BlessU

Hi
Greetings

just came across a wonderful article.. hope this may hold some answers to the respite of those who are awaiting a long cherished home..

Very clearly delay is actually a DENIAL of SERVICE from a builder

First Published: 22:47 IST(3/12/2011)
Last Updated: 22:51 IST(3/12/2011)

Most agreements that you sign with builders stipulate a hefty rate of interest for delayed payments from your side. But search for a similar penalty clause for delays on the part of the builder in handing over possession, and you will find none. Fortunately, despite such one-sided


clauses in the agreement, consumers can get compensation from builders for construction delays. Under the Consumer Protection Act, a consumer is entitled to compensation for any service that turns out to be ‘deficient’. Since delays in the delivery of any service constitutes ‘deficiency’, one can demand compensation for such delays.
The Supreme Court (SC), in the landmark judgement in the case of Lucknow Development Authority vs MK Gupta, 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.

Another important point that the SC made in this case was that 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.

Rajiv Kumar Agarwal: I booked a plot in Faridabad with a private developer in 2006. They are yet to give me the possession. In mediation proceeding at the direction of Consumer Forum, they agreed to give possession by March next year. Can one get compensation for delayed possession in this case? The developer charged 18 % per anum interest for delayed payment.

Answer: You certainly can and you should demand it. But before doing that, I would suggest that you please go through the order of the National Consumer Disputes Redressal Commission in the case of Shri JL Sethi Vs Senior Citizen Home Complex Welfare Society decided on August 21, 2006). It would help you in your case. You can find the order on the Commission’s website-www.ncdrc.nic.in. Here, the National Consumer Disputes Redressal Commission has dealt in detail with the question of payment of interest to consumers in cases of delayed construction and the percentage of interest that can be paid.

In this case, the District Consumer Disputes Redressal Forum had awarded 18% interest on the ground that the builder was charging 18% for delayed payment from consumers.

While upholding this, the National Commission quoted two SC orders: In the case of Sovintorg India Ltd vs State Bank of India, (1999), the apex court had held that interest can be awarded in lieu of compensation or damages in appropriate cases. It can also be granted on equitable grounds.

Of course, you have to show that the builder delayed the possession process much beyond the stipulated time, on the basis of the time-frame given by the builder (or the promise made by the builder) towards completion of the project and handing over the property. You also need to show the loss suffered by you as a result of such delay in terms of the loss of interest on the amount deposited with the builder (beyond the stipulated time ) and also the amount being spent by you on a rented accommodation.

Cheers

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MANOJa

BlessU, great share . The fact of the matter is that u need to fight out for the compensation in courts . Most, if not all of the Builders would not pass u any kind of compensation on delays in construction .

shkhan

agree Manoja, on demanding this compensation from Parsvnath I was told "sir ya to possession le lo ya delay penalty le lo " .

I wish I had time to fight a legal battle.

vikash.kumar

ah! a really nice topic to disucss ... all the more because just like me, quite a lot of people are ignorant about our rights and process to enforce it.

Most of the builders cannot meet their committed timeline - it's common across real estate industry - so my first question : has any builder has ever paid to buyers according to delayed penalty clause ? (please qoute some real life example)

Also, i heard that builders play with words quite well - the exac word might say that "Possesion after 3 years of start of construction" and they might take the money around a year before in the name of pre-launch/ launch. So that gives them 4 years from the start of payment

Finally, common man want to avoid police/ court at any cost. The reason being ignore of procedures and also he/she is already struggling to juggle office, family, inflation, corrpution and what not. So, in usual circumstances no one would like to take on the mgihty builders.

So, my second question is - is there a easier way to get the builder pay for delay ?

ss185105

Yes, builder do pay delay penalty, but it is not easy to get money from them , it is tough, but not impposible. The way is UNITY among buyer. The real example is Crossing republic Gajiyabaad. Buyer their got united and aftter several meeting with builder and some protest they got many of thier problem solved like Delay penalty, high maintaince charge etc. See site of CROMA for more detail. It is another story that they are rather unfortunate and still fighting a very tough fight of proposed dumping ground nearby......

djvjain

It is pathetic situation and builders never give penalty so easily, even after several similar cases in consumer court, SC etc went against them.

Unit with buyers definitely work wonders, but it is just not possible in all the projects.

One new thing I heard about the delay penalty is that builders have one sided clause like " buyer is not eligible for delay penalty if they were ever late in making payments on time". Now, if you made all the payments on time, still builder could show it late by saying that "your check/draft was delayed by 2 days from getting cleared by his bank".