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In January 2008, I booked a three-bedroom flat in a multi-storey complex for Rs 58 lakh. The builder promised to hand it over by December 2010, but is now quoting April 2013. He has collected the money. What are my options? It is always good to withhold at least part of the payment till you get possession. Since you have paid the entire amount, please make sure that you do get possession at the earliest. Visit the site and see how far the construction work has progressed and whether the builder is in a position to meet even the April deadline. I would also suggest that you get together with other consumers who have paid for the flats in the same complex and put pressure on the builder to hand over the flats quickly and also pay interest on the money paid by all of you. The rate of interest should be such that it compensates you for the financial loss suffered by you on account of the delay in handing over the flat.
Under the Consumer Protection Act, a consumer is entitled to compensation for a "deficient" service and consumer courts have held that delay in the delivery of a service constitutes "deficiency" in that service. In Lucknow Development Authority vs M.K.Gupta (CA No 6237 of 1990, decided on 5-11-1993) the Supreme Court described such delays in handing over possession as "denial of service" and categorically stated that a consumer who is a victim of such delay is entitled to compensation. Are there any court decisions on the interest one can get from a builder for delayed possession? The builder charged 18 per cent from me for delayed payments but is unwilling to pay me similar interest for delay on his part. In Shri J.L.Sethi vs Senior Citizen Home Complex Welfare Society (RP no 3129 of 2005, decided on August 21, 2006) , the National Consumer Disputes Redressal Commission has dealt in detail with the question of payment of interest to consumers in cases of delayed construction and the percentage of interest that can be paid. In this case, the District Consumer Disputes Redressal Forum had awarded 18 per cent interest on the ground that the builder was charging 18 per cent for delayed payment from consumers. While upholding this, the National Commission quoted two Supreme Court orders: In Sovintorg India Ltd vs State Bank of India, (1999) 6 SCC 406 the Apex Court had held that interest can be awarded in lieu of compensation or damages in appropriate cases. It can also be granted on equitable grounds. The Commission also quoted the order of the Supreme Court in the case of Ghaziabad Development Authority vs Balbir Singh (2004) 5 SCC 65, where it had held that the principle that interest must be granted at the current rate of interest was only applicable where the proceedings were for recovery of debt or damages and did not apply to grant of compensation.
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If the builder does not
pay or if you think that the construction will not be complete even by
April, you have to decide whether you will wait for the flat or get
your money back along with compensation. Either way, you will have to
file a complaint before the consumer court, seeking appropriate
relief. You can also join up with others in a similar predicament
vis-`E0-vis the builder and file a class action suit before the apex
consumer court or the National Consumer Disputes Redressal Commission.