CONSUMER AS KING
Builder pays for not keeping promise ……..Jehangir B Gai
Subject: Can a builder unilaterally change the flat or shop allotted?
Backdrop: Builders often revise their plans and submit the same to the local authorities. This is sometimes done without informing the affected persons with whom agreements have been made to sell the flats or shops. Consequently, the location of the flat or shop in the building changes due to renumbering in the revised plans. Can a purchaser demand a refund in such a case?
Builders also lure prospective buyers through attractive
brochures promising various facilities and luxuries. Such marketing gimmicks help the builder charge a higher rate. But when possession is given, the consumer finds various amenities missing. Can he demand a refund? These issues have been decided by the National Commission in the case of M/s Madan Builders v/s R K Saxena in Appeal No 411 of 2004 decided on December 5, 2008.
Case study: Madan Builders had issued a press advertisement in April 1989 regarding the construction of a business complex in Gurgaon. Various attractive promises had been made in the brochure. So, R K Saxena booked two shops in the joint names of himself and his wife. The shops were numbered G-50 and G-51 on the first floor of the complex, Laxmi Bazar.
Saxena paid 95% of the price amounting to Rs 2,27,852, in instalments up to January 1992. When the remaining 5% was sought by the builder, Saxena refused to pay because the shopping complex was incomplete and the amenities promised had not been provided, viz glass capsule lifts, 24 KVA standby generator and parking space for 400 vehicles. Moreover, the shops they had booked had been unilaterally and arbitrarily sold to a third party and, in lieu, the builder allotted Saxena two other shops. Feeling cheated, Saxena filed a consumer complaint in 1999 before the Delhi State Commission, alleging deficiency in service and unfair trade practice.
The builder objected to the complaint filed by Saxena as his wife had not been joined as co-complainant despite the shops having been booked in joint names. The builder also claimed that the complaint was time-barred.
On facts, the builder claimed that there was no change in the location of shops originally allotted to Saxena as the same shops, G-50 and G-51, had been renumbered as G-38 and G-39 on account of revision of the building plan. As for the lifts, the builder claimed that no assurance had been given that the lift facility would be provided for the ground or the first floor. Further, only one lift had been installed as the occupancy was less than 50%.
Also, glass capsule lifts could not be provided as those were not approved by the local administration. The builder claimed that the 24 KVA standby generator had been provided and that ample parking space for more than 1,000 vehicles was available around the complex in the open.
The State Commission ruled that the preliminary objections of the builder were not sustainable as the complaint had been filed by Saxena for himself and on behalf of his wife. On limitation, it held that the builders objection was devoid of merit as the complex was still incomplete and so the cause of action was not barred by limitation.
On merits, the State Commission observed that at the time of booking the builder had painted a very rosy picture to lure gullible persons to invest their hard earned money in the project. The representations made regarding the lift and parking facility had not been fulfilled. The unilateral change in the location of the shops without the consent of the purchaser was held to be an unfair trade practice. Hence, Saxena was justified in refusing to take the alternative shops allotted to him and in demanding a refund of the amount deposited by him together with interest and compensation.
The builder appealed to the National Commission, which concurred with the findings of the State Commission and upheld the order to refund the amount of Rs 2,27,852 along with 12% interest and further Rs 25,000 towards compensation and costs.
Impact: Builders would do well to make promises they can keep rather than misrepresent facts to cheat the consumer.
(The author has won the Govt of Indias National Youth Award for Consumer Protection. His e-mail is jehangirgai@indiatimes.com)