Court fines Ansals Rs.2.73 mn for delaying apartment delivery

June 26th, 2008 - 11:30 am ICT by IANS  


By Kanu Sarda
New Delhi, June 26 (IANS) Frowning on real estate developers who refuse to pay compensation for delayed deliveries, a court here has fined leading builders Ansal Properties and Infrastructure (API) Rs.2.73 million (Rs. 27.3 lakhs) for not handing over an apartment on time. The National Consumer Redressal Commission also asked API to pay it Rs.50,000 for the “rough behaviour” of one of its officials.

The case dates to 1998 when Kunj Behari Mehta booked an apartment in the Celebrity Homes complex API was developing in the Palam Vihar neighbourhood of west Delhi.

He deposited Rs.2.62 million and was promised possession in three and a half years.

When this did not happen, Mehta filed a case with the commission seeking damages of 24 percent per annum from the booking date to the delivery date on the amount he had deposited.

API contended that such heavy compensation was not justified since the price of the property had also appreciated in the meanwhile.

A two-member bench of the commission, headed by its president, Justice M.B. Shah, and member, Anupam Dasgupta, in its judgement earlier this week disagreed with the company.

“In our view such contention of any builder is unjustified and unreasonable because after sale of the property, all the benefits accrue to the purchaser and not to the vendor,” the commission maintained.

“In any case, if such contention is accepted, the builders would earn millions of rupees by delaying the delivery of the possession of the flat for months together for one reason or the other,” it added.

The commission ordered that the Rs.2.73 million fine be handed over to Mehta, who was finally given possession of the apartment late last year.

“If the price of an immovable property increases, it cannot be said that the parties are not required to abide by their contractual obligations,” the commission said.

“In any case, it is the luck of the owner that the price of the property has increased and it cannot be said that it is for the benefit of the vendor.

“The builder of the property cannot claim advantage on account of increase in price after sale,” the commission ruled.

The commission also fined API Rs.50,000 for the high-handed and rough behaviour of its manager and ordered the money to be deposited in the Consumer Legal Aid Account.

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