An article about " BUILDERS CAN'T ESCALATE PRICE TO DENY COMPENSATION FOR DELAY "

BUILDERS CAN'T ESCALATE PRICE TO DENY COMPENSATION FOR DELAY

On the question whether a builder after agreeing to deliver possession within a stipulated time, raise a contention that as the price of a flat or property has gone up, it should not be directed to pay any compensation for delay in delivering possession of the property, the National Consumer Disputes Redressal Commission (NCDRC) has held that such a contention of any

builder is unjustified and unreasonable, because after sale of the property all the benefits accrue to the purchaser and not to the vendor. In any case, if such contention is accepted it would earn crores of rupees to the developers or the delay in delivery of possession of the flat or property for months together on one pretext or the other.

In the instant case the complainant Kunj Behari Mehta had approached NCDRC on May, 2000 with a prayer that the opposite party Ansal Properties and Industries Ltd., be directed to delivery possession of his apartment and also to pay interest 24 per cent per annum on Rs.26,26,790/- i.e., the amount deposited by him with the builder with effect from October 10, 1998 Contd. from p.14 purchase these flats and occupy them immediately. In other words, there is a good market for low cost ready to occupy flats with good infrastructure.

Still the date of delivery of possession or refund the amount deposited with 24 per cent interest.

The agreement between parties was signed in March, 1995 and builder was to construct flat within 42 months i.e., October 1997, subject to force majeure circumstances and on receipt of all payments punctually. As some extra construction was made, the complainant was required to pay a higher basic sale price.

The NCDRC had directed the builder to deliver possession in December, 2007 and consequently, possession of the apartment was delivered on December 20, 2007 i.e., 10 years after agreed date.

Developers have therefore to develop the properties keeping in mind these factors before they undertake any project for this segment of people. This particular class in the city is so high that any The builder questioned the logic of claiming interest on the amount deposited since the value of the said flat had increased due to the increase in the price of the property. However, the CDRC rejected this contention stating "If the price on an immovable property increases, it cannot be said that the parties are not required to abide by their contractual obligations. In any case, it is the luck of the complainant that the price of the property has increased and it cannot be said that it is for the benefit of the vendor.

The builder/vendor of the property cannot claim advantage on account of increase in price after sale. The NCDRC awarded compensation for unjustifiably not delivering possession of the flat as per the agreement in October 1998 till December, 2008 and directed the builder to pay 12 per cent interest per annum from 1st November, 1998 till December 2008 on the amount deposited by the purchaser project with reasonable price would attract market which is otherwise is dull since a readily available flat is what a middle class customer looks for and if gets one he feels that his dream is fulfilled.