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11 years on, builders to pay up Rs 37.5 lakh
July 27 2007 , 09:20 AM   #1
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11 years on, builders to pay up Rs 37.5 lakh

New Delhi, July 26:

THE National Consumer Commission has directed Ansal Properties and Ansal Buildwell to pay nearly Rs 40 lakh as compensation to a buyer who did not get her apartment despite paying for it 11 years ago.

In a recent judgment, the Commission directed the builders to pay Rs 7.5 lakh as compensation for the delay in handing over possession, and Rs 30 lakh as refund, including simple interest. This makes it one of the country’s single biggest private property compensation cases.
The buyers, however, now plan to file a criminal case against the real estate giants for planning to sell off the property.

On July 9, 1996, Veena Khanna, wife of Dr Sushil Khanna, formerly employed with Ranbaxy, signed an agreement with the builders for an apartment at Oriental Homes in Sushant Lok III, Gurgaon. The total cost entailed Rs 23.33 lakh.

According to Khanna’s complaint, she paid Rs 15.12 lakh on different dates till January 16, 1998. There was, however, “no progress in construction” of the 2,000-sq ft, four-bedroom apartment. Ergo, she stopped payment.

The builders had informed Khanna in January 1998 that they would give possession by June 1, 1999. But the flat was neither built nor delivered. The family then sought refund of the deposited amount with compound interest at 18 per cent per annum.

With Ansals refusing to pay, the buyers approached the State Consumer Commission in September 2000.

‘Preferential judgment’ by state commission?

On December 6, 2005, the State Commission directed Ansal Properties and Ansal Buildwell to refund Rs 15.12 lakh paid by Khanna, with 13 per cent interest for each year since the payments. At the same time, the Commission declared that if the builders “choose to hand over possession of the flat, the order of refund will not come into operation”.

The Khannas then approached the National Commission, seeking adequate compensation for the intervening years, or at least possession of the apartment. “It appears,” Commission president Justice M B Shah observed, “the order passed by the State Commission gave preferable alternative to the opposite parties, and the builder took undue advantage of it.

The National Commission also remarked that the State Commission should have directed the builders to pay an adequate compensation, as well as possession of the same flat or one of similar size.

The panel also ruled that paying interest is “not any compensation because the buyer had taken a loan and was paying it back to the bank”.

Compensation was inadequate: Khannas

The Khannas regard the compensation package inadequate. “Simple interest calculated by the State Commission had been 13 per cent per annum. This does not equal the rise in property rates,” Dr Sushil Khanna said. “That is why we went to the National Commission. Factoring in inflation, the total amount due is actually quite higher.”

Veena Khanna said: “Any delay in possession is disastrous for middle-class salaried buyers. At 1994-95 prices, the booking value for the 195-sq yard plot was Rs 23 lakh, with an architectural plan for a four-bedroom, 2,000 sq ft apartment. At current value, the amount directed to be paid to us is not even sufficient to buy a one-bedroom accommodation.” The Khannas are also aggrieved that the builders are now planning to sell off the apartment. They now plan to file an FIR with the Connaught Place police, and also approach the Supreme Court.

‘Demand unjustified’

“We have submitted Rs 30 lakh as directed by the court earlier. The company has not yet decided on the recent compensation order. We also cannot comment on giving possession to the buyers. We believe their demand for both compensation and the flat is unjustified,” said Ansals’ spokesperson Ankit Vishnoi.

- ExpressIndia
This is a significant decision. But there may be hundreds and thousands of such cases which haven't been compensated.

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