Among other Statutory
as well as Contractual obligations on the Builder, according to Consumer
Protection Courts, the builder cannot raise the defence about limitation, it
the builder fails to give possession notice to buyer as required by laws or
under a contract.
Case Law: Collin and Cheryl Paes had booked a villa at
Navelim in Goa in a complex knwown as D’Silva Residency, to be developed by
M/s. Homemakers. According to the Sale Agreement dated: 13/10/2008, a total
amount of Rs.40.00 lakhs had to be paid for the construction and sale of the
Villa admeasuring 210 Sq.M. along with proportionate undivided right on the
land.
The agreement
provided that possession would be given within six months, which may be
extended twice by grace periods of three months at a time. So the total
timeframe came to 12 months.The
agreement stipulated that the purchaser would have to take possession within 30
days of the builder giving a written intimation that the villa was ready for
occupation.
The Paes couple
claimed that even though the agreed price was Rs.40.00 lakhs, they paid a total
sum of Rs.63,11,870/- as demanded by the builder citing inflation, rise in
construction cost, and improvements made in the villa etc. Yet the builder also kept on extending the date of possession.
Finally, when the
builder failed to hand over possession of the villa even upto January 31, 2014,
the Paes couple had got a legal notice issued to the builder. As this too
failed to evoke any response, the Paes couple filed a complaint before the
Goa State Commission for Consumer
Redressal.
The builder contested
the complaint. The builder justified his demand for the additional amount and
relied on a valuation report issued by Jammu and Kashmir Bank, which showed the
value of the villa to be about Rs.25.00 lakhs and the land worth Rs.35
lakhs. The builder further claimed that
the villa had been undervalued in the agreement as Paes couple had made this
request to avoid tax problems. The
builder claimed Paes couple used to frequently pass by the Villa and were aware
that it was ready by 2009 itself within the stipulated time frame. The builder further contended that he did not
give possession since Mr. Paes failed to pay the entire amount.
The State Consumer
Redressal Commission observed that the agreement cast an obligation on the
builder to give a written intimation after the villa was ready for
occupation. The requirement to give the
intimation would not be an empty formality, but an obligation under the termsof the agreement. Limitation would begin to run from the date of such
intimation. The State Commission further
held that regardless of whether or not the villa was ready in time, the cause
of action would continue as the builder had failed to give the intimation about
possession as required under the agreement. The State Commission also noticed
that the builder had failed to respond to the legal notice.The State Commission
accordingly held the builder liable to pay interest on Rs.63,11,870/- at 14.75%
p.a, from the date of complaint till realization, along with compensation of
Rs.25,000/- for mental trauma and costs of Rs.5,000/-.
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