One-sided clauses not binding on homebuyers

Tribune News Service
New Delhi, April 2

One-sided clauses in builder-buyer agreements amount to an unfair trade practice and such unfair agreements won’t be binding on homebuyers, the Supreme Court has ruled.

“Terms of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder,” a Bench of Justice UU Lalit and Justice Indu Malhotra said.

Rejecting the plea of Pioneer Urban Land & Infrastructure Ltd — a Gurugram-based builder — the Bench directed the builder to refund Rs 4.83 crore with 10.7% interest to the buyer.

The Company had contended that it can’t be forced to pay interest to the buyer at the rate of 10.7% as the agreement provided for interest at the rate of 6% only.

The top court took note of the fact that the homebuyer was paying interest on home loan at the rate of 10% and he was entitled to get 10.7 percent.

The homebuyer had paid Rs 4.83 crore in 2012 to the builder for a flat in Sector 62, Golf Course Extension Road, Gurugram. He was supposed to get possession of the flat in 2015. The homebuyer filed a case in 2017 after he didn’t get possession of the property.

The Bench also rejected the builder’s contention that the homebuyer should be asked to take possession of the flat as there was a delay of only three years. A buyer can’t be compelled to take possession of a flat at such a late stage, it said.

The top court said the builder failed to fulfill his contractual obligation of obtaining the occupancy certificate and offering possession of the flat to the buyer within the time stipulated in the agreement, or within a reasonable time thereafter. Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the agreement expired, it said.

The top court upheld the verdict of the national consumer court and declared it to be an unfair trade practice under Section 2 (r) of the Consumer Protection Act, 1986. “Uunfair trade practice' means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice …” says the provision.