NCDRC: Incorporation Of One-Sided Clauses In An Agreement Constitutes Unfair Trade Practice

A division bench of the NCDRC comprising presiding members Justice Ram Surat Ram Maurya and Dr. Inder Jit Singh, while adjudicating on a consumer complaint against the flat developers, reiterated that the remedies under the Consumer Protection Act are in addition to the remedies under other statutes. Further, incorporation of one-sided clauses in the agreement where the buyer is expected to sign on the dotted lines having no other option, would amount to unfair trade practice under the Consumer Protection Act, 1986. Brief Facts: The Complainant, Mr. Sunil, booked a flat in a residential project launched by the Opposite Parties namely, RISE in Gurgaon, Haryana. Mr. Sunil was allotted a flat on the 10th floor subsequent to a buyer’s agreement entered between the parties. Allegedly, the Opposite Parties deliberately, willfully and dishonestly cheated and defrauded the complainants of their hard-earned money. There was a deficiency in services on their part and they got indulged in unfair trade practices. Even after 95% of the total cost of the flat was paid by Mr. Sunil, the Opposite Parties failed to hand over the possession of the flat within the stipulated time (that was September 2015) and allegedly, the construction was still not over. Hence, Mr. Sunil prayed for a refund along with interest. The Opposite Parties submitted that they had received an extension for completion and development of project up till December 2023 by the RERA. The delay in handing over the possession of the Apartment was on account of force majeure and unforeseeable circumstances beyond the control of the Opposite Parties including. An order stopping the use of ground water was given by the High Court of Punjab and Haryana directing to use only treated water from available sewerage treatment plant followed by a letter of the Deputy Commissioner of Gurgaon. This further resulted in the delay. The opposite parties further contended that the delay was attributable to reasons beyond the control of the Opposite Party and the Covid-19 pandemic was another reason which caused a major havoc and sudden halt in every industry specially real-estate. Thus, the Complainants are only entitled to Compensation provided under Clause 17 of the Buyer’s agreement. Observations of the Commission: The NCDRC relied on Pioneer Urban Land and Infrastructure Ltd. vs Govindan Raghavan (2019) 5 SCC 725, wherein the Supreme Court held that a term of a contract will not be final and binding if it is shown that the flat purchaser had no option but to sign on the dotted line, on a contract framed by the builder. Further, the incorporation of a one-sided clause in an agreement constitutes unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986. Moreover, it is settled that remedies under the Consumer Protection Act are in addition to the remedies under special statutes. Thus, it cannot be said that the terms of the agreement can be forced on the complainant. The commission held that in the instance case, there was an inordinate delay in handling over the possession of the flat by the Opposite Parties and the complainant cannot be made to wait for an indefinite time and suffer financially. However, owing to the market conditions and observing the decisions of the commission in similar matters, the interest was reduced to 8% rather than 12%. Subsequently, the Opposite Parties were ordered to refund the entire principal amount to the complainant along with compensation in the form of simple interest at 8% per annum. Case:Sunil Sikka vs M/S Ramprastha Promoters and Developers Pvt. Ltd. and 7 ors. Case No.:Consumer Case No. 746 of 2018 Counsel for the Complainant:Mr. Rishi Kapoor Counsel for the Opposite Party:Mr. R. Gayathri Manasa Click Here To Read/Download Order

NCDRC: Incorporation Of One-Sided Clauses In An Agreement Constitutes Unfair Trade Practice

Smita Singh

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