THE RULINGS YOU CAN CITE

Courts and consumer forums have often ruled in favour of the home buyer. Go through this list to figure out where your case fits in because it is easier to convince a panel if you can cite a precedence.

SUPREME COURT VERDICTS 
1. Housing construction is a service under the Consumer Protection Act 
In 1993, the Supreme Court ruled in favour of MK Gupta in his case against the Lucknow Development Authority for not delivering his flat on time. This landmark judgement brought housing construction under the purview of the Consumer Protection Act, 1986. The Supreme Court ruled that “the purpose of widening the definition (of service) is to include in it not only the day-to-day buying and selling activity undertaken by a common man, but even activities that are otherwise not commercial in nature, yet partake of a character in which some benefit is conferred on the consumer… Similarly, when a statutory authority develops a land, allots a site, or constructs a house for the benefit of a common man, it is considered a ‘service’ similar to that by a builder or contractor. When possession of the property is not given within the stipulated period, the delay is denial of service. Such disputes or claims are not with respect to immovable property but ‘deficiency in rendering of service’ of a particular standard, quality or grade. A person who applies for allotment of a building site, or flat constructed by the development authority, or entered into an agreement with a builder or contractor is a potential user and the nature of construction is covered in the expression service of any description”. 

2. Interest has to be paid for delay in possession 
In the Ghaziabad Development Authority vs Balbir Singh, 2005 CTJ 124, the apex court observed: “Normally, a case of delivery of possession, though belatedly, stands on a different footing from non-delivery of possession, because in case of the former, the allottee also enjoys the benefit of a plot/flat. In such a situation, the rate of interest should not exceed 12%. In a specific case, where it is found that the delay was culpable and there is no contributory negligence by the allottee resulting in harassment/injury, both mental and physical, the forum/commission would not be precluded from making an award in excess of 12% per annum.” 


NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION CASES 
1. Buyer is entitled to opt out of a project if there is a delay in delivery 
A buyer can opt out of a housing project if there is a delay in delivery of possession by the developer, says the National Consumer Commission. It has also said that the buyer is entitled to a refund of the entire money with reasonable interest, and any deduction by the builder is unjustified. The commission passed the order on a petition of Agra resident Indira Gupta, seeking a quashing of the Uttar Pradesh State Commission direction to deduct 20% from the amount to be refunded by the Agra Development Authority. 


2. Buyer can withhold payment if construction does not proceed 
In the Ansal Housing vs Renu Mahendr case (revision petition no. 1218 OF 2006), the commission held: “If the company has not apprised the respondent about the status of the project, which in fact was associated with payments to be made by the respondent, then the respondent having withheld the payment was not at fault. The company, while making all these communications, had been insisting that the respondent release the payment, but it did not adhere to the terms of the allotment letter, letting the respondent know about the progress of the construction of the project.“ 


3. Buyer can move a court despite what is said in the sale agreement 
In the Neha Singhal vs Unitech case (first appeal no. 426 of 2010) the commission held: “To emphasise, the clause relating to jurisdiction of courts in the agreement between the parties cannot by itself override the statutory right of the appellant/ complainant conferred by the above-mentioned provision of the Act—that would defeat the purpose and object of the Act. This view is also in accordance with the provisions of Section 28 of the Indian Contract Act, 1872 (as amended with effect from 8 January 1997).”