• Delayed penalty not given by the builder

Hi,
I booked a 2 room flat in Aug-2006 with a delivery timeline of 3 years (2009). The builder has now issued me the offer of possession letter (in May-2015) . There is a clear delay of 5-6 years from the promised delivery date. The contract has a penalty clause of 5 rs psft per month. The offer letter issued by builder states that the builder is not liable to pay any penalty if there was any delay in past in the payments made by customer for the demands the builder made. The builder has even added 30K Rs as delayed interest to be paid to the builder. This has come as a surprise as the builder never told me about any late payment. I have always paid in time.
The builder has also stated in the offer of possession letter that since the cost of construction has gone up by 46% since the date of my booking, the escalated cost of around 5.6 Lac should be paid by me to the builder. The builder may excercise his discretion to waive off this amount to arrive at a amicable solution.
It seems the builder is playing all kind of tricks to avoid paying any penalty for delayed possession.
I am yet to negotiate with the builder on this letter. I have following queries:
1. Can builder deny me delayed penalty in case of any delayed payment by me?
2. Can builder ask for cost escalation charges? This is not mentioned in the contract.
3. In case the negotiations doesn't work in my favor, shall I take the flat possession first and then file case in consumer court?
Asked 1 year ago in Property Law from Gurgaon, Haryana
Religion: Hindu
1) if you have not paid instalments on time builder can refuse to pay interest for delayed possession as per the contract 

2) builder cannot demand cost escalation charges as contract does not contain any provision for same 

3) take possession of flat under protest and then move  consumer forum against the builder for deficiency of service 
Ajay Sethi
Advocate, Mumbai
23267 Answers
1219 Consultations
5.0 on 5.0
Hi, it is the duty of the builder to deliver the possession of the buildings as per time and if he fail to deliver the possession of the building he has liable to pay penalty as per Rupees 5 per square feet.

2. From your narration there is no delay in payment so don't pay the Rupees 30,000/- as delayed interest charges and so also you are not liable to pay the escalation charges of sum of Rupees 5 to 6 lacks as it is not in the part of the agreement and also delay  in completing the building is from the builder side so you are not responsible for the delay so you are not liable to pay the escalation charges.

3. It is my considerable opinion better negotiate with the builder and register the property in your name and thereafter file a consumer complaint for recovery of penalty amount.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0
1) it is your case that you have paid all instalments on time 

2) call upon builder to furnish evidence of late payment made by you . Whether he has in his possession any demand letters issued by him ?

3) if there is no late payment you can claim interest for period of delayed possession 

4) also claim rentals if any paid by you for taking any flat on rent 

Ajay Sethi
Advocate, Mumbai
23267 Answers
1219 Consultations
5.0 on 5.0
First accept possession of the flat. 

Once such possession is in your control file a suit for recovery of damages.

Since all these documents are in connection to the same subject property hence these will be regarded as a part of the same contract and according to rules of interpretation the prior clause will always prevail over the latter clause.

Consumer court might be a good option for such delay but you must take possession before filing litigation. This way in case of any stay you stand to benefit from the Status Quo.  

One can ask for many things but adjudication will ultimately happen upon law.
Saptarshi Banerjee
Advocate, Kolkata
183 Answers
4 Consultations
4.9 on 5.0
1.The builder is wrong. He is liable to pay the penalty in accordance with the penalty clause. 

2. Did you default in paying the amount? If the answer is no then you are not liable to pay the delayed interest.

3. The delayed penalty can be set off against the delayed interest, but the differential amount has to be paid by you or builder, as the case may be.

4. In so far as cost escalation charges are concerned the builder can enforce it against you only if the agreement provides for it,

5. You can take the possession under protest by issuing a lawyer's notice to the builder and then go to court against the builder. 
Ashish Davessar
Advocate, Jaipur
18151 Answers
448 Consultations
5.0 on 5.0
1.No,he can not.
 2.No,he can not.
 3.bettet to move Consumer Forum before taking possession.
Minansu Bhadra
Advocate, Kolkata
266 Answers
23 Consultations
4.8 on 5.0
1. All the demands made by the builder are illegal,

2. He should pay the penalty and comply with all the terms of the agreement,

3. Take possession of the flat since otherwise the builder may armtwist you by not giving possession, if you file any case against him,

4. Avoid signing any document giving him no-due certificate,

5. After taking possession of the said property, file a consumer complaint before the local Consumer Forum.
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
5.0 on 5.0
1) you can move consumer forum against the builder  for un fair trade practice and deficency in service . 

2) seek interest for delay in delivery of possession  of 6 years as per the contract 

3) also rentals as you had to pay Rs 9 lakhs towards rent on account of delay in delivery of possession . 

4) delay in making payment by you was nominal on account of signing of TPA between builder and bank . 

5) you are not liable to pay cost escalation charges as builder has delayed delivery for 6 years 

6) please note that cases before consumer forum take 2 years to be disposed of 

7) an amicable settlement is better option 

Ajay Sethi
Advocate, Mumbai
23267 Answers
1219 Consultations
5.0 on 5.0
1. I find no reason in telling the builder that I will pay in protest,

2. Just negotiate with him to pay the least amount and take possession of the flat,

3. If possible, audio record all his unjustified demands and conditions put by him,

4. After getting out of his clutches, file a complaint case before the consumer forum
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
5.0 on 5.0
1. You may in your wisdom agree to the demand raised in the demand letter. It is your call. Once you agree to an offer the contract will come in existence. 

2. However, what the builder is doing is legally wrong. No escalated cost is to be paid if you pay under protest.

3. You may issue a lawyer's notice to the builder to claim the delayed penalty.
Ashish Davessar
Advocate, Jaipur
18151 Answers
448 Consultations
5.0 on 5.0

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