Case Law Details
Wg. Cdr. Arifur Rahman Khan & Aleya Sultana & Ors vs. DLF Southern Homes Pvt. Ltd. (Supreme Court)
Delays and defaults are common in real estate development. The Flat buyers are usually left in the lurch where the Developer delays the delivery of the constructed units incessantly. This prompted the government to enact Real Estate (Regulation and Development) Act, 2016. The said Act provides for the adequate compensation in the form of interest in the case of delay by the promoter. Even prior to the said enactment, the Flat buyers would invoke the remedy under the Consumer Protection Act. One such matter reached the apex court. The court has decided some important issues which would also apply to RERA. The said decision in the case of Wg. Cdr. Arifur Rahman Khan & Aleya Sultana & Ors vs. DLF Southern Homes Pvt. Ltd, Civil appeal no.6239/2019, was decided on 24th August, 2020. It lays down that the Courts are not constrained by the terms provided in the builder’s agreement while awarding compensation to the flat buyer.
Facts of the case:
The Flat Buyers (Appellants) had booked residential flats in Developers (Respondents) project known as Westend Heights at New Town, DLF, BTM Extension at Begu, Bengaluru.
The Flat buyers entered into an Agreement for sale (AFS) with the Developer. The clause for schedule for possession indicated that the Developer will “endeavour” to complete construction within a period of thirty-six months from the date of execution of AFS except for force majeure conditions.
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To ADD: Going by Info., sincer gathered, in terms of and according to Agreement(s) with the buyers, the building project was to be submitted to the KAOA . If so, it is left to anyone’s wild guess why at all the reference is to ‘RWA’ ?!
In this context, attention may be drawn to among others the recent deliberations at the webnar on Oct 4 2020 , sponsored by BAF, being the representative body of RWAs in Bangalore. For details, anyone really interested and having vested concerns may have to contact BAF.
courtesy
OFFHAND
“SC OVERRIDES AGREEMENT while Compensating Flat Buyer for delayed possession”
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The SC has perceptibly done so on the judicious ground that the ‘Agreement’ suffers from the malady of being á ‘one-sided agreement, ‘patently bypassing/cunningly overriding the lawful rights and interests the purchasers are otherwise entitled both in law and equity.
As differently viewed, and critically so, – if were to be based on a well-founded reasoning and sound logic, – there could conceivably be no doubt that the favourable verdict of the SC should not but be of avail to all the buyers of ‘apartments’ (X Flats) in the DLF Project as a whole; and, premised so, should help and support the claim for interest by all ofthem.
Notwithstanding that, in terms of the Judgment delivered by the SC in the civil appeal proceedings, compensatory interest has been, disagreeing with the unfavourable verdict of the NCDRC, directed to be allowed only to the limited group (s) of the buyers who have taken on, got impleaded and directly participated as ‘appellants’ in the subject proceedings.
Should it be duly considered, however, the lawful right of all the buyers, as a class, could have been diligently taken care and sufficiently secured had, – instead of such civil appeal proceedings,- as a matter of prudence and abundant forethought, been taken up to the apex court, by filing a writ (in the form of a PIL, eminently drafted).
Incidentally, as per the narration of the facts, as personally read and understood, even the basic interest of 5% pm., -though admittedly due as per the terms of the contract agreement itself,- does not seem to have been claimed by, and /or allowed to, all the buyers.
The main plank of the stance taken by the buyers is that ‘delays on the part of the developer in handing over possession postpone the date on which purchasers will obtain a home’.
In the larger interests of the purchasers, however, there are quite a few other angles requiring attention to have been drawn to and addressed for adjudication in precise terms; especially, such as in a case in which such purchase is by way of a ‘roll over investment’ in a ‘new asset’, with a view to availing of the entitlement to tax exemption in respect of ‘capital gains ‘otherwise chargeable. This is an aspect on which, for an analytical discussion, suggest referring to the Article displayed @ https://taxguru.in/income-tax/sec-54f-brain-teaser.html.
Over to the concerned buyers for sharing any thoughts/ helpful feedback on the indicted lines; and for pursuing the common grievances , if so advised by an eminent counsel, by relying on the cited SC Verdict ?!
Note: May have MORE to share / re-share and reiterate the other angles of most concern and common relevance wprt the several related Articles likewise displayed on this website itself.