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Altering Project Layout Without Prior Notice 'Unfair Trade Practice': NCDRC Orders Refund To Flat Buyer

Sebin James
24 March 2022 12:15 PM GMT
Altering Project Layout Without Prior Notice Unfair Trade Practice: NCDRC Orders Refund To Flat Buyer
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National Consumer Dispute Redressal Commission has held that alteration in the number of flats per tower without any increase in the project area and without prior notice to the buyer amounts to unfair trade practice.Justice Deepa Sharma (Presiding Member) and Subash Chandra (Member) was adjudicating upon a complaint against delayed delivery of possession and altered layout of the...

National Consumer Dispute Redressal Commission has held that alteration in the number of flats per tower without any increase in the project area and without prior notice to the buyer amounts to unfair trade practice.

Justice Deepa Sharma (Presiding Member) and Subash Chandra (Member) was adjudicating upon a complaint against delayed delivery of possession and altered layout of the apartment project called 'Chintels Serenity' in Gurugram.

The Commission found that there has been a deficiency in service on the part of Chintels India Limited since there has been an admitted delay of fifteen months in delivering possession of the flat. The Commission also observed that Chintels has failed to produce any documentary proof to the effect that prior intimation was given to the buyer about the bifurcation of the project into two phases.

"...There is an admitted delay in offer of possession. There is also an admitted alteration in the project in as much as it has been bifurcated into two phases with an increase in the number of total flats by 36% or additional 120 flats. It is, therefore, evident that opposite party has indulges in unfair trade practise", NCDRC noted in its order.

Moreover, the Apartment Buyers Agreement executed in 2013 is tilted in favour of the Project Developer when a comparison is done between the terms regarding the notice period applicable and compensation for the delay on account of Chintels and the conditions imposed on the buyer for exiting the scheme.

The Commission concluded that the offer of possession and final demand notice in 2019 is for a partially completed project and the buyer can't be faulted for denying the offer of possession. The court noted that the Apartment Buyers Agreement never spoke of a 'phased construction' and that only three of the nine towers have been completed. 

Stating the above reasons, NCDRC ordered Chintels to refund the entire amount of Rs 1,62,67,714/- paid on several occasions by the buyer along with interest thereon @ 9% per annum within a period of 3 months. If the opposite party fails to comply with the order, then it will be liable to pay interest @12% per annum. Chintels has also been directed to pay a sum of Rs. 25,000/- as litigation cost.

"The alteration in the number of flats per tower without the area of the project being increased does amount to greater occupation density and dilution of the initially promised common facilities under the project as it is obvious more persons utilising the same, in view of the increase in the number of flats. …" the Commission added to its findings.

NCDRC also noted that the opposite party couldn't prove default in payments by the complainant whereas the complaint has produced documentary evidence like the home loan obtained from HDFC Bank and bank statements detailing payments made to the opposite party. 

The court also underscored that the onus of proving that the complainant is not a 'consumer' within the ambit of the Act lies with the opposite party. The court also added that Chintels failed to produce any evidence to support the said allegation.

Advocates Geetika Kapur and Ensha Chhabra appeared for the complainant and Advocate Nishi Ranjan Singh represented the opposite party.

Background & Arguments Raised

The Complaint filed under Section 21 (a) (1) of Consumer Protection Act, 1986 by one Mr. Vikas Jain, accused Chintels India Private Limited of not completing the project as per the proposed plan, thereby resulting in huge loss for the complainant on account of the opposite party's deficiency in service and unfair trade practises.

According to the complainant, he had booked a flat measuring 2350 sq. ft flat in 2021 by paying an initial booking amount. Subsequently, he was allotted Flat No. 601 in Tower D. The delivery of possession was assured within 42 months from the date of booking.

According to the complainant, subsequent sums were paid duly by him under the heads of EDC, Club Charges, IDC, Parking Charges etc. A home loan was also obtained by the complainant from HDFC Ltd.

Apartment Buyers Agreement was only executed in 2013 where the 42 months inclusive of the six months grace period for delivery of possession is mentioned. Even on the last date in December 2017, the possession of the flat was not given to the complainant.

According to the complainant, it was only after a site visit in the aftermath of repeated requests that he came to know about the phased construction. The complainant argued that the quality and finish of his flat was diluted due to the unilateral project expansion and increase in the number of flats to four per floor from two per floor.  Before the commission, it was submitted that more than 50% of the area was cordoned off due to the ongoing construction of the remaining six towers.

According to the complainant, the opposite party deliberately made misrepresentations and made him pay a premium price for the flat concerned, higher than the prevalent rate.

According to the opposite party, the complainant was not a 'consumer' under the Act since the flat was booked only for 'speculative purpose'. The flat was booked as a pre-launch booking only in 2013.  Chintels India Limited also argued that there were defaults in payments and the delay of 15 months was unforeseeable due to an NGT order to stop the construction due to increased pollution, coupled with a labour shortage. The Group also contended that they were ready to pay adequate compensation for the slight delay that has occurred. They also argued that layout changes were made after inviting objections from all the buyers.

Case Title: Vikas Jain v. M/s Chintels India Ltd. 

Case No: CC/908/2019

Click Here To Read/ Download Order

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