A Ray of Hope

The apex court has come down hard on builders for not compensating customers if they are unable to hand over flats on time. It slammed builders for one-sided agreements and arbitrariness

- Shivanand Pandit

TWO remarkable decisions of the Supreme Court have given hope to flat owners. Firstly, the Court declared that builders’ trend of asking for additional money outside the prescribed sale consideration due to alleged extra sales area is unlawful. In the second case, relating to compensation for postponement in handing over the ownership of the flat, the Court stiffened the noose around builders.

The bench led by Justice DY Chandrachud was hearing a builder’s petition against an August 2020 verdict of the National Consumer Disputes Redressal Commission (NCDRC). The appeal by the builder quoted a contractual section which allowed him to raise an extra demand for money from the consumer if the sale area goes up to 10 percent. But this was quashed by the NCDRC and the claim was seen as illegitimate, thereby favouring the homebuyer.

The builder then pleaded in the Supreme Court, and the appeal was discharged on January 12, 2021. Therefore, the NCDRC’s finding on extra area stood validated. Furthermore, across plea was filed by a homebuyer on the subject of the NCDRC not allowing any compensation for tardy possession.

The NCDRC noted in its judgment that with reference to excess area, the plaintiff was of the view that without any base, the builder had sent the demand for extra area and the architect’s certificate was sent to him, which is of a later date. The explanation provided by the builder that the demand was made on the basis of an internal narrative of the architect is not satisfactory because no such report was filed by him to show the excess area.