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Builder to pay Rs 40 lakh for flouting development deal

The Maharashtra State consumer disputes redressal commission in a significant order held that not delivering flats under a development agreement to a landowner amounts to deficiency in service and require the developer to either hand over possession of the flats or compensate for the loss. The State commission on Tuesday set aside a 2011 order of a Sangli district forum and directed a developer to pay Rs 10 lakh, the price of the flat, each to four persons within two months or with 9 % interest if paid later.

A district forum passed a similar order in connection with a flat in Powai.

In the order passed by State commission president Justice R C Chavan and member Dhanraj Khamatkar, it said since no flats were available the developer was directed to pay the price of the flat as compensation.

The case dated back to a development agreement of 2004 between co-owners of a land with Balaji Construction in Sangli to construct a residential and commercial complex and hand over six flats of 450 sq ft super built-up area to the land owners Anusayabai Sakate, Pramod Sakate, Mandakini Dethe, Vilasini Chopade, Suhasini Lokhande and Vinod Sakate and an amount of Rs 3 lakh to mother of the co-owners. The developer handed over only two flats and hence the dispute arose.

The developer did not appear before the district forum nor did he appear before the state commission despite being served. The district forum had dismissed the complaint against the developer since the flats were no longer available.

The commissions said the developers "miserably failed to handover possession of the flat.'' It amounts to deficiency in service it said and added, "even if the flats were unavailable, the District Forum should have granted compensation—the value of the land as per the ready reckoner. It failed to take into consideration this important fact.''

In the second case, filed thorough the Consumer Welfare Association of India, Kalwa resident had accused Powai Housing Development Pvt Ltd of not handing over a flat booked in 1983. The flat buyer S B Dhas, alleged that he had booked the 520 square feet flat in an upcoming building and paid Rs 26,000 in five installments. 15th May, 2002. Dhas however, received a letter on May 15, 2002 telling him that the building was not constructed due to litigation pending before the Bombay High Court since 1993. When he sought a refund, he got no response from the construction company. Dhas then filed the complaint before Central Mumbai District Consumer Disputes Redressal Forum in 2010.

Granting his plea for a refund with nine percent interest from the date of the last payment in 1986, the form ordered the company to pay him a compensation of Rs 1.05 lakh. "The fact remains that the complainant is deprived from his flat due to litigation. The Opponent received payment from the complainant. The Opponent is responsible for the litigation. Therefore, the Opponent is liable to pay compensation to the complainant for the suffering of the complainant," the forum said.

 Article referred: http://timesofindia.indiatimes.com/City/Mumbai/Builder-to-pay-Rs-40-lakh-for-flouting-development-deal/articleshow/38585911.cms

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