Now, builders to pay penal interest for delay from date of booking

Tribune News Service

Chandigarh, February 4

In what appears to be a major relief for gullible people who fall prey to the lucrative offers of realtors in a bid to own their house, the Chandigarh State Consumer Disputes Redressal Commission has ruled that the realtors will be liable to pay penal interest at the rate of 12 per cent per annum from the date of booking and not the date of buyers agreement, which is usually executed much after the booking, for delay in possession of the property.

The ruling came in a judgment delivered on the complaint of Chandigarh resident Sundari Mehtab Kaur and her New Delhi-based husband Manoj Garg against a leading real estate company – Omaxe Chandigarh Extension Developers Private Limited.

In the judgment delivered on February 2, a copy of which was made available here today, the commission, headed by its president Justice Jasbir Singh (retd) and comprising member Dev Raj, made it clear that “since four months delay in issuing allotment letter is clearly attributable to the opposite parties, in all fairness, 24 months period for possession has to be computed from December 3, 2011, when the complainants signed the allotment agreement and submitted the same to the opposite parties on the same day.”

The development assumes significance as in a majority of cases, the builders take booking and other installments from consumers prior to even executing a binding contract – the buyers agreement. Generally after collecting hefty sums, the builder postpones the execution of the buyers agreement to pocket interest on the amount. Since only the buyers agreement stipulates the date of possession, the same is heavily delayed as a consequence of delayed execution of the agreement.

The commission has also held that the buyers are liable to pay the balance amount to the builders when legal and complete possession after completion of development and amenities of the property, in question, is offered by the builders.

In this case, the commission granted a total compensation of over Rs 22 lakh under different heads for the delay in offering complete possession of the plot.

“An interest at the rate of 12 per cent per annum, accruing with effect from February 1, 2016, onwards till handing over of actual physical possession of the plot, in question, shall be payable by the opposite parties at the time of handing over of possession complete in all respects, after obtaining completion certificate, to the complainants, failing which the same shall carry penal interest at the rate of 15 per cent per annum for the entire defaulted period,” the commission ordered, while directing the Omaxe to hand over the legal physical possession of the plot within three months to the complainants.