Consumer panel says buyers denied possession
of homes should be compensated by builder
Apartment owners who have not been given possession of their flats within a stipulated time, can take heart. In a landmark order, the National Consumer Disputes Redressal Commission recently directed builders of such apartments to compensate buyers at current market rates.
The national commission panel of presiding members KS Gupta and PD Shenoy upheld a state commission order on an appeal by Asiatic Estate Developments. The state panel had directed that if a particular flat owner had been denied possession of an apartment he had fully paid for, he was entitled to compensation at the prevailing market rates.
Interpreting the order, advocate Vinod Sampat said, “The builder can provide an alternative flat if the flatowner agrees, or gives him the market value for a similar flat in the neighbourhood.”
Calling the order a “welcome” precedent, consumer activist Jehangir Gai said this will help several people who are still waiting to take possession of their flats. “In case the builder refuses to abide by the ruling, he could be jailed and fined,” Gai said, citing Section 27 of the Consumer Protection Act which slaps a fine of up to Rs 10,000 and a jail term of up to three years for non-compliance with a consumer court order.
Section 25 also provides for attachment of a non-compliant builder’s assets, to recover the amount due from him, Gai added.
The original complaint was filed with the state commission by Shamsunder Paliyenkar, under Section 21 (b) and 2(1) (g) of the Consumer Protection Act. Paliyenkar alleged Asiatic Estate Developments had not delivered the flat he had fully paid for. The state commission ruled he should be given an alternative flat or compensation at the current rates, but the builder refused and appealed to the national panel. The panel dismissed the appeal and ordered the builder to pay Paliyenkar.
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