NEW DELHI: In a judgement that is sure to put huge financial burden on already cash-crunched real estate developers, all home buyers of a housing project will automatically be the party to a case filed against the builder.
The ruling says, under Section 12 (1) (c) of the Consumer Protection Act, irrespective of whether they have filed the case or not, buyers will be eligible for the benefits, according to a National Consumer Disputes Redressal Commission (NCDRC) judment on Friday.
“The failure of the builder/ developer to deliver possession of the flat / plot sold to them and a complaint filed for the benefit of or on behalf of all such consumers and claiming same relief for all of them, would be maintainable under Section 12(1)(c) of Consumer Protection Act,’’ the commission said while interpreting the Section 12(1)(c) of the Act.
“The interest of the persons on whose behalf the claim is brought must be common or they must have a common grievance which they seek to get addressed. The defect or deficiency in the goods purchased, or the services hired or availed of by them should be the same for all the consumers on whose behalf or for whose benefit the complaint is filed. Therefore, the oneness of the interest is akin to a common grievance against the same person,’’ it added.
“This is a pathbreaking judgement for buyers, who would now get the benefits without going through judicial process,’’ said Sahil Sethi, senior associate at law firm Saikrishna & Associates, who represented home buyers against Jaypee in Kalypso Court case.
However, Sethi feels this judgement would maximise the compensation burden on builders as they will now have to pay everybody, which they might not be able to honour. Buyers can also now move NCDRC if the aggregate of the value of the goods or services and the compensation claimed in the complaint exceeds Re.1 crore. Also, in case the grievance of the consumer is common and an identical relief is claimed for all of the applicants, the cost, the size, area of the flat/plot and the date of booking/allotment/purchase would be wholly immaterial, according to the order.
“I also fear the automatic application of compensation on all buyers would now apply to investors as well, who might actually exploit the situation,’’ he added.
NCDRC has recently acted against many big names in the industry on complaint of home buyers. The commission recently asked Jaypee to pay 12% interest for for delaying its Kalypso Court project in Noida. In another order, it also asked Mumbai-based builder Lodha group to refund Rs.1.02 crore to a buyer with 18% interest.
NCDRC on May 6 directed Parsvnath Developers to refund the entire amount paid by around 70 home buyers in its Parsvnath Exotica project in Ghaziabad with 12% interest for failing to complete the apartments on time.
The order would apply to all old and new such cases filed under Section 12 (1) (c) of the Act, according to Sethi, which would surely make life tough for defaulting real estate developers.
Credits ET Realty