Housing Construction and Commercial Complex

BY Anju D. Aggarwal.

Posted on 20 March 2001

The need for a house is a primary need of the people . Many people stay in rented houses and book a flat either with ht builder or with a housing board in the hope that they will get to occupy the same on the conclusion of a specified period . However , generally there has been some delay in the construction of the flats or in the execution of the sale-deed with the result that there have been many cases where people are enable to occupy the flat or use it on the stipulated date.

It was under these circumstances that the enactment of the Consumer Protection Act 1986 was welcomed by the purchaser of the flats because it provided a speedy and inexpensive remedy to settle the disputes regarding flats, etc. During the short existence of this legislation , there have been any cases throughout the length and breadth of this country in the various consumer foras set-up under the Consumer protection Act.

A very early decision to which reference can be made is that of the Maharashtra State Consumer Disputes Redressal Commission , New Bombay , dated 6^th august 1990 in the case of the Secretary , Staywell Co-operative Housing Society Ltd., Nagpur against the Nagpur Housing and Area Development Board ,Nagpur. In this case , the contentions of the society before the Maharashtra State Commission were as follows :- (1) The Board recovered the last instalment of Rs. 36,000/- with 18 per cent interest from all tenement holders earlier than it should have ads result of which an amount of Rs.2,000/-to Rs.4,000/- had been recovered in excess of the agreed amount .(2) The rent paid by the tenement holders for their stay in rented premises during the delayed period of getting possession of the houses should be refunded to the tenement holders. (3) The tenement holders were required to pay Rs.40/- p.m. to the Board from the date of possession towards ground rent. In the adjoining area, the ground rent was Rs.8 to Rs. 10 per annum . (4 ) Each tenement holder deposited Rs.1,45,000/- with the Board towards the registration expenses for executing the sale-deeds of tenements to the tenement holders .(5) The Board recovered from each tenement holder Rs. 50/- per month towards “maintenance”.

In the order passed by the Maharashtra State Commission , the opposite party , that is , the Nagpur Housing and Area Development Board ,Nagpur , were directed to pay interest at the rate of Rs. 9 per cent per annum to each member of the stay Well Co-operative Housing Society , Nagpur , on the total amount of Rs.1,45,000/- deposited with the Board for 11 month (that is from 30^th June 1986 till the date of actual possession of the tenement given to the member of the complainant society ). Similarly , the opposite party , the Board shall refund the amount of excess recovery of Rs.24/- per month towards the ground rent from the members of the society .

The opposite party , the Board was directed to execute the sale-deed in respect of the tenements allotted to the members of the complainant society, within a period of three months from the date of this order in favour of the complainant-society as per the Rules and Regulations.

Regarding the payment of rent by the tenement holders for their stay in rented premises during the delayed period of getting possession kof the houses and the maintenance charges ,the Maharashtra State Commission held the view that the Board of ficial and the Society should settle it by mutual understanding .

The important decision of the Maharashtra State Commission has since been upheld by the National Consumer Disputes Redressal Commission, New Delhi ,by its order dated 18^th August 1993 in Appeal No. 102 of 1990.

As already pointed out there have been innumerable decisions in Consumer Forums concerning builders and flatowners . These decisions have been rendered mostly on the ground of “deficiency in service”. Which expression has been defined in section 2(1) (g) and section 2(1) (o) of the Consumer Protection Act . In cases of delay in giving possession of the flats, the consumer forums have directed the refund of the amount deposited by the potential purchasers with the builder/housing board along with 18 per cent. In another case, besides issuing order for refund of the entire amount of Rs. 1,09,000 deposited and payment of 18 per cent interest , the builder was also ordered to pay Rs. 1 lakh as further compensation .

The activity of housing of housing construction developed to such a great extent that the Central Government had to amend the definition of service in CPA by inserting the words, “housing construction” so as to make it clear that all matters connected with housing construction come under the purview of the Consumer Protection Act.

The Consumer Protection Act now specifically authorises the authorities mentioned therein to order removal of the defects or the deficiencies in the defects or the deficiencies in the services in question . (Section 14 (1) (e) . As such suitable order can be passed in a case where cracks had developed suitable order can be passed in a case where cracks had developed subsequently in the roof of a flat purchased some time back.

Whether construction of a “Commercial Complex” is covered by the words “Housing Construction” (the words “Housing Construction” have recently been inserted in the Consumer Protection Act) requires an authoritative interpretation.

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