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Builder can’t bind homebuyers with one-sided contract terms: NCDRC

Calling the deal between the builder and the apartment buyer totally one-sided and unfair to the home buyer, the National Consumer Dispute Redress Commission (NCDRC) says the builder cannot seek to bind the buyer with such unilateral contractual conditions.

In an order passed last month, NCRDC bench RK Agrawal (Chairman) and Binoy Kumar (Member) said: “The terms of a contract will not be final and binding if it is shown that buyers of the apartment had no other choice than to sign in dotted line, on a contract supervised by the builder. The contractual clauses of the agreement of May 8, 2012 are ex facie unilateral, unfair and unreasonable. The incorporation of such unilateral clauses in an agreement constitutes an unfair commercial practice within the meaning of section 2(r) of the Consumer Protection Act 1986, as it adopts unfair methods or practices for the purpose of selling the flats by the builder .”

Deepika Chaudhary Chandra and her husband Arun Kumar (Chandras) filed a lawsuit against Emaar MGF Land Ltd seeking compensation for late delivery of possession of the assigned flat. The couple had booked an apartment in the Palm Terrace Select project located in the village of Badshahpur in Sector 66 of Gurugram in Haryana. Emaar MGF Land had promised delivery of the flat by October 31, 2015. The couple paid Rs 1.69 crore, almost 95% of the total consideration for the sale. However, the promoter did not deliver the possession within the stipulated time. Possession was not given until 2020, a delay of about five years. Although he received stamp duty and other fees, the promoter also did not execute the deed of transfer until July 13, 2021.

“…in our opinion, (this) is a clear case of lack of service on the part of the promoter,” the NCDRC noted, while calling on Emaar MGF Lad to pay, within four weeks, interest on the amount deposited at an interest rate of 8% from October 31, 2015, the scheduled date of delivery of possession, until the actual date of delivery of possession of the apartment to the buyer.

While the case was ongoing, on August 28, 2019, Emaar MGF Land offered the Chandras possession of the apartment subject to payment of arrears. The company sent a reminder on October 3, 2019, asking homebuyers to settle the arrears of Rs22.89 lakh.

After hearing the case, on November 13, 2019, the NCDRC ordered the builder to release possession of the allocated apartment to the Chandras, subject to the purchasers paying the full amount admitted, including value tax. added (VAT) and stamp duty. While the complaint is pending, the Chandras were asked to deposit the disputed amount of Rs11.81 lakh with the Commission.

The NCDRC says the buyer will have to pay the parking fee, the balance of the base sale price and the preferential location fee (PLC) and also delay the payment fee in accordance with the terms of the agreement. However, the advance on maintenance costs will only be applicable from the date of actual possession of the apartment by the buyers, he adds.

While asking Emaar MGF Land to pay 8% interest from the expected date of possession on the deposited amount, the NCDRC also asked the builder to pay a cost of Rs25,000 to the Chandras.

John Smith

The author John Smith