PUNE: The National Consumer Disputes Redressal Commission (NCDRC) has stated that a builder’s inability to complete a project and deliver possession in a timely manner constitutes a clear deficiency in service and an unfair trade practice.
According to the NCDRC bench, led by Justice Sudip Ahluwalia and member Sadhna Shanker, “A homebuyer cannot be expected to wait indefinitely for possession. In cases of significant delays, the consumer is entitled to a refund with applicable interest and compensation.” This ruling was based on a Supreme Court judgment from 2020.
The bench has mandated that Kakade Construction Company Private Limited, based in the city, must deliver possession of two flats booked by a doctor couple in the “Kakade City” project in Hingane (Budruk) within three months. The couple had booked these flats in June 2006.
If the company fails to deliver, it must refund ₹3.01 lakh along with 15% annual interest, as ordered. The couple had paid this amount two decades ago as part of the booking and initial installment for the flats.
Advocate Dnyanaraj G Sant, representing the complainants, commented to TOI, “The bench determined the rate of interest based on a clause in the registered agreement, which stipulated that the purchaser would pay the builder 15% per annum for delays in payment.”
The Supreme Court has ruled that if an agreement imposes a high-interest rate on the purchaser for defaults, the builder cannot apply a substantially lower rate when refunding, as such one-sided stipulations are considered unconscionable.
Sant added, “The total interest on ₹3.01 lakh has already accrued to approximately ₹9 lakh and will continue to rise until actual repayment. We will wait for three months for the construction firm to comply with the NCDRC order and will consider legal action if it is not honored. We’ll also monitor if the firm appeals this ruling before the Supreme Court.”
Despite multiple reminders, the construction company did not submit any written defense against the allegations made by the complainants. The NCDRC had closed the firm’s right to file such a response on November 24, 2016.
In reviewing the unchallenged allegations and the complainant’s supporting affidavit, the bench observed that the builder had failed to complete construction and hand over possession of the flats within the stipulated contract period of December 12, 2007. “Nearly two decades have passed, and neither possession has been granted nor has an occupancy certificate been obtained. The builder has not made any stage-wise demand for the remaining payment,” the bench noted.
