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NCDRC Order: Builder cant demand more than what is agreed in Contract

Postby dheerajjain » Mon Nov 24, 2014 10:57 am

Please see RP/2447/2014 on NCDRC website (also attached)



(Against the Order dated 05/05/2014 in Appeal No. 9/2014 of the State Commission Karnataka)
BANGALORE - 560054
BANGALORE - 560 043


For the Petitioner : Mr.J.P.Sengh, Sr. Advocate along
with Mr.Dilip Singh and Mr.Sumit Batra, Advocates

For the Respondent :

Dated : 01 Aug 2014
Above noted revision petitions are being disposed of by this common order, since both petitions arise out of order dated 5.5.2014, passed by Karnataka State Consumer Dipsutes Redressal Commission, Bangalore (for short,tate Commission in (Revision Petition Nos.09 & 10 of 2014) filed before the State Commission. 2. Brief facts are, that Respondents/Complainants filed separate Consumer Complaints before Principal District Consumer Disputes Redressal Forum, Urban District, Bangalore (for short,istrict Forum on the ground that in the year 2010,Petitioner/Opposite Party offered Flat/Apartment being built by them at total cost of Rs.14 lacs and they had paid requisite amount. The delivery of the flats was to be given on or before 30.05.2013. However, petitioner failed to complete the construction of the flats in time. Now, the petitioner has issued letter to the respondents stating that due to increase in cost of material and labour charges etc, base price of the apartment has been revised from Rs.14,00,000/-to Rs.22,51,000/-. Therefore, demand of difference of Rs.8,51,000/- plus taxes, amounts to deficiency in service. 3. Petitioner in its written statement took the plea that there has been escalation in the cost of the flats which is beyond control of the petitioner which cannot be brought under the scope of Consumer Protection Act, 1986 (for short, ct.Further, petitioner has given the details with regard to the escalation of cost in flats. 4. During pendency of the consumer complaints, both parties stated before the District Forum that they intend to amicably settle the matter. For the purpose of settlement, they sought appointment of a Local Commissioner to facilitate the court proceedings. Accordingly, District Forum vide its order dated 26.2.2014,directed the parties to file necessary application for appointment of the Local Commissioner. Thereafter, respondent filed an application under Section (13)(4)(iv) of the Act for appointment of the Court Commissioner to verify the genuinity or veracity of the claim amount made by the petitioner. The District Forum, invited objections from the other party. 5. Later on, respondent sought withdrawal of the application for appointment of the Local Commissioner. The District Forum vide its order dated 12.3.2014, dismissed the application for appointment of Local Commissioner as not pressed. 6. Thereafter, petitioner filed application under Section 13(4) (iv) of the Act and under Order 26 of the Code of Civil Procedure for appointment of the Local Commissioner. Respondent filed objections to this application. 7. The District Forum vide order dated 10.4.2014, allowed the application passed following directions; n the light of the above discussion, the application filed by the applicant/OP is hereby allowed. Parties are directed to give name of Commissioner from the Government Agency along with the memorandum of instruction to facilitate the work of the Commissioner. It is the burden lies on the OP to prove their case and hence OP is directed to meet the expenditure of Commissioner work on production of his report and the bill including all incidental expenses 8. Being aggrieved, respondents filed revision petitions before the State Commission, which allowed the same. 9. Now, petitioner has come before this Commission by way of the present revision petitions. 10. We have heard the learned counsel for the petitioner and gone through the record. 11. It has been contended by learned counsels for the petitioner, that initially respondents themselves had filed application for appointment of the Court Commissioner. However, later on they withdrew the same. In view of Section 13(4)(iv) of the Act, the State Commission ought to have appointed the Court Commissioner, in order to expedite the proceedings pending before the District Forum. Furthermore, the order for appointment of the Court Commissioner is in the interest of both parties, as it would help in speedy disposal of the cases. 12. Present revision petitions have been filed against the impugned order passed by the State Commission in revision petitions filed before it. It is well settled that no second revision lies against a revision. 13. Be that as it may, as observed above the defence of the petitioner is, that there has been escalation in the cost of raw material and other things etc. and that is why there has been increase in the cost of construction of the flats which are to be allotted to the respondents. 14. Now as to whether there has been any increase in the cost of the raw materials, labour and other charges etc, the onus to prove these facts lies only upon the petitioner. The petitioner alone has to discharge this onus by producing evidence to this effect, before the District Forum. By seeking appointment of a Court Commissioner for this purpose, the petitioner just wants to shift that burden of proof, which lies upon him only. That burden of proof cannot be shifted through appointment of any Court Commissioner. 15. The State Commission in this regard in its order has observed; . It is argued by the learned counsel for the revision petitioners that both the parties are bound by the terms of the agreements.Of course, the main intention of the Parliamentarian/Legislature in enacting thissocio-legislative enactment is to help the consumers and to dispose of the complaints in a speedy manner. Of course, there is no bar to file the applications for appointment of Court Commissioner. When a particular defense has been taken by the respondent/ Opposite Party before the DF with regard to the alleged escalation of cost of building materials and labour charges, it is for the Opposite Party to prove with cogent evidence. The DF has made an observation in page-9 of its order that, when the DF has power of discovery and production of any document or other material objection producible as evidence, either party can move for appointment of Court Commissioner to record the evidence of witnesses who are unable to attend the Commissioner to tender cross-examination and also to know the position of the apartments if any constructed or any deficiency of service in constructing the apartments by the builder. Therefore, the DF has erroneously comes to the conclusion that,Court has to appoint a Commissioner to collect the materials on behalf of the Opposite Party to prove its defense, which is improper and incorrect. 9. It is argued by the revision petitioner in R.P.No.10/2014 that if one of the complainant file an application for appointment of Commissioner which has been withdrawn subsequently, it is not binding on the complaints filed by the other members of the respondent. Therefore, the observation made by the DF that, one of the complainants who filed a similar I.A. through his advocate for appointment of Commissioner to ascertain the escalation price about the flat in question is not a ground. He has relied on several decision rendered by the Honle National Commission in R.P. No.624/ 2007, in A.No. 1061/ 2005 by the AP State Consumer Commission, Hyderabad),R.P.No. 2002 / 2005 in Appeal No.171/1997 by the State Consumer Commission, Uttar Pradesh, the decision rendered by the State Commission, Maharashtra, Mumbai in C.C.No.12/ 2005. He has also relied on the order passed by this Commission in Appeal No.1029/ 2012 wherein it has been held that, when once the Opposite Party has received the value of the flat, it is incumbent upon the Opposite Party to complete the project, deliver the flat, register the flat and put the complainants in possession till then complainant will get recurring cause of action and also entitled to seek compensation. It is a well settled law that, when parties entered into an agreement of sale and the terms and conditions incorporated, such an agreement is binding on both parties. Either party is not entitled to deviate with such terms and conditions. It is not the duty of the Commission to get the evidence on behalf of both parties. The learned counsel for the petitioner in R.P.9/20014 and also the revision petitioner party in person in R.P. No.10/2014 have rightly contended that, the cost of the land was also increased to the extent of 300%. Therefore, when a builder entered into an agreement, it is its bounden duty to strictly comply with the terms and conditions of the agreement and is expected to execute the registered sale deed and deliver possession of the flats on the agreed dates. On failure to do so, the parties are entitled to enforce the terms and conditions of the agreement.Therefore, in our opinion, the DF erroneously comes to the conclusion in allowing the applications filed by the respondent/Opposite Party. It is for the respondent/Opposite Party to prove its case by examining itself and through its witnesses. Accordingly, we pass the following: ORDER Both the Revision Petitions are allowed. The order dated 10.04.2014 passed by the Addl. DF Bangalore in Complaint Nos. 1730/2014 & 1733/2013 connected with other cases is hereby set aside. However, the DF is directed to record further evidence of both parties if any, by receiving the documentary evidence, additional documents if any and dispose of the cases expeditiously on priority basis 16. Under section 21(b) of the Act, this Commission can interfere with the order of the State Commission where such State Commission has exercised jurisdiction not vested in it by law, or has failed to exercise jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity. 17. We are in full agreement with the above reasonings given by the State Commission. The State Commission has neither committed any infirmity or illegality nor there is any jurisdictional error, in passing of the impugned order. 18. Accordingly, present revision petitions stand dismissed. 19. No order as to cost.


This order of NCDRC can be very helpful to buyers as it says Builder Can't demand more than what was agreed in Contract.

News was also published in yesterday's Hindustan (attached)
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