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Supreme Court Holds That Obtaining Possession Of Flats Does Not Equate To Relinquishment Of Rights To Claim Facilities Promised By The Builder

By - Shilpi Pandey on March 3, 2023

In the appeal filed in the matter of Debashis Sinha and others vs M/s RNR Enterprise,1 the Hon’ble Supreme Court has reprimanded the order passed by the National Consumer Dispute Redressal Commission dismissing aggrieved homebuyers' claim for compensation on the ground that the buyers knowingly purchased the apartments. The bench was hearing a homeowner's appeal against the NCDRC's decision to dismiss their claims against the Kolkata-based builder RNR Enterprise. The builder failed to provide "completion certificates" and deliver on the promises of standard amenities and facilities. Even while the NCDRC determined that the builder had engaged in unfair trade practices, it did not provide the buyers with the requisite relief. 

The builder is guilty of Unfair trade practices under section 2(1)(r) of the Consumer Protection Act 1986. Considering the rights of Flat-owners', the court held, “if complaints were to be spurned on the specious ground that the consumers knew what they were purchasing, the object and purpose of the enactment would be defeated-in most cases, the jurisdiction of NCDRC is invoked post-purchase. Any deficiency detected post-purchase opens an avenue for the aggrieved consumer to seek relief before the consumer fora.” 

The Supreme Court's comment on flat owners’ plight is that nowadays, flat owners seldom purchase flats with liquid cash. Apartments are purchased based on finances being advanced by banks and other financial institutions. Once a flat is booked, and the prospective flat owner enters into an agreement for a loan, instalments fall due to be paid to clear the debt, irrespective of whether the flat is ready for delivered possession. The usual delays associated with construction activities result in undue anxiety, stress, and harassment for which, many prospective flat owners, it is common knowledge, even without the project/flat being wholly complete, are left with no other option but to take possession.  

“If at all, the appellants had not forfeited any right by registration of the sale deeds, and if indeed the respondents were remiss in providing any of the facilities/amenities as promised in the brochure/advertisement, it was the duty of the NCDRC to set things right." 

Thus, after acquiring ownership of such a flat, the owner retains the ability to pursue claims for services that were promised but never delivered, which constitutes a deficiency in the builder's services. 

The NCDRC's "perfunctory approach" in ignoring the appellants' complaint about the builder's failure to get a completion certificate was also criticised by the Court. Further, the court stated that it is not part of the flat owner’s duty to apply for a completion certificate, "it is the obligation of the person intending to erect a building or to execute works to apply for completion certificate in terms of the rules" 

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