Law on Property in India

Law on Property in India

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Law on property in India
Law on property in India

Everyone dreams of owning a house in their life. But when we are about to fulfill our dream, some people create problems in the way. Like in the movie mentioned, many of you must have experienced that after paying the amount for a flat the real estate developer refuses to give you possession of the flat. So how will you get possession of your flat?

Recently Supreme court of India passed a landmark judgment regarding the same issue.

Experion Developers Pvt Ltd vs Sushma Ashok Shiroor, 2022

Facts of the Case

  • In this case, a buyer booked a flat for Rs 2.36 crore in Gurugram.
  • Both parties signed the Flat buyer’s Agreement according to which the possession of the flat must be given to the buyer within 42 months after getting all the approvals.
  • In case of delay in providing possession, the flat owner shall provide the buyer with compensation of 2-3% with interest, and if the buyer delays in paying the installment the compensation shall be 12-13% with interest.
  •  More than 42 months passed but the possession was still not given to the buyer.
  • The buyer sends him notice regarding the same to either give him the possession or refund him the booking amount.
  • Upon no reply from the flat owner, the buyer approached the National Consumer Disputes Redressal Commission (NCDRC).

NCDRC asked the real state developer to return the booking amount along with 9% interest to the buyer. The real estate developer challenged the decision in the supreme court.

Issues in Front of the Supreme Court

  1. Was the Flat Buyer Agreement one-sided? Was it an unfair trade practice?
  2. Can the buyer approach NCDRC instead of RERA?

The Supreme court pointed out the vast difference in the clause regarding the compensation when the flat owner fails to provide possession of the flat and when the buyer fails to pay interest. As mentioned in the facts the buyer needs to pay compensation of 12-13% whereas the flat owner needs to pay only 2-3%. Therefore, this is a one-sided agreement concluded as an unfair trade practice; hence, with reference to the Pioneer case, the agreement will be void.

The flat owner denied the jurisdiction of the consumer court in this case. According to him, after the establishment of RERA, the consumer court has no jurisdiction. The court with reference to the pioneer case replied that RERA and consumer court both have concurrent powers i.e., you can approach either one of them. But you cannot simultaneously file a case on both of them.

The supreme court provided that you can ask for 3 types of relief in case of delay in delivering possession of your flat.

  • You can ask for possession along with compensation with interest.
  • You can ask for a complete refund along with interest as compensation.
  • Or you can ask for either of the solutions along with proper compensation.

Pioneer Urban Land and Infrastructure Limited & Anr. Vs. Union of India & Ors., 2019

  • In this landmark judgment by the supreme court, the court discussed the Flat Buyer Agreement in detail. Any flat buyer agreement where the clauses are completely in favor of the flat owner will be declared as a one-sided agreement and an unfair trade practice. And such an agreement will be void. The court also said that there is a need to bring a model agreement to stop the one-sided unfair trade practice by builders and real estate developers.

Can The Buyer Directly Approach NCDRC?

Consumer Forums are special courts for consumers who buy or avail services. Consumer forums are established through the Consumer Protection Act, of 2019. Any customer who falls under the definition of consumer under CPA 2019 can lodge their complaint in forums. Consumer courts are at 3 levels: –

  1. District consumer forum
  2. Hears cases for claims for compensation up to Rs 1 crore at a district level.
  3. State consumer forum
  4. Hears cases for claims for compensation more than Rs 1 crore but less than Rs 10 crore at a state level.
  5. Nation consumer dispute redressal Commission (NCDRC)
  6. Hears cases for claims for compensation of more than Rs 10 crore from all over the country.

For filling a case you need to check the monetary jurisdiction of the consumer court. If you are unsatisfied with the judgment of a forum then you can approach the higher forum. The decisions of NCDRC are challenged in the supreme court.

As in this case, the claim was filed for more than Rs 2.36 crore therefore according to Consumer Protection Act, 2019 the case should be filled in the State consumer forum. But at the time of filling the case Consumer Protection Act, 1986 was applicable. Therefore, the case was filled at NCDRC instead of the state consumer forum.

What is RERA?

RERA stands for Real Estate Regulatory Authority came into existence as per the Real Estate (Regulation and Development) Act, 2016 which aims to protect home purchasers and also boost real estate investments.

Conclusion

If you want to purchase a flat and are about to sign the buyer purchase agreement, do not sign any such agreement without consulting a lawyer. The clauses of the agreement may be one-sided in favor of the real estate developer so you must make sure that the agreement is a valid agreement with no unfair clauses. Also, if your real estate developer is not giving you possession of your flat then you can file a case in RERA or in consumer court.

Feel free to connect with us, for a better understanding of legal concepts!

If still doubts persist, consult legal experts at

https://www.aapkaconsultant.com/legal-opinion-legal-shots

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