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Discussions related to Real Estate matters, Real Estate laws, loans, financial queries

Consumer Courts must prioritise Realty Cases

Postby dheerajjain » Sun Aug 18, 2013 9:36 am

Good Article in Hindustan Times today. It calls for Govt. to issue instructions to all Consumer Courts in India to speed track realty cases. Also, calls for quick passing of The Real Estate (Regulation and Development) Bill, 2013 which is pending for many many years. ... 09219.aspx

The Real Estate (Regulation and Development) Bill, 2013, which is expected to pave the way for regulation of the housing sector, has finally been introduced in the Rajya Sabha and referred to the Parliamentary Standing Committee on Urban Development for review. However, it is anybody’s guess as to how long it will take for the bill to become a law and for the fast-track dispute redress mechanism envisaged under the law to become a reality.

Till then, consumer courts offer the best solution for the myriad problems that consumers face in the housing sector. However, given the large volume of complaints against builders, consumer courts should decide these cases on a priority basis. Only then will justice be done. The Union ministry of consumer affairs should intervene on behalf of consumers and urge the apex consumer court to issue directions to all consumer courts.

Earlier, consumers could approach the Monopolies and Restrictive Trade Practices Commission (MRTPC) too for redressal of their complaints against builders. However, the government excluded unfair trade practices from the purview of the Competition Commission of India, which replaced the MRTPC, thereby taking away a valuable redressal mechanism that was available to consumers against builders.

Now, a consumer can approach the CCI only if the builder has a dominant position in the market and has abused that position to the detriment of the consumer. That’s not all, we do not have a law to curb unfair terms in consumer contracts and so there is unbridled exploitation of consumers in the housing sector.

I cite a few judgments, which may be of help to those looking for justice.

The first in the list is of course the order of the Supreme Court in Lucknow Development Authority vs MK Gupta, (CA No. 6237 of 1990 decided on November 5, 1993) wherein it described 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.

In Shri JL Sethi Vs Senior Citizen Home Complex Welfare Society (RP No. 3129 of 2005, decided on August 21, 2006), the National Consumer Disputes Redressal Commission upheld the view of the lower consumer court that a builder, who imposes an interest of 18 per cent on consumers for delayed payment, ought to pay the same rate of interest to the consumers in case of delay in handing over possession.

In The Secretary, Southwestern Railway House Building Cooperative Society Vs K Velayudhan (RP No. 454 of 2011, decided on February 24, 2011) the apex consumer court made it clear that whenever a consumer withdraws from a housing project on account an unfair trade practice or delay on the part of a builder in handing over possession, he should not only get the full refund, but also interest on the amount. A builder cannot refuse to pay interest on such refund pointing to terms and conditions in the agreement signed with the consumer, the commission said.

I must also mention that in the Central Inland Water Transport Corporation Vs Brojonath Ganguly (April 6, 1986), the Supreme Court discussed unfair and unconscionable terms and conditions at length (though in a different context) and made it clear that it will strike down unfair and unreasonable terms in a contract.

Sudhir Thadani: I am tired of waiting for the promised “ready to move in villas” near Rewari and now want my money back. How do I proceed?
Write to the builder, asking for full refund along with compensation. If he does not pay, you will have to go to the consumer court.
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