Skip to main content

Developer can’t cancel agreement unilaterally: Panel

The state consumer disputes redressal commission has held that a builder or property developer cannot unilaterally terminate a registered agreement between him and the buyer of a flat.

Dismissing an appeal by a Pune-based builder, a two-member bench of the commission, headed by S A Kulkarni, also held on June 12 that lopsided agreements favouring the builder more and going against the provisions of the Maharashtra Flat Ownership Act cannot be legally sustained.

The matter is related to a community housing scheme developed at Dhanori along the Vishrantwandi Road by Sankalpa Constructions, a partnership firm headed by Prabhakar Bhosale and Vandana Bhosale. The company entered into the position of service provider by undertaking construction activity of small tenements for distribution among members of a particular community. It signed agreements with individual members of the scheme and registered the same.

 One of the members, Haribhau J Ghode of Bhairavinagar, who filed a complaint with the Pune district consumer disputes redressal forum, was required to pay Rs 1.50 lakh remainder of the purchase amount for the tenement in the scheme.

However, citing an alleged default on the part of Ghode, the construction company issued a letter to him in 2009 unilaterally cancelling the agreement. He was also asked to exit the scheme by collecting the money he had paid till then. Ghode moved the district forum alleging deficiency of service on the part of the builder despite his willingness to pay the balance consideration.

On June 5, 2014, the district forum passed a decree in favour of the complainant. Aggrieved by this, the construction company moved the state consumer commission arguing that the decree was ex-parte and no defence was considered by the trial forum, thereby, the company lost an opportunity to contest the complaint.

In its ruling, the commission bench, which also included member Uma S Bora, observed, "Undisputedly, the company, as the builder/developer, executed a registered agreement with the requisite terms and conditions mostly favourable to them and may be against the provisions of the Maharashtra Ownership Flats Act, 1963. However, the company forgot that such terms and conditions would not hold any water if they are opposing the provisions of law."

 Article referred: http://timesofindia.indiatimes.com/city/pune/Developer-cant-cancel-agreement-unilaterally-Panel/articleshow/47714327.cms

Comments

Post a Comment

Most viewed this month

Right of pre-emption under West Bengal Land Reform Act

In Rabindra Nath Kundu & Anr vs Sudhir Hira, Bijoy Krishna Hira being the owner in the suit plot, gifted to Santosh Kumar Hira demarcated 11 decimals of land vide deed of gift dated 27.4.2004 and the latter sold 9 decimals out of 11 decimals of land to Sudhir Hira the preemptor/opposite party no. 1 and well demarcated 1.65 decimals of land in the said plot along with several other plots were sold, transferred and conveyed to the preemptees/petitioners herein by a registered deed of sale dated 10.8.2010, the subject matter of preemption. It is argued on behalf of the preemptees that  the present opposite party no. 1/preemptor Sudhir Hira has no relationship of co-sharership with Santosh Kumar Hira opposite party no. 2 as the demarcated portion of land has been purchased. It is settled principle of law that partial preemption is not permissible and this was what the view adopted by this Hon'ble High Court is Surendra Vs. Abhimannu reported in (1980) 1 Cal LJ 135 whe...
Post a Comment
Read more

Merits and the terms of contract are irrelevant for invoking of the bank guarantees

In Sabarkantha Annuity Pvt. Ltd. Vs. NHAI and Ors, the Petitioner filed before the Delhi High Court  petition under Section 9 of the Arbitration and Conciliation (Amendment) Act, 2015 with a prayer that, Respondents be restrained from acting upon the letter dated 15th September, 2017 or from invoking the Bid securities of the Petitioner to the tune of Rs. 10.93 Crores and also restraining the banks from honouring the invocation of said bank guarantees on behalf of Respondent No. 1 acting in terms of letter dated 3rd November, 2007. Petitioner has relied upon Clauses Nos. 9.1.1, 9.1.2 and 4.3 of the agreement dated 28th April, 2017 entered into between the parties to say the claim for damages since is not a claim for a sum presently due and payable and the respondent would be entitled to damages only on proof of loss, per Clause 4.3 of the agreement and hence is not entitle to the entire sum of bid security.  The Court found that Clause No. 9.1.2 speaks of an exclusiv...
Post a Comment
Read more

Supreme Court clarified on how to determine if an allegation of fraud falls under “Fraud Exception” to Arbitrability

In AVITEL POST STUDIOZ LIMITED & ORS. vs HSBC PI HOLDINGS (MAURITIUS) LIMITED, the Supreme Court was hearing an appeal from the interlocutory judgment and order passed in the appeal under section 9 of the Arbitration and Conciliation Act, 1996 by the Bombay High Court in a dispute between HSBC and Avitel India. HSBC had alleged that the Appellants had committed fraud by siphoning off the funds provided by them. As the agreement entered into by HSBC and the Appellants contained arbitration clause, HSBC approached the Singapore Arbitration Centre and the arbitration committee so formed executed award in favour of HSBC who filed application before the Bombay High Court for execution of the award. The Appellants contended objected to the award on various grounds and further argued that as fraud has been alleged, the dispute cannot be arbitrated.  The Supreme Court has held that “serious allegations of fraud” as a ground for exemption from arbitral proceedings arise only if either o...
Post a Comment
Read more