Landmark Judgement by consumer court against property builder

Judgement against builder for delayed possession flat

Atul Kinra, husband of the complainant, entered into a contract for the purchase of a plot measuring 300 sq. yards with the Respondent and paid a substantial amount for it. However, later the Respondents have failed to transfer the said plot provisionally allotted another plot and Atul Kinra paid Rs. 38,77854 of Rs. 40,50,354 and the leftover amount was discounted for the reason of timely payment. The respondent in the plot buyers agreements (20.06.2007) promised to transfer the property by two years but not later than 3 years (19.06.2010). But even after 5 years, the husband of the complainant could not find much development has taken place.

Atul Kinra was later offered another plot which was accepted by him and the necessary changes were made in the Plot Buyers Agreement. The plot was allotted only on paper and no physical possession was transferred. The Respondent had also failed to take the permission from the requisite authorities. Atul Kinra also paid the requisite fee to transfer the re-allotted property to his wife. Neeraj Kinra on 07.08.15 . Neither was the Respondent ready to transfer the possession nor to Refund the original amount.

The complainant filed the present Complaint before the State Commission, U.T. Chandigarh asking for Refund along with interest and compensation.

compensation, in the sum of Rs.3,00,000/- for causing mental agony and harassment

The Respondent challenged the said complaint on the following grounds:

  • Complainant is not a Consumer as the plot was transferred to her by her husband and wan not an original party to the Contract.
  • Time is not the Essence of contract in the present case.
  • As the Respondents were ready to transfer the plot therefore if the refund is claimed the forfeiture clause would be applicable.
  • No jurisdiction of the Commission on the ground of existence of Arbitration Clause.

The Commission rejected the aforesaid pleas on the ground:

  • Complainant is the Consumer as the requisite fee was paid and title of the Complainant was accepted.
  • The Plot Buyers Agreement expressly provided the maximum period of 3 years which made time to be the essence for the expressly of the said deed.
  • As the possession was offered too late, therefore, the Complainant was not bound to accept it and was required to be paid the interest @15% for the reason that had it been invested in some other business, the Complainant could have earned the substantial amount of return. The Commission also ordered the payment of Compensation for the mental agony and harassment caused.
  • Existence of Arbitration Clause is no bar to filing the Complaint in the Consumer Forum.

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