The Courts in India has recently witnessed a surge in the number of complaints filed against the Developers. The developers have relentlessly ignored the demands of the buyers and have acted completely insensitive towards their interests .Soaring property prices, non-delivery of possession, faulty constructions and non-performance of contract by the developers are some of the common issues that are being faced by the consumers.  Home buyers are becoming more emboldened to take on the might of real estate developers as they notice that the courts are taking a strict view on cases of fraud, cheating and untimely delivery of flats against builders.

The National Consumer Dispute Redressal Commission received over 1,700 housing related cases in 2014-15, vis-à-vis a few hundred cases in the previous years. A search on the Delhi High Court website revealed more than 40 cases pending against real estate developer Unitech Ltd and the website of the National Consumer Disputes Redressal Commission (NCDRC), showed 929 entries on searching for Unitech.1 Also, a group of more than 50 homebuyers has approached the Maharashtra State Consumer Disputes Redressal Commission against DB Realty over delay in delivery of apartments at the developer's project DB Ozone in Mumbai. Another group of about 200 homebuyers at the same project is in the process of moving the National Consumer Disputes Redressal Commission against the builder.  And a lot more similar complaints against other developers have been received by the National Consumer Disputes Redressal Commission in the recent years.

The Supreme Court and the National Consumer Dispute Redressal Commission has recently passed strict directions against the faulty Developers and ruled in favor of the aggrieved consumers. Some of the significant orders have been discussed below.

  • The Supreme Court recently directed the builder in Anupam Chakroborty and anr. Vs.Supertech Ltd &ors. to pay 10 per cent of invested money per annum as investment returns to people who booked houses in its Noida Project and to clear any arrear within four weeks. The Hon'ble Court quoted ""You sink or die, we are not concerned. You will have to pay back money to homebuyers. We are least bothered about your financial status".2
  • Similarly, the Court in Sahara India Commercial Corporation Ltd. Vs. Sahara Grace Consumer Grievances Association case, asked Sahara India Commercial to deposit Rs3.5 crore to pay back investors who had bought flats in its Gurgaon project but did not receive possession on time.
  • The Supreme Court has also asked real estate major DLF to hand over 50 apartments to buyers in Panchkula near Chandigarh by November this year and directed the developer to pay the buyers 9 per cent interest from 2014 for delay in giving them possession of their flat.
  • The National Consumer Dispute Redressal commission in Naveditta Dhawan Vs. United Limited.3 passed an order directing that interest at the rate of 15% per annum shall be paid by the builder to the Complainant from the date of promise of possession  till the possession is delivered to the Complainant. It provided a 6 month deadline to the builder for the delivery of possession and said that if the Respondent is not in a position to deliver the property within the stipulated time, they shall be liable to refund the entire amount paid by the complainant to her, along with interest at the rate of 18% per annum.
  • In Swarn Talwar & Ors. Vs. Unitech Ltd.4 the National Consumer Dispute Redressal Commission penalised the builder for delay in delivery and directed the respondent to refund the amount paid to it by the complainants, along with compensation in the form of simple interest on that amount, at the rate of 18% per annum from the date of deposit till the date of payment.
  • Similarly, In Pankaj Kothari and Ors.Vs Unitech Limited5, the National Consumer Dispute Redressal Commission directed the builder to refund the entire amount paid to it by the complainants along with compensation computed @ 12% per annum on the principal payment within six weeks of the order.

Increased number of rulings favoring home buyers brings in the hope of better days for Consumers. Also, the recently cleared Real Estate (Regulation and Development) Act, aims at bringing in transparency in real estate transactions and reducing the problems faced by the consumers due to unfair-trade practices of the developers. The Act provides for setting up of State level Real Estate Regulatory Authorities by the State Government to ensure consumer protection and standardization of business practices. It also requires for registeration of the real estate project before it is offered for sale.  Such measures on the part of the Courts and the Central government will not only help in eliminating the problem of late delivery but also ensures a bright future for the home buyers.




3. Appeal no.739 of 2015

4. CC/347/2014

5. CC/308/2014

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