National Consumer Disputes Redressal Commission (NCDRC) rejected the arguments of a real estate company that provisions mutually agreed upon in a builder-buyer agreement (BBA) are sacrosanct. The apex consumer court was hearing an array of cases filed by 26 buyers who, in 2009-10, had invested in Unitech’s Vistas project. Possession of flats was not handed over as promised by December 2012—not an uncommon problem in the realty sector. Forty buyers then moved NCDRC in November 2014. Of these, cases of 26 complainants were listed for final hearing, after a series of hearings over the past six months. The Commission’s verdict, though, is still reserved.
“The agreement clearly mentions the developer would pay 1.8% of the amount paid as penalty, in case of delay in handing over flats,” said advocate Sunil Goel, who represented Unitech.
But NCDRC rejected the argument on grounds that it can challenge any unfair trade practice, even if there is a prior agreement between the parties. “When the buyer is made to pay 18% penalty for default, is it fair on the developer’s part to pay a mere 1.8%?” said Justice VK Jain who heard the matter.
Unitech’s counsel cited several factors, like economic slowdown, shortage of labour availability and scarcity of raw materials, all of which were dismissed by NCDRC. “When the company has already collected over 90% of the cost, why is it affected by the state of the economy? Most delays happen because developers transfer money collected in lieu of one project into another. This is a very common practice,” said Justice Jain.