I contracted to purchase a commercial apartment in the Vaishali Areabordering Delhi, ad measuring 1,500 sq. ft, with a renowned builder of Delhiin January 1996. It was indicated at the time of booking that the cost ofthe apartment, including external development charges, would be Rs 35 lakh,which would entail payment of Rs 5 lakh at the time of booking, followed bynine equal time-bound quarterly installments of Rs 3 lakh each and the lastand final installment also of Rs 3 lakh. It was tentatively indicated atthat time that the apartment shall be handed over to the respectivepurchasers in approximately three years from the date of commencement ofsite construction. While the offer document did specify that the prices wereescalation proof, it was totally silent on the issue of compensation if anypayable to the flat buyer in the event the builder-developer failed toadhere to the delivery date.In pursuance of the agreement executed on the above lines, I have alreadymade payments of the time-linked installments (some with over due interestat the rate of 20 per cent per annum) and only the final installment of Rs 3lakh payable at the time of possession of the commercial apartment is due.Meanwhile, I have been shocked to receive a letter from the builder-promoterthat as the work on the block of flats in which the area assigned to me hasbeen postponed indefinitely, I should accept alternate accommodation that isbeing offered on the fourth floor (back portion) in the adjoining block offlats. My booking is, however, for a ground floor front sideshowroom-cum-office. I have verbally advised them of my inability to acceptthe alternate accommodation and have requested them to refund my money withinterest. They, on their part, continue to coerce me to accept the alternateaccommodation that they have offered.
Please clarify whether the builder-developer has any right to force apurchaser to accept an alternate offer. Why can't a purchaser upon demand berefunded his money with interest when the builder-developer has failed toeven commence the construction of the property sold to him as per theagreement of sale executed between the seller and the buyer? What otherrelief or remedies are available to a purchaser, given the circumstancesthat the seller had mischievously duped him into parting with hishard-earned money even when he had absolutely no intention to deliver thecontracted property in conformity with his contractual commitment. Does thisnot amount to perpetuation of a fraud?
-- Govind Sahay, LUDHIANA
You need to check the fine print in the agreement that you have entered intowith your builder-developer. I suspect that upon closer inspection of the`agreement to sell' you will find that the builder-developer has reservedunto himself the right to change the location and the area of the flat onthe basis of the final sanctioned plans that he may secure from theGhaziabad Development Authority (GDA). You, therefore, need to ascertainwhether the plan to delay/ suspend the construction of the adjoiningbuilding in which you had been assigned the ground floor premises wasoccasioned by the fact that the building plans had not been approved by theGDA or was it on account of commercial reasons assignable to thebuilder-developer.
In the event the block of apartments in which your proposed property waslocated could not be constructed due to non-availability of approvals fromthe GDA, the builder-developer would be liable to refund your money withinterest. This will be, as per the provisions of another clause, whichpresumably has also been incorporated in your `agreement to sell'. Pleasecheck your documents specifically to study the scope and the implications ofthe various clauses incorporated in your `agreement to sell'. If necessary,seek competent legal advice.
While the builder's anxiety to sell the available stock in the adjoiningblock of flats is logical, you are under no obligation to accept the revisedoffer, particularly if the alternate accommodation offered does not suityour needs.
The builder, in such circumstances, should either request you to select analternate property or prepared to refund your money forthwith with interest.He, subject to your specific approval and exclusive option, may also retainthe entire money paid by you as earnest money earning interest (from therespective dates the payment was effected by you) which would entitle you toreceive preferential allotment in the future projects of the builder as andwhen such projects are announced. However, there would be no guarantee thatthe future projects would be offered at the same or even lower prices thanwhat you had contracted to purchase in 1996. Getting release of your fundsat this stage would of course enable you to book alternate accommodationwith another builder at the present day market rates, which are perhaps thelowest in the past five years.
In the event the builder had known for a long time that the project wasgetting delayed, in the interest of `good customer relations' he ought tohave kept his customers advised of the ground realities so that they couldhave initiated corrective action to suit their individual needs and plans.By not doing so, the builder-developer can definitely be sued for deficiencyof service and such deficiency can be ruled upon by the Consumer DisputesRedressal Forum.
Since the amount involved in your case exceeds Rs 20 lakh, you could profferyour complaint directly to the National Consumer Disputes RedressalCommission (NCDRC) and seek its intervention/ directions in the matter. TheNCDRC, in somewhat similar circumstances has already directed the DelhiDevelopment Authority to refund allottees money with interest. So, hopefullyappropriate directions would also ensue in your case.
If desired, you could also approach the Monopolies and Restrictive TradePractices Commission of India and take up the issue of the buildercollecting booking and construction advances in respect of a property thathe had no intention of either building or delivering within the time framespecified in the `agreements to sell'.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.