Collecting Transfer Charges From Subsequent Purchaser Constitutes As Deficiency In Service: NCDRC

The National Consumer Disputes Redressal Commission, presided by AVM J. Rajendra, held that a developer requiring the buyer to pay transfer charges for a property where the developer no longer has any interest constitutes an unfair trade practice. Brief Facts of the Case The complainant is a purchaser from the original allottee who initially booked a flat in “The Valley” residential project by DLF Homes/developer, paying Rs. 6 lakhs. An agreement was executed with the developer at a total price of Rs. 42,34,599.72. After settling dues with the previous allottee, the complainant submitted transfer documents. Despite this, the developer demanded Rs.4,13,236 in transfer charges, which was not stipulated in the agreement and contradicted Haryana Government rules that limit such charges to Rs.10,000. The complainant paid a total of Rs.47,86,313 and took possession but argued the charges were unjustified, amounting to a deficiency in service and unfair trade practices. The complainant filed a complaint before the State Commission, which allowed the complaint and directed the developer to refund the transfer charges paid by the complainant, deducting Rs.10,000, along with 9% annual interest from the payment date. Additionally, the developer was directed to pay Rs.50,000 as compensation for mental agony, harassment, and litigation costs. Aggrieved by the State Commission's order, the developer appealed to the National Commission. Contentions of the Developer The developer argued the complainant was an investor buying the unit for profit, thus not a consumer. The developer also cited an arbitration clause in the agreement, claiming the consumer complaint was non-maintainable and that any agreement modification should be addressed in civil court. On the merits, the developer admitted the complainant purchased the unit from the original allottee, who had settled all grievances and absolved the company from further litigation. They stated the complainant willingly agreed to the transfer fees per the agreement terms, denying any service deficiency or unfair trade practices. Observations by the National Commission The National Commission addressed the issue of whether the developer could levy transfer charges on the complainant and to what extent, based on the agreement and relevant law. It was acknowledged that the complainant agreed with the previous allottee for a unit in “The Valley” project and paid all dues for the transfer. The developer refused to transfer the unit until the complainant paid Rs. 4,13,236 in transfer charges, which the complainant eventually paid, bringing the total to Rs. 47,86,313. The commission found no justification for the high transfer charges demanded by the developer, noting the basic sale price of the unit was Rs. 33,87,525. The developer failed to present any rule or regulation supporting the high fee, nor did they provide a valid reason for needing such an amount to issue the NOC. According to state regulations in Haryana, the maximum transfer fee should be Rs. 10,000. The commission determined that transfer charge of Rs. 4,13,236 from a subsequent purchaser was grossly unjustified and amounted to an unfair trade practice since the developer had no further interest in the property post-registration. The commission cited the Supreme Court case of DLF Homes Panchkula Pvt. Ltd. vs. D.S. Dhanda, which held that multiple compensations for a single deficiency are not justifiable. The National Commission modified the State Commission's order and set aside Rs. 50,000 in compensation for mental agony and harassment but directed the developer to pay Rs. 20,000 as the cost of litigation. Case Title: DLF Homes Panchkula Pvt. Ltd Vs. Amit Chhokra Case Number: F.A. No. 655/2021Click Here To Read/Download Order

Collecting Transfer Charges From Subsequent Purchaser Constitutes As Deficiency In Service: NCDRC

Ayushi Rani

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