The state consumer disputes redressal commission in Mumbai has ruled that the purchaser of a residential flat has to pay the current market price in case of any delay in construction and delivery of possession of such flat by the builder for reasons beyond the builder's control.
"The principles of fairness and reasonableness require payment of current market price in case of efflux of time and escalation of property price," a two-member bench of the commission, comprising of Justice R C Chavan and member Dhanraj Khamatkar, ruled on August 21. The commission has cited a 2013 Supreme Court judgment while making this observation.
City-based real estate firm Kumar Properties had filed an appeal before the commission against a February 28, 2013 order by the additional district consumer disputes redressal forum in Pune directing the firm to execute a registered agreement and sell one of the flats in its scheme in Dhankavadi Padmavati for the price that was agreed for in year 2002.
Kishor S Kulkarni of Parvatigaon had earlier moved a plea before the district consumer forum against the firm on the grounds of deficiency in service. Kulkarni had booked a flat at the firm's ?Kumar Panchsheel' scheme for a price fixed at Rs 10.41 lakh in 2002. He paid Rs 5,000 booking amount on January 21, 2002 and another Rs 1.50 lakh on April 28, 2003 towards first installment.
However, construction of the scheme came to a halt as the Pune Municipal Corporation (PMC) served a stop work notice to the builder. On January 6, 2005, the builder sent a communication to all those, who had booked their flats, to take back their money. The builder had then not executed any agreement with the customers. After the passage of considerable time, the builder got necessary permissions from the PMC to recommence construction.
Lawyer Sunita Kinkar, appearing for the builder, argued that the firm was ready to allot a flat to Kulkarni at the current value, which as per the ready recknor, worked out to Rs 35.70 lakh. Since Kulkarni had paid Rs 1.55 lakh, which now corresponds to Rs 5.32 lakh as per the inflation, the builder agreed to deduct Rs 5.32 lakh and collect the remaining Rs 30.38 lakh from Kulkarni for the sale of flat. An offer to this effect was made to Kulkarni on June 3, 2014 which was effective for three months.
However, on July 2, 2014, Kulkarni informed the builder that he would neither pay Rs 30.38 lakh for the flat nor would he collect Rs 5.32 lakh from the builder to give up the deal.
Kulkarni, who appeared in person, argued that he cannot be asked to pay any extra price for the flat as per the current market price as he was ready and willing to perform his part of the initial Rs 10.41 lakh deal. Also, he cited an office memo of the ministry of urban development and poverty alleviation in relation to housing building advance rules for purchase of house by a government servant.
The commission, however, observed, "Though the complainant/respondent (Kulkarni) may be a government servant, we do not see as to how the circular would help in resolving the dispute between a person who books the flat and the builder."
The state consumer disputes redressal commission cited the 2013 Supreme Court ruling while observing: "We do not see how the appellant (Kumar Properties) could be held guilty of deficiency in service, particularly, in the context of readiness to provide a flat at current market price after adjusting the deposit made, by suitably increasing it as a proportion of the price fixed and price to be paid now. Also, the appellant had offered way back in 2005 to repay the deposite amount"
The commission ordered that the builder shall receive Rs 30.38 lakh from Kulkarni by September 30 and execute a sale deed in respect of the flat in question and deliver the possession. If Kulkarni fails to pay the amount, then the builder shall pay to him Rs 5.32 lakh within a week from September 30 besides Rs 25,000 compensation that was awarded by the district forum
Article referred: http://timesofindia.indiatimes.com/city/pune/Pay-market-price-if-delay-beyond-builders-control/articleshow/41236589.cms
"The principles of fairness and reasonableness require payment of current market price in case of efflux of time and escalation of property price," a two-member bench of the commission, comprising of Justice R C Chavan and member Dhanraj Khamatkar, ruled on August 21. The commission has cited a 2013 Supreme Court judgment while making this observation.
City-based real estate firm Kumar Properties had filed an appeal before the commission against a February 28, 2013 order by the additional district consumer disputes redressal forum in Pune directing the firm to execute a registered agreement and sell one of the flats in its scheme in Dhankavadi Padmavati for the price that was agreed for in year 2002.
Kishor S Kulkarni of Parvatigaon had earlier moved a plea before the district consumer forum against the firm on the grounds of deficiency in service. Kulkarni had booked a flat at the firm's ?Kumar Panchsheel' scheme for a price fixed at Rs 10.41 lakh in 2002. He paid Rs 5,000 booking amount on January 21, 2002 and another Rs 1.50 lakh on April 28, 2003 towards first installment.
However, construction of the scheme came to a halt as the Pune Municipal Corporation (PMC) served a stop work notice to the builder. On January 6, 2005, the builder sent a communication to all those, who had booked their flats, to take back their money. The builder had then not executed any agreement with the customers. After the passage of considerable time, the builder got necessary permissions from the PMC to recommence construction.
Lawyer Sunita Kinkar, appearing for the builder, argued that the firm was ready to allot a flat to Kulkarni at the current value, which as per the ready recknor, worked out to Rs 35.70 lakh. Since Kulkarni had paid Rs 1.55 lakh, which now corresponds to Rs 5.32 lakh as per the inflation, the builder agreed to deduct Rs 5.32 lakh and collect the remaining Rs 30.38 lakh from Kulkarni for the sale of flat. An offer to this effect was made to Kulkarni on June 3, 2014 which was effective for three months.
However, on July 2, 2014, Kulkarni informed the builder that he would neither pay Rs 30.38 lakh for the flat nor would he collect Rs 5.32 lakh from the builder to give up the deal.
Kulkarni, who appeared in person, argued that he cannot be asked to pay any extra price for the flat as per the current market price as he was ready and willing to perform his part of the initial Rs 10.41 lakh deal. Also, he cited an office memo of the ministry of urban development and poverty alleviation in relation to housing building advance rules for purchase of house by a government servant.
The commission, however, observed, "Though the complainant/respondent (Kulkarni) may be a government servant, we do not see as to how the circular would help in resolving the dispute between a person who books the flat and the builder."
The state consumer disputes redressal commission cited the 2013 Supreme Court ruling while observing: "We do not see how the appellant (Kumar Properties) could be held guilty of deficiency in service, particularly, in the context of readiness to provide a flat at current market price after adjusting the deposit made, by suitably increasing it as a proportion of the price fixed and price to be paid now. Also, the appellant had offered way back in 2005 to repay the deposite amount"
The commission ordered that the builder shall receive Rs 30.38 lakh from Kulkarni by September 30 and execute a sale deed in respect of the flat in question and deliver the possession. If Kulkarni fails to pay the amount, then the builder shall pay to him Rs 5.32 lakh within a week from September 30 besides Rs 25,000 compensation that was awarded by the district forum
Article referred: http://timesofindia.indiatimes.com/city/pune/Pay-market-price-if-delay-beyond-builders-control/articleshow/41236589.cms
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