Law on Unfair Trade Practice | Builder insisting to sign on papers which stated that “buyer was receiving villa in full ready condition” even when it was not in a liveable condition: Is builder’s act under ‘unfair trade practice’? NCDRC decides

National Consumer Disputes Redressal Commission

National Consumer Disputes Redressal Commission (NCDRC): Noting unfair trade practice by the builder while insisting the buyers to sign a paper wherein it was stated “that they were receiving possession in full ready condition” which was false, Coram of C. Viswanath (Presiding Member) and Justice Ram Surat Ram Maurya (Member) allowed the complaint of the buyer and directed refund of their amount along with compensation of Rs 1 lakh.

Complainants filed a complaint about directing the OP (Builder) to refund the amount deposited by the complainants along with interest from the date of each deposit till its payment. Compensation was also sought for mental agony and harassment.

Factual Background

Present complaint emerged from the documents attached with it. Builders launched a project wherein the complainant booked a villa and were allotted a Unit. Payment plan was “Construction Linked Payment Plan”. Agreement for Sale and Agreement for Construction were executed between the parties.

Complainants diligently followed the payment plan and deposited money as and when demanded by the builder, but the builder delayed the construction.

In 2017, the complainants were invited to take possession of the villa and on reaching the villa, they found that the villa was not complete in all respect and was not in a liveable condition. On the other hand, the builder was insisting to sign the paper, in which, it was written that they were receiving possession of the villa in fully ready condition.

Complainants did not agree to sign that paper and were disappointed with the attitude of the builder, who was insisting to sign above said paper in the garb of alleged rule of the builder that if they wanted to take key of the villa then they had to sign it.

Complainants sought for refund vide a legal notice, but no reply was given by the builder.

Analysis, Law and Decision

Commission noted that the builder did not raise any dispute that the complainants had committed any default in payment, on issue of demand notice.

According to the builder, the construction was completed in August, 2017, as such, there was delay in construction for more than two years, according to their own version.

Clause-E(2) of Agreement For Construction provides as follows:-

“2. Possession/Handing over Possession in this agreement is limited to the developer obtaining Completion Certificate from the concerned local authority/Project Architect and intimating the purchaser to take possession of the Villa.”

Builder nowhere stated that he had obtained a Completion Certificate. Instead, he argued while relying upon Rule 20 of Tamil Nadu Combined Development and Building Rules, 2019 and argued that “Completion Certificate” was not required for the villa. The said Rules were not in existence in 2017.

The paper, which the builder insisted the buyers sign upon stated that they were receiving the possession of the villa in fully ready condition, in the garb of alleged rule of the builder that if they wanted to take key of the villa then they had to sign it.

In Commission’s opinion, the above was an unfair trade practice.

Offering possession of incomplete construction and without obtaining “Completion Certificate” does not justify the act of the builder.

 Therefore, complaint was allowed with cost of Rs 1 lakh and builder was directed to refund the entire amount along with interest @9% per annum within a period of 2 months.[Suman Kumar Jha v. Mantri Technology Constellations Pvt. Ltd., Consumer Case No. 54 of 2018, decided on 29-10-2021]

Advocates before the Commission:

For the Complainant: Mr Aditya Parolia, Advocate

For the Opp. Party: Mr Sunder Patjoshi, Senior Advocate and Mr. Manish Tiwari, Advocate

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