Homebuyers awarded 20% refund for delay in flat possession | Mumbai news - Hindustan Times
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Homebuyers awarded 20% refund for delay in flat possession

May 15, 2022 11:44 PM IST

NCDRC bench directed the developer to pay an additional amount of ₹25,000 to each of the complainants towards litigation costs.

Mumbai: In a big relief for 14 buyers who purchased flats in Hubtown Sunstone at Bandra east, the developer has been directed to refund 20% of the flat price on account of a three-and-half-year delay in delivery of flats.

The developer contested the complaint, claiming that the project got delayed because of reasons beyond their control (Representational picture) (Pramod Thakur/HT Photo)
The developer contested the complaint, claiming that the project got delayed because of reasons beyond their control (Representational picture) (Pramod Thakur/HT Photo)

The National Consumer Disputes Redressal Commission (NCDRC) recently allowed homebuyers’ complaints about compensation due to the delay in handing over possession. The NCDRC directed Sunstone Developers to pay the 14 homebuyers interest at the rate of 9% per annum on the amount paid by them for the period of delay -- from March 31, 2014, when the possession of ready flats was supposed to be delivered to September 2, 2017, when the developer offered possession of ready flats.

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NCDRC bench of justice RK Agrawal and Dr SM Kantikar on May 4 directed the developer to pay an additional amount of 25,000 to each of the complainants towards litigation costs.

One of the complainants, Nagesh Utekar, had agreed to purchase a flat admeasuring 690 square feet of carpet area on the sixth floor of the proposed building for total consideration of 1.96 crore. The agreement between the parties was executed on March 31, 2012, and under the agreement, the developer had agreed to deliver ready flats by March 31, 2014.

In 2017, Utekar (and 13 others) moved the NCDRC seeking compensation as the developer failed to deliver the flat although he had paid around 80% of the total consideration.

The developer contested the complaint, claiming that the project got delayed because of reasons beyond their control, as the change in Development Control Regulations for the city and SRA policy affected the generation of the Floor Space Index.

Besides, the developer also cited the non-availability of cement, steel and other construction materials and contended that from time-to-time flat purchasers were duly informed of the extended dates of delivery and a deficiency in service.

The developer’s counsel claimed that since the complainants had delayed payment of the balance 20% consideration, they were liable to pay interest at the rate of 24% per annum, as contemplated under the agreement.

The NCDRC, however, refused to accept the developer’s contentions, after noticing that the change in DCR and SRA policy came in July 2014 -- much after the agreed date for delivery of possession, March 31, 2014.

As regards the plea of shortage of construction materials, the commission said there was cogent evidence to support the claim. “Even otherwise,” the NCDRC said, “it is the duty and responsibility of the developer to manage the raw/construction material and the complainants (flat purchasers) cannot be made a victim for the same.”

The commission also rejected the developer’s contentions that the flat purchasers had the option of opting out of the project by seeking a refund of the amount paid by them with interest at 9% per annum.

“After having received a huge amount of sale consideration, the developer cannot take advantage of Clause 19.5 which in our view is also unreasonable, unfair and totally in favour of the opposite party,” the NCDRC bench said.

Observing that the terms of the agreement between the flat purchasers and the developer were “wholly one-sided and unfair to the flat purchasers,” the NCDRC held that the complainants were entitled to compensation on account of delayed delivery of ready flats to them.

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