCY
What Legal Action can be taken against a Builder?
I. Send a legal notice: It is important to send a legal notice to the builder for delay in possession through the soundest property lawyers in India.
II. File a case in consumer court under the Consumer Protection Act, 1986 ‘deficiency in service’, The Act lays down which consumer dispute redressal forum the consumer can approach to file a consumer case depending upon either the amount of damage suffered or the value of the property.
The compensation for delay in possession can be claimed even if the possession is delayed by a day. The act does not specify any delay period for filing a case.
A complaint can be filed in a District Commission for claims up to Rs. 20 lakh.
A complaint can be filed with the State Commission for claims between Rs. 20 lakh to 1 Crore.
The National Commission can be approached for claims more than Rs. 1 Crore.
Also Read- CHALLENGE CONSUMER COURT ORDER IN STATE COMMISSION PUNJAB HARYANA
III. Claim Refund of the Amount paid to the builder: As a buyer, you can claim a refund for the property if the delay in possession delivery is too long. Here, you can directly file a civil case.
IV. Claim Interest: Various states have special provisions to protect the interests of the purchasers.
V. File a Criminal Case: You can also file a criminal case against fraud committed by the builder in booking the property.
Also Read- EXECUTION OF CONSUMER COURT’S ORDER
Real Estate (Regulation and Development) Act, 2016.
RERA was instituted with the aim to halt exploitation of buyers, safeguard their interests and provide stringent punishment for builders delaying possession of the property.
The Act also institutes the State Real Estate Regulatory Authority in every state for redressal of grievances against a builder.
The Hon’ble courts of India have passed a number of judgments wherein they have laid down strong remedies for buyers who are affected by the delay in possession by the builders and/or service providers.
Also Read- COMMERCIAL PROJECTS FOR LIVELIHOOD COVERED BY CONSUMER COURTS
In the case of Chief Administrator, H.U.D.A. & Anr. v. Shakuntala Devi, the State Commission held that the Respondent had established deficiency of service by the Appellants as there was a delay in handing over physical possession of the plot and was entitled to compensation. In the appeal, the National Commission upheld the State Commission’s order.
In Pradeep Narula v. Granite Gate Properties ( Consumer Complaint No. 315 of 2014 Dated 23rd August 2016), Commission held that the Builder was under a contractual obligation to complete the construction and hand over possession of the apartments to the Complainant within 39 months from the date of allotment, and the Builder had failed to do so and none of the reasons given by the Builder were justified.
The Commission directed the Builder to complete the construction and hand over possession before a stipulated time, failing which, they were to pay compensation in the form of simple interest @ 10% per annum from the committed date of possession till the date possession is offered to the apartment owner. Accordingly, the Commission ordered the Builder to pay to the Complainant, compensation to the same effect as mentioned in the Apartment Buyers Agreement. The Builder was also required to pay Rs. 10,000/- as the cost of litigation to the Complainant.
Also Read- STATE CONSUMER COMMISSION CHANDIGARH PUNJAB HARYANA
In Beatty Tony v. Prestige Estate Projects (Revision Petition No. 3135 of 2014), the Commission held that the reasons accorded by the Builder did not justify the extent of the delay. As per the agreement, the Commission awarded interest to the Complainant at the rate of 7% per annum, on the money paid by them before the allotment, for the period of the delay.
Ongoing delay in the possession of the goods is one of the gravest nightmares of a buyer. It is justifiable to pay damages or recovery if possession is delayed to consumers in case of default by the seller’s side.
You must take free legal advice from best/top/expert consumer lawyer/advocate legal advisor in case of delay in possession matters of property be it District Consumer Forum Chandigarh Mohali Panchkula or State Consumer Commission Punjab & Haryana or now RERA Punjab and RERA Panchkula Authority.
This post is written by Ahana Kurande of Mumbai University (Law). For more info on subject, please dial 99888-17966.
