Friday, 3 July 2015


The Consumer Protection act, 1986 came into force from July 1987 onwards.  Immediately thereafter, cases against the Real estate builders were started to be filed before the concerned Consumer Redressal Forums set-up under this Act, all over the Country.   These ‘Consumer Redressal Forums’ are modeled on the ‘Small Claims Court’ pattern and it incorporates safeguards for Consumers against ‘unfair trade practices’.  Complaints against the builders could always be entertained in the ‘Consumer Redressal Forums’. 
In order to straighten the things and to make the picture more clearer, the Government of India amended the ‘Consumer Protection Act’ in 1993.One of the amended portion is that the words ‘Housing Construction’ have been inserted in Clause 2 (1) (0) of the Consumer Protection Act, which defines ‘service’.Hence complaints against builders with regard to ‘housing construction’ can also be filed before the concerned ‘Consumer Redressal forums’.
Jurisdiction to file complaint:
A consumer can get redressal for his grievances, in the form of a ‘three-tier’ redressal machinery, as follows:
1.If the compensation claimed by a Consumer is less than Rs.20.00 lakhs, then the Complaint to be filed before the concerned District Consumer Redressal Forum.
2.In case the compensation claimed is above Rs.20.00 lakhs but below Rs.1.00 Crore, then the matter is required to be moved before the State Consumer Forum; and
3.In case the compensation claimed is above Rs.1.00 Crore, then the case has to be filed before the National Consumer Commission at New Delhi. 
The clause for Appeal is also provided under the ‘Consumer Protection Act.’ 
Who can file a complaint:
In terms of Section 2 (1) (b) of the Consumer Protection Act,a ‘Complainant’ is :
a.A Consumer; or
b.Any voluntary consumer association registered under the Companies Act, 1956(1 of 1956) or under any other Law for the time being in force; or
c.The Central Government or any State Government;
d.One or more Consumers where there are numerous consumers having the same interest;
e.In case of death of a Consumer, his legal heir or representative who and which make the complaint.
Group Complaints:                                
In case there are problems with a common builder, then by way of an amendment to the ‘Consumer Protection Act’ in 1993, all such persons who have purchased houses or flats and have complaint against such common builder can get together and form in to a group and can file a ‘consolidated complaint’ against the common builder.This is in view of the fact that the words ’one or more consumers’ where there are numerous consumers having the same interest’ have been inserted  in the definition of ‘complainant’ in Section 2 (1) (b) as sub-clause (iv) thereof by the amendment.   
However, a caution to be noted here, wherein, it may be noted that, in case the complainants are asking a builder to refund the money paid by one of the consumer for a flat on account of such complainant’s personal need for the money, then in such cases, the complainant may not win the case before the Consumer Redressal Forum.
To corroborate the above position, please find hereunder a case which clarifies the position:
A person did not pay the installments as she should have after she booked a flat with the builder, instead she complained to the Delhi State Commission for refund of the money she had already deposited with the builder.  It appears that she had earlier written to the builder that she needed the money for her domestic reasons.  It was not the case of her that she was asking for a refund because the flat was not being completed or given possession to her.  In this case, the Delhi State Commission held that the client could not be allowed to wriggle out of the contract with the builder.

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