Errant builder told to pay over 50 lakh to flat applicant

New Delhi: A builder who failed to start a Greater Noida residential project on time has landed in trouble as a consumer court in Delhi has directed him to pay compensation of Rs.3 lakh and refund the over Rs.49 lakh cost of a flat to a complainant.

Delhi Consumer Disputes Redressal Commission member Salma Noor and Member(Judicial) VK Gupta held RS Builtwell and its director guilty of deficiency in service and gave them time till April 30 to refund the entire cost of the 1,248.05 sq ft flat, with interest, and compensation to complainant Arun Patwal, a resident of Janakpuri in west Delhi.

"The complainant had a dream of having his own house, but it was completely shattered by the builder...obviously, this has caused mental agony, harassment and sheer suffering for which we quantify the amount of Rs 3 lakh as compensation," the commission said in a recent order.

Patwal booked the flat in 2007 and was promised possession in March 2010 but when the deadline was not met, he carried out inquiries and found that the project, related to Leaf Tower, Singapore Residency at Greater Noida, had allegedly not even started.

The commission said: "We further direct that in case the amount of Rs 49.92 lakh is not paid within 30 days from the date of this order, the builder shall pay an interest of 12 percent per annum after expiry of these 30 days to the date of the realisation."

"It appears that the builder has adapted a very noble method of collecting the money from the poor customers and dragging such customers to litigation and refusing to refund the payment made by such customers," said Noor.

The builder, based in Vasundhara Enclave in east Delhi, denied allegations of delay in handing over possession of the flat and claimed that no confirmed deadline for delivering the ready flat was given to Patwal.

The commission slammed the builder for his casual approach towards filing his response during the hearing.

"The written statement filed by the builder is not in accordance with law for the reason that in the written statement there is no signature of the authorised signatory and also there is no verification of signature. However, the written statement is signed by the counsel," the commission said.

"The legal position is that the written statement filed by a person or party must be signed by such or authorised signatory in case of a public or private limited company," the commission said.

The builder failed to respond to the allegations of the complainant that there was no development at all or any project was being developed, said Noor.

"The builder has not contended that the project is in full swing or as to what is the status of the project. Nothing has been stated in the written statement whether the project is under development..." the commission said.

"Admittedly, the entire amount (Rs.49.92 lakh) was deposited on Nov 14, 2007, and it is more than five years that there is no construction activity in respect of the project alleged to have been launched by the builder...even the site plan has not been filed by the builder who is getting the fruits of the huge amount for over five years," the commission said.

The commission also dismissed the builder's plea that Patwal was not a consumer and was ineligible to raise the matter under the Consumer Protection Act.

The builder has the option of challenging the state commission's decision in the National Consumer Disputes Redressal Commission.