Can't Take Home Buyers For A Ride, Court Warns Developers

A builder-buyer agreement is often seen as one-sided, mostly tilted in favour of the developer. While a default or delay on the part of the developer attracts minimal nudge, a similar act or omission by the buyer attracts harsh penalties.

This anomaly has been around for long but little has been done to remove it. Even consumer forums, expected to bring respite to buyers, were found ill-equipped to deal with the the unscrupulous ways of some developers who circumvent the law.

A similar case happened recently when a resident of Ghaziabad wanted to file a case against a developer. The plaintiff had approached the police station to file an FIR but the request was turned down. Subsequently, he approached the magistrate's court but his plea, for the alleged offences of criminal breach of trust, and cheating, was turned down here as well. Later, he filed a petition challenging the magistrate's order of November 2014.

CBI Special judge Anju Bajaj took cognizance of the issue and directed the Connaught Place Station House Officer to file a case. The court made certain observations on the real estate sector in this regard.

During the proceedings, the counsel representing the developer submitted that the case was pending before the State Consumer Commission, in the execution stage, so any further litigation before a different forum was uncalled for. But the sessions court rejected these arguments, stating that the grievances of the complainant raised were of a different nature and the execution proceedings pending before the State Consumer Commission addressed a separate issue.

The case:

• The developer released an advertisement in a newspaper. The buyer applied for a 350 sq m residential plot in Faridabad. He paid Rs 22.38 lakh towards the cost of the plot.
• Later, the buyer was intimated about certain changes to his property. The builder proposed to allot Mithun an alternative plot of 302 sq mtrs, without his consent.
• The buyer approached developer and asked them to give an option so that he might select a plot of 350 sq m, as had been agreed upon. He also filed a complaint before the State Consumer Redressal Commission.
• Subsequently, the builder and the buyer arrived at a settlement, where on a further payment of Rs 22.23 lakh by the buyer, the builder was to give him a plot of 335 sq m.
• Even this settlement was not respected by the developer and even after the buyer paid an additional Rs 22.23 lakh, the builder failed to perform his part of the obligation. The buyer visited the project site in December 2013 but was appalled to see that neither any demarcation of the plot nor any sort of development work had been performed at the site.

Thus, the buyer was repeatedly made to suffer at the hands of the builder. Taking a note of this, the judge said consumer courts were established as an alternative, additional forum where a person could get his grievances addressed; they did not in any way extinguish the jurisdiction of the regular civil or sessions courts.

The judge also observed that builders were dominating and exploiting buyers by not giving them timely delivery. The failure of builders to meet their contractual liabilities should not only attract fines but also criminal liability, which is seldom done. The law-enforcement agencies and the police should be instructed to entertain genuine cases.

Though the Real Estate (Regulation & Development) Bill, 2016, is expected to put an end to many of these discrepancies, until it has been implemented, the judiciary will have to play a crucial role to safeguard consumer interest.