How can a Buyer Take the Legal Route Against the Builder?
Jun 01, 2017 Legal Guidance
Buyers suffer from the unfair practices and unkempt promises made by the builders. Not only they pay for the delay in the project, but also suffer financially. To help put a stop to the unfair and fraudulent practices by the builders, there are certain legal routes that a buyer can take against the developer.
We discuss them here:
1. Civil Court approach:
If the builder commits a breach of the agreement, then the buyer can approach the civil court and file a suit against the builder for the injunction/ damage or refund and interest thereof under the code of civil procedure, 1908.
If the builder commits any fraudulent trade practice, then the buyer can approach the civil court and file the case against the builder for the recovery of the amount paid.
Pros: The buyer can get the immediate order of injunction under O. 39 R 1 & 2 of civil procedure court.
Cons: In civil court, the adjudication of the case is longer than the other remedies. Also, the court fees need to be paid for the amount to be claimed as the part to initiate the proceedings.
The court fees are charged as per the State Act and the fees of the lawyer are charged on the basis of his expertise and the complexity of the case.
2. Consumer forum approach:
Buyer can file the complaint with the consumer forum with two years from the date of the dispute between the builder and them under the section 12 of the consumer protection act. The home buyer can approach the forum provided that he has invested in the property for the personal use and not for commercial purpose.
Pros: Much cheaper as the buyer will not have to pay the fees according to the price of the property.
Cons: It can take years and years to get resolved.
The consumer forum is three tired: the
Tier I – district level consumer forum, address the concerns not exceeding Rs 20 lakhs.
Tier II – state level consumer commission, addresses issues not exceeding Rs 1 crore.
Tier III – national level commission disputes redressal, addresses issue exceed Rs 1 crore.
3. Competition commission:
If the buyer feels that the builder has taken the dominant position in the deal which has been a disadvantage to the buyer, the buyer is free to move to the competition commission of India. The team will investigate the case and if the developer is found guilty, then the strict penalty will be imposed. They have been pretty active since few years.
Pros: The buyer can seek help if the builder is imposing unfair terms and conditions.
Cons: The builder can appeal against the filed case in the court.
The method is cost effective with the fees of Rs 5000.
4. Regulatory Forum:
The recent development of the real estate sector is the implementation of RERA. Buyer can file a complaint under RERA along with the consumer complaint against the builder.
Pros: RERA promises timely delivery and fair means in real estate practices.
Cons: It is fairly new and its effectiveness is yet to be tested.
5. Criminal court:
The buyer can move to the criminal court and file the case against the builder. The complaint should bring out the irregularities by the builder.
Pros: The cases are very fast. A non-bailable warrant can be issued against the builder if he is found guilty.
Cons: Witness needs to be summoned in during the court case.
The legal fee depends on the case entirely.
6. Arbitration:
There is clause ‘arbitration’ in the builder buyer agreement. It is preferred under the Arbitration Act, 1996.
Pros: No need to hire a lawyer. Less time consuming.
Cons: Arbitrators may be biased and can favour the builder.
The cost varies from case to case.
We discuss them here:
1. Civil Court approach:
If the builder commits a breach of the agreement, then the buyer can approach the civil court and file a suit against the builder for the injunction/ damage or refund and interest thereof under the code of civil procedure, 1908.
If the builder commits any fraudulent trade practice, then the buyer can approach the civil court and file the case against the builder for the recovery of the amount paid.
Pros: The buyer can get the immediate order of injunction under O. 39 R 1 & 2 of civil procedure court.
Cons: In civil court, the adjudication of the case is longer than the other remedies. Also, the court fees need to be paid for the amount to be claimed as the part to initiate the proceedings.
The court fees are charged as per the State Act and the fees of the lawyer are charged on the basis of his expertise and the complexity of the case.
2. Consumer forum approach:
Buyer can file the complaint with the consumer forum with two years from the date of the dispute between the builder and them under the section 12 of the consumer protection act. The home buyer can approach the forum provided that he has invested in the property for the personal use and not for commercial purpose.
Pros: Much cheaper as the buyer will not have to pay the fees according to the price of the property.
Cons: It can take years and years to get resolved.
The consumer forum is three tired: the
Tier I – district level consumer forum, address the concerns not exceeding Rs 20 lakhs.
Tier II – state level consumer commission, addresses issues not exceeding Rs 1 crore.
Tier III – national level commission disputes redressal, addresses issue exceed Rs 1 crore.
3. Competition commission:
If the buyer feels that the builder has taken the dominant position in the deal which has been a disadvantage to the buyer, the buyer is free to move to the competition commission of India. The team will investigate the case and if the developer is found guilty, then the strict penalty will be imposed. They have been pretty active since few years.
Pros: The buyer can seek help if the builder is imposing unfair terms and conditions.
Cons: The builder can appeal against the filed case in the court.
The method is cost effective with the fees of Rs 5000.
4. Regulatory Forum:
The recent development of the real estate sector is the implementation of RERA. Buyer can file a complaint under RERA along with the consumer complaint against the builder.
Pros: RERA promises timely delivery and fair means in real estate practices.
Cons: It is fairly new and its effectiveness is yet to be tested.
5. Criminal court:
The buyer can move to the criminal court and file the case against the builder. The complaint should bring out the irregularities by the builder.
Pros: The cases are very fast. A non-bailable warrant can be issued against the builder if he is found guilty.
Cons: Witness needs to be summoned in during the court case.
The legal fee depends on the case entirely.
6. Arbitration:
There is clause ‘arbitration’ in the builder buyer agreement. It is preferred under the Arbitration Act, 1996.
Pros: No need to hire a lawyer. Less time consuming.
Cons: Arbitrators may be biased and can favour the builder.
The cost varies from case to case.
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