Would be homeowners often face harrowing delays in gettingdelivery of their dream home for a number of reasons. Most cases of delay happen with small-time orone-time builders, who, before getting any of the necessary sanctions, mop upmoney from the market. Constructionssometimes never take off or are left incomplete midway. Sometimes possession is given but eitherwithout mandatory approvals or clear title deeds.
Most agreements thatyou sign with builders stipulate a hefty rate of interest for delayed paymentsfrom your side. But search for a similarpenalty clause for delays on the part of the builder in handing overpossession, and you will rarely find one. Fortunately, despite such one sided clauses in the agreement, consumerscan get compensation from builders for construction delays. Under the CPA, a consumer is entitled tocompensation for any service that turns out to be ‘deficient’. Since a delay in the delivery of any service constitutes‘deficiency’, one can demand compensation for such delays.
The Supreme Court(SC) in the landmark judgement in the case of Lucknow Development Authority vs.MK Gupta made it clear that “when possession of property is not deliveredwithin the stipulated period, the delay caused is denial of service” and aconsumer who is a victim of such delay is entitled to compensation. Another important point that the SC made inthis case was that compensation awarded by the consumer courts in such casesshould serve the dual purpose of recompensing the individual whilesimultaneously bringing about a qualitative change in the attitude of theservice providers towards consumers.
The law does give the aggrieved consumer some relief. In 2003 the Consumer Protection Act (CPA) wasamended to bring grievances regarding housing construction under it. Once a case is filed against a builder, anotice is served on him and the case has to be disposed of within six months.
However, despite thesix-month time limit, it usually takes one to two years for a case to besolved. If the builder fails to handover the flat within the time frame set by the court, Section 25 or 27 of theConsumer Protection Act could be invoked against him. Under this, the court could attach theproperty of the builder, impose a fine of Rs.10, 000 and/or also punish himwith three years imprisonment.
The writer is a social scientist and lawyer and has been a seniormember for 10 years at the Consumer Court in Goa
