WHEN A MONEY DEMAND BY THE BUILDER IS INVALID

 

(Not depositing money is not violation of terms and conditions)

A consumer often meets with a situation wherein builder issues demand letter as per the agreed terms. He also expects interest in case consumer fails to deposit the money as per agreed payment schedule. Reminder letters are also issued to the customer /purchaser with fresh demand amount which includes interest also. There is a warning also referring to agreement clause by which builder reserves the right to cancel the booking and forfeit the booking amount too.

On the other hand there is all possibility of delay in construction and builder had offered a very low /minimum penalty for his default .Since purchaser does not have equal bargaining power with the builder, hence he signs the agreement.

Consumer is in a fix-builder is unapproachable to listen that construction is not up to the mark and he does not want to pay as per agreed schedule time. If he defaults and waits for his correspondence to reach to some logical resolution, the interest accrues to leaps and bounds and ultimately consumer has to either pay everything or stands on the verge of risk of getting booking cancelled.

Here is a case decided by hon’ble National Commission where in has been clarified that money demand made by the builder can be termed as invalid demand if construction has not started.

In a case of Vinod Kumar Kochar v/s Earh Infrastructure Ltd &others 1(2016) CPJ 183 (NC) decided on 7.9.2015 in complaint case no 174 of 2014. ,one Shri Vinod Kumar Kochara and his wife Karuna Kochar were allotted a residential unit no. 103,Vayu tower,group housing  complex known as Earth Towne at plot no GH-04,Sector-1 ,Greater Noida UP vide allotment letter dated 17.6.2011.The cost of apartment was fixed at Rs 3392550/-and after other charges added up to the tune of Rs 533625/- the total cost of apartment comes to Rs 3926175/-.Complainant paid Rs 10,83,945/- towards part payment .

OP never sent any demand letter for the balance amount, neither there was any work done except for digging work done on the site. Builder cancelled the allotment and forfeited the earnest money alleging non payment of money as scheduled.

It stands admitted by the builder that no work was done in respect of the project in question .Complainant could also establish that he never received any demand letter even. National commission held-

‘Although the complainants were bound to pay the amount as per time shedule, yet they must be made aware and demand notice was to be sent informing them the status of construction. When OP’s have not started work how could they send demand letter. Consequently the cancellation of flat made by OP’s is illegal and invalid. OP must prove that in spite of work done and demand notice sent, complainant has failed to pay. They are entitled to cancel allotment only after that Court went ahead directing OP’s to give interest on the amount already paid to the tune of Rs 1083945/- with 9% interest from the judgment month i.e. Jan 2015 till possession is given.

It stands a landmark order in favour of consumers when builder threats to the customers for cancellation of unit and forces him to go on making payment in spite of the fact no work done.

However every case has its own facts and circumstances and finding of the courts vary in every different circumstance. In the case of Devender Kumar v/s U.P.Awas Vikas Parishad 1(2006) CPJ 188(NC) in revision petition no 3277/2014 decided on 26.5.2014, the order was against the consumer finding him clear defaulter and cancellation of flat was held justified. Complainant had paid registration amount of Rs 5000/- and got allotment on 11.3.1992.He was to pay Rs11, 637/-and Rs 8769 in lump sum and balance money was to be paid in 144 monthly installments of Rs1567/-. Complainant never paid monthly installments .He was sent notice under registered post dated 23.11.1995 which was duly received as per record but remained unanswered. Another letter dated6.9.1996 for cancelling the flat was sent followed by yet another letter of cancellation dated 21.8.1997. Now complainant files complaint with prayer for various prayers in the year 2003, when dismissed for want of jurisdiction, files another complaint in the year 2005 on the same issue before the appropriate case with application for condo nation of delay. The case was defeated on merit and court held cancellation very much valid having all proofs on record against complainant.

………………………………………………………………………………

 

Previous

Next