The Ministry of Corporate Affairs is keeping a close watch on the pre-launch announcements made by real-estate developers after it received investor complaints on the issue. A senior ministry official said, “The Ministry has been time and again receiving individual investor complaints against some of the companies in the sector. Lured by unrealistic advertisements and other pre-launch activities, the investors seem to be putting their savings into the projects, which fail to give returns.
“These activities appear to be attracting the regulations of unfair trade practices. There is thinking within the Ministry to ask the Monopolies and Restrictive Trade Practices Commission (MRTPC) also to look into the matter,” the official told Business Line. Meanwhile, the Ministry has informally asked its field offices to monitor the activities of such companies including whether they have necessary approvals in place.
Official sources, however, declined to disclose the names of the companies against which complaints have been received. As per MRTP Act, unfair trade practices cover any unfair method or deceptive practices adopted by a trade vis-Ŕ-vis the consumer. The MRTPC can inquire into any unfair trade practice upon receiving a complaint or upon reference made to it by the Central or State Government.
Sale of a flat or land before its proper launch is termed as pre-launch. Certain states like Haryana have banned pre-launch offers where builders or real-estate developers are known to have collected money even before they received requisite approvals from the State authorities. This is to ensure that developers do not make false promises, lure people to invest huge sums and then vanish, leaving investors in a lurch, said a State Government official.
Most of the Investors in the past 3 years made lot of money by putting their moolha into pre launches. However not every one has been lucky making money and many investors burned their fingers badly as few projects did not get off the ground and remained on paper, With the law taking its own time to redress their grievances, they are struck and wished they had not gone in for the pre launch and waited till all clearances for the projects have been obtained
The Maxim - Early Bird gets the Worm, doesnt hold true for pre launches
It is prudent to pay a bit more and buy realty when the projects have got all sanctions and are launced in the official manner
Monopolies and Restrictive Trade Practices (MRTPC)
An important organ of the Department of Company Affairs is the Monopolies and Restrictive Trade Practices Commission (MRTP Commission) a quasi-judicial body. The MRTP Commission established under Section 5 of the Monopolies and Restrictive Trade Practices Act, 1969, discharge functions as per the provisions of the Act. The main function of the MRTP Commission is to enquire into and take appropriate action in respect of unfair trade practices and restrictive trade practices. In regard to monopolistic trade practices the Commission is empowered under section 10(b) to inquire into such practices (i) upon a reference made to it by the Central Government or (ii) upon its own knowledge or information and submit its findings to Central Government for further action.
I am aware of the fact that the Govt. has taken a few steps towards this direction and does look into facts to facillitate consumer satisfaction. But i am not aware of govt bodies which take up such complaints & try to solve queries. How much can a consumer rely on the CONSUMER FORUM in such cases of unsatisfactory dealings from builders when the consumer has made a prelaunch investment & what are the guidelines set by the Govt to ban prelaunch bookings.