To be noted, builders are amenable under Consumer Protection Act, 1986.
As per a landmark decision passed in 1993 in the case of Lucknow Development Authority vs. M.K.Gupta, the Honourable Supreme Court of India passed a judgement stating that “all builders/contractor(s)/all concerned authorities of any State engaged in Housing Construction activity in any manner are amenable to Consumer Protection Act, 1986 for any act or omission relating to housing activity such as- delay in delivery of possession, non-completion of construction within the stipulated time, defective and faulty construction and more.
Clearly stating, the builder or construction company engaged in the act is providing service to the consumer. Any delay in the service or loss to the consumer makes them eligible to get compensated monetarily. The judgment states the fact that a builder who constructs a house or hires the services of a contractor to develop a property is engaged in the act of providing service to his customer, and for which he is getting monetarily compensated.
This makes him a service provider and hence liable under the clauses of Consumer Protection Act, 1986.
Complaint under RERA
Although RERA is a central law, its implementation will depend on state governments as real estate is a state subject.Most of the states have now notified their own versions of RERA Act and have been implementing the enacted laws.
Some of the states like Maharashtra and Karnataka have already launched their respective RERA portals for the benefit of all stakeholders i.e., Real estate builders, Property Agents and Homebuyers.
Issues like delay in property possession, default on design and construction parameters, mismatch of space in the guise of floor area & carpet area, the list of woes for home buyers seems to be endless and if a buyer has faced any fraud in part of the builder regarding almost anything under the sun, a complaint can be registered with the Real Estate Regulatory Authority for that particular state with help of a good property law lawyer in India .
To protect the interest of the consumer, the International Consumer Rights Protection Council has laid down certain rights for the consumer. Following are the powers given to a consumer on the grounds of which they can file a case against a builder:
Non-execution of relevant sale agreement despite having received a substantial advance amount
- Non-issuance of copies of all relevant documents viz.; development agreement, power of attorney, sanctioned plan (by concerned Regional Authorities), the specification of construction materials/design as per sanctioned plan and any other relevant documents
- Charged higher than the agreed amount
- No issuance of proper receipt(s) against the paid amount
- Poor quality construction
- Delivering of a house not complying with agreed specifications
- No free parking space on the premises
- Did not form a co-operative housing society and handed over to members
- Non-provision of water storage tank
- Non-provision of proper ventilation and light
- Delayed possession beyond the stipulated time limit
- Not obtaining a completion certificate from the concerned registered (by the authorities) architect
- Non-issuance of Occupancy Certificate at the time of delivery of respective flats/house to its occupants.
Different Forums under separate Acts
Competition Commission of India (CCI)
A buyer can file a complaint with CCI if the builder is using his dominant position to suppress buyer’s demands or for their disadvantages. The complaint can be filed against the abuse of dominant position as per the Competition Act, 2002.
The allottee can also file a criminal case against the builder for cheating, breach of the agreement and not attend to the grievance under Indian Penal Code, 1860. The buyer can issue a notice to the builder and if the notice remains unanswered; buyer can approach the criminal court.
Arbitration can only take place if there is a clause of arbitration, Arbitration and Conciliation Act, 1996. in the builder buyer's agreement.
Filing a suit in civil court
If the developer has breached the clauses of the sale agreement, the homebuyer can approach the civil court through a real estate advocate in India and file the petition for damages caused or even the refund of the amount along with the interest under Code of Civil Procedure, 1908.
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