Consumers BEWARE!

Recover relief money from erring officials

THE Supreme Court, in its order in the case of Lucknow Development Authority vs M.K.Gupta (delivered in 1993), held that where a person suffers loss or injury on account of misfeasance in public office, malicious abuse of power, or such other unlawful acts by public servants, the compensation should be paid by those who are actually responsible for it. In other words, identify the actual culprits and make them pay for what they have done.

In fact the apex court made three highly relevant points in this case : (1) The statutory authorities are liable for the consequences of their actions or inactions; (2) that the damages to be awarded to consumers by the courts in such cases should not only compensate them but also act as a deterrent; and (3) that the compensation so awarded should be recovered from those who are directly responsible for the loss or injury to the persons concerned.  

This principle should be fully applied in consumer cases against Greater NOIDA Authority, and the message that should clearly go out is that governments that resort to such coercive and illegal acquisition of lands should pay for the consequences. 

This is not the first time that such a thing has happened in India, but it can be the last, if the law courts ensure that those responsible, pay and pay a steep price for their actions.

First and foremost, the Greater NOIDA Authority should be held fully accountable for the consequences of its actions in forcibly acquiring farmersí lands and handing these over to private builders. This means that the Authority should fully pay for the financial losses suffered by the people. It is possible that the farmers will sell back the land, but at the market price, either to the government or the builder. Many farmers have already said that the land has been made uncultivable by the builders. If that happens, then probably the construction work will be resumed by the builders, but they will certainly ask consumers to pay more towards the higher cost of land and, perhaps, even escalation charges on account of delays. 

So, in all such cases, Greater NOIDA Authority has to bear the additional financial burden of the people, or in other words, the compensation package to them should take into consideration these factors.

In some cases, the farmers may not sell back, and this would mean that the builders will have to refund to the consumers, the amount collected, along with interest. This is easier said than done, given the track record of builders in refunding clients who opt out of their schemes. So it should not only become the responsibility of Greater NOIDA Authority to ensure that people get back their full refund with interest, but also pay for any other financial losses borne by them, including the additional cost that they will incur if they try to get into some other housing scheme. In addition, it should also compensate the consumers for the agony and harassment suffered on account of its  actions.

It is not possible to assess the total number of people who would eventually be affected, but it could well run into a few lakhs, depending on how many such land deals are set aside by the courts. Already, many flat buyers have formed associations and have sought the intervention of the courts.  Hopefully, the law courts will not let them down, just as they have not let down the farmers.  

Meanwhile, there is the time factor to be considered. That is, whatever the future will hold for the house buyers of the now infamous NOIDA extension, one thing is certain, and that is the long waiting period ahead of them.  A period during which a number of people will debate whether or not to make the repayments on the loans taken by them.  Clients need to realise that not paying the equated monthly instalments will adversely affect their credit rating and in turn their future borrowings. So, instead of taking such steps, it is better to put pressure on the banks to reduce the  interest rates on these loan accounts and also re-adjust the repayment schedule.

The associations of home buyers should immediately write to the Union Finance Ministry, the Reserve Bank of India and also the Uttar Pradesh Government on this issue. In fact the UP Government should offer to subsidise interest rates for the distressed consumers. It should also ensue that all affected persons will either get the flats or their refund, along with interest and compensation. This is the least that the state government can do, given the circumstances.