From ET Realty
A builder can neither change the layout nor alter or deprive a flat purchaser of the promised amenities by obtaining permission of the local authority to change the sanctioned plan.
Case Study: Marathon Realty, formerly Chhaganlal Khimji, constructed a building in Mulund. Flat purchasers formed the Monte Vista Residence Welfare Association, but the proposed Monte Vista CHS was yet to be registered. When all attempts to resolve the grievance failed, the association and the proposed society filed a complaint before Maharashtra State Consumer Commission (MSCC) against the builder, its directors Mayur and Chetan Shah, and BMC’s executive engineer of building proposal (eastern suburbs).
According to the complaint, flat purchasers had been induced to book flats based on representation in the builder’s brochure stating that world-class facilities would be provided along with club house and basement parking. Later, when the agreements were executed, they were not in accordance with the Model Form provided under the Maharashtra Ownership Flats Act (MOFA). The builder not only illegally charged extra amounts, ranging from Rs 4 lakh to Rs 6 lakh for allotment of parking space, but also did not provide basement parking. Instead, it was to be diverted to the BMC under the Public Parking Lot Scheme, jeopardising security of residents. Before the occupation certificate was obtained, possession of flats was given for fit out, yet deposit for maintenance charges of about Rs 1 lakh was collected from each purchaser. The builder had deviated from specifications of some of the promised amenities, such as swimming pool and gymnasium, so that three extra unauthorized flats could be constructed. The recreation ground, shown in the original plan to be in front of the building, was diverted for construction of a new building which was not mentioned earlier.
The builder contested the case. The company stated that at the time of handing over possession, an undertaking had been taken from the flat purchasers not to object to the basement parking being handed over to BMC for public parking. The builders claimed they would be developing a children’s play area, jogging track, garden and other landscaping only on top of another structure in lieu of what was originally promised.
The commission did not agree with the builder’s argument that the complaint was not maintainable. It said the welfare association was entitled to file a complaint. The builder’s contention that the complaint was beyond limitation was also overruled, observing that the complaint was filed within two years from the date of possession.
The commission considered various precedents and concluded that disclosures made in the brochure or other promotional materials are important and binding as they induce consumers to book flats. Accordingly, by its order dated February 10, delivered by Dhanraj Khamtkar for the bench along with Usha Thakare, the commission held the builders guilty of deficiency in service and unfair trade practice. Marathon Realty was also ordered to pay Rs 5 lakh as compensation and Rs 50,000 as costs.
Impact: Representations made in a brochure are binding.