Bringing a sigh of relief to many, the National Consumer Disputes Redressal Commission (NCDRC) in an order ruled that the builder cannot hide behind the clause in the builder-buyer agreement to pay Rs. 5 per square feet per month as compensation for delay in handing over the property to the buyer.
A Bench of Dr. SM Kantikar and Dinesh Singh stated in the order that the buyer now has an option to seek even higher compensation from the builder or get a refund of the amount they paid. They observed,
The compensation for delay (Rs 5 per sq ft per month) cannot be for an unreasonably protracted period or indefinite; at best it can be for a short period that would appear to be reasonable and would be acceptable as such to a reasonable man..To say that possession can be delayed indefinitely or unreasonably and a token compensation for delay can be paid indefinitely or for an unreasonably protracted period is erroneous.Indefinite or unreasonable delay with token compensation for delay cannot continue forever without limit (such situation would be absurd).
This came after an appeal filed by Emaar MGF under Section 19 of The Consumer Protection Act, 1986, challenging an order passed in August by the State Commission, Chandigarh.
The NCDRC further observed,
Creating yet further harassment, uncertainty and difficulty for the consumer by delaying payments or making reduced payments etc. (if the adjudication is not stayed or quashed or modified by a higher authority/court) will be an unacceptable situation, to be viewed seriously – the harassment, uncertainty, and difficulty of the consumer should end promptly and fully, the chapter should close. Therefore, if the builder co. delays the adjudicated payments beyond the time stipulated, it would and should attract higher / penal interest and other compensation/costs.
Read the order in the link below