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Unfair to make homebuyers wait indefinitely for possession, directs developer to refund money: National Commission.

Alok Kumar Vs M/S. Golden Peacock Residency
National Consumer Disputes Redressal Commission New Delhi Consumer Case No. 1315 Of 2018
Bench: J R.K. Agrawal, President and M. Shreesha, Member
Decided On: 6th September, 2019
Brief facts of the Case:

The National Commission in the case of Alok Kumar v. M/S. Golden Peacock Residency Private Limited & Anr., has held that purchasers cannot be made to wait indefinitely for possession of building unit, and directed real estate developer to refund Rs. 4.12 cr. with interest to the homebuyer for failing to handover the possession his flat in their project ‘Michael Schumacher World Tower’, in Gurgaon. The Apex Consumer Commission noted that the construction is yet to be completed after a lapse of more than six years from the date of booking.
In the instant case, the complainant Alok Kumar was residing in Tokyo, Japan and was looking for an accommodation in India, when he came across the Developer’s advertisement of a residential project “Michael Schumacher World Tower” in sector 109, Gurgaon. After being lured by the advertisement, he booked an apartment in the residential project in 2012, and paid a total amount of Rs. 4,12,98,926/- by 2015. Alok Kumar also obtained a home loan of Rs. 2,61,28,926/- @ 10.10% per annum in order to make the payment.
According to the Flat Buyer’s Agreement executed between the Developer and Alok Kumar, the possession of the apartment was to be delivered within 36 months with an additional grace period of six months from the date of execution of the Agreement, which ended on 19 August 2016.
However, in 2015, the construction work had stopped, therefore, the homebuyer approached the Developer whereby he was informed that the work had slowed down since the contract with Homestead Infrastructure, the construction company, stood terminated. The Homebuyer, Alok Kumar was assured that a new construction company would complete the balance work and he shall receive the possession in terms of the Agreement.
To the shock of the Homebuyer, the construction work wasn't completed even till 2018 when he visited the site. The exact date of possession was not given by the Developer, even after the passage of 6 months since the extended date. Disappointed from all this, the Homebuyer issued a legal notice to the Developer as well as the construction company, seeking the exact date of possession of the Apartment, but the same was reverted back with postal remarks "refused" and "left".
Unable to get any effective response from either the Developer or the construction company, Alok Kumar approached the National Commission in seeking refund of money paid for purchasing the apartment.
The NCDRC, after consideration of all the facts held that the contractual terms of the Agreement ex-facie one-sided, unfair, and unreasonable. Thus holding such one-sided clauses in an agreement constituted an unfair trade practice as per the Consumer Protection Act, 1986. The Commission also observed that the Homebuyer Alok Kumar could not be made to wait indefinitely for possession of the unit, as the construction is yet to be completed, even after a period of more than 6 years has lapsed from the date of booking.
The Commission referred to the judgment in Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, II (2009) CPJ 34 (SC) wherein the Apex Court held  that the Complainants cannot be made to wait indefinitely for possession of the unit, as the construction is yet to be completed even after a period of more than 6 years has lapsed from the date of booking.”
In view of the above, the Developer was directed to refund Rs. 4,12,98,926/- with interest to Alok Kumar, till the date of realisation. The NCDRC Bench said that the interest was awarded for the interest paid by the Homebuyer to obtain the home loan, and for also undergoing 'mental agony and monetary loss'. Furthermore, the Commission also imposed fine of 25,000/- on the Developer.

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Divya Patwal


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