• Flat under construction: T&C grossly in favor of promoter

Dear Sir,
I have booked an under construction flat in a big project at Rajarhat (Kolkata) in March 2014 for which I have paid Rs 3 lac in March 2014 & Rs 55 thousand in June 2014 (cost of apartment approx 20 lac).I got formal allotment letter in September 2014 where they have mentioned that  “We have already submitted documents to couple of banks & financial institutions for approval of project so that if required, you can avail home loan facility”… “Project approval is under process & is likely to be in place within couple of weeks. We shall start sale agreement thereafter”. They were silent for eight months. In May 2015, they sent a letter requesting execution of sale agreement. However, no bank was ready to extend loan as the project was not approved by a single bank at that point of time. I visited the office of the promoter in June 2015 and was advised to wait for some more time for sanction of bank loan. In spite of that, they sent me a letter in July 2015 mentioning that I have “failed to turn up to execute sale agreement” and their management has decided to give me “15 more days to complete agreement formalities”. Immediately, I wrote a mail to them refusing to execute sale agreement in absence of bank loan. My mail was not replied but I have come to know that recently one public sector bank has agreed to extend bank loan. In the meantime, I have checked their draft sale agreement I found the same ambiguous, incomplete &  grossly one sided. For example, Dag, khatian  or plot numbers are not mentioned in the agreement. Also, reference of chain deeds / link deeds indicating flow of ownerships is missing. Design and building specifications are also not available. Sanctioned master plan / building plan etc are also not shared. This is extremely annoying as I have already become mentally exhausted thanks to numerous follow up with builder and banks during last one & half year. I do not stay in Kolkata and it is extremely difficult for me to interact & negotiate with builder for each issues. They are saying that the project is approved by bank and buyer may see original documents at their office.
I am at my wit’s end as:
(i)	If I do not sign agreement or ask for refund as per the terms of booking they will deduct 30% amount deposited till date. If I delay, they can slap penalty or cancel my booking.
(ii)	If I sign, I’ll have to accept all terms & conditions. The project is big (3000+ flats) and promoters are not likely to arrange a customized agreement for me. Moreover, I have to assume sanctity of all documents & records shown to me. Complications may crop up in future at the time of registration.
(iii)	The project is moving at snail’s pace. The completion period is 3 years, whereas, nothing has happened in last 1.5 years. If project stretches beyond 3.5 years the applicable penalty for promoter will be only Rs 5/- per sqft.
(iv)	Signing agreement also means that if I am forced to come out of the agreement in future at any point of time they’ll deduct 30% of amount deposited till that time.
We put life’s savings while buying a home and it is a matter of mutual trust. Unfortunately, in my case, I am not in a position to trust the promoters anymore. It seems that they have bitten more than they can chew and they do not have resource & expertize to manage a 40 acres project to accommodate 3000+ families.
In this context, please suggest how to proceed.  
To be specific,
(a)	 Is it possible to to come out of the project without losing more money?
(b)	Which property documents should I ask them to provide in case I decide to continue?
(c)	What are the legal options available? Needless to say, quick & cost-effective measures are preferred.
Asked 1 year ago in Property Law from Kolkata, West Bengal
Religion: Hindu
1) take inspection of the title deeds before signing agreement . 

2) check whether they have original chain of documents . 

3) take 30 years search report . 

4) get draft agreement prepared by builder vetted by lawyer . 

5) check track record of builder 

6) you can cancel the booking and seek  refund if  title is not clear and marketable 

7)if builder refuses to refund move consumer forum against the builder and seek refund with interest 

Ajay Sethi
Advocate, Mumbai
23240 Answers
1219 Consultations
5.0 on 5.0
1. The agreements made by the builders are mostly one sided and do not protect the legitimate legal interests of the prospective buyers. So it is always recommended to engage a lawyer of your own to vet the agreement to safeguard your interests. Furthermore, sale agreement should be executed before and not after the remittance of the earnest money.

2. The omission of khata number clouds the entire project in suspicion.

3. The builder is entitled to deduct the cancellation charges mentioned on the booking form. This is something you can avoid only by questioning the legal validity of his project to show that the agreement is not forthcoming on crucial details such as the identification of the land and the antecedent chain of ownership, but this can be done only in a court of law. You may actually end up spending more amount than what you are going to lose towards cancellation charges. The realistic approach will be to issue a legal notice for cancellation.

4. To carry due diligence you require the title deeds from the time of original purchase of the land till the time that the builder acquired the land. You should also ascertain that the property is free from mortgage and that it is not the subject of a dispute in any court of law. 

Ashish Davessar
Advocate, Jaipur
18102 Answers
448 Consultations
5.0 on 5.0
1. Yes, since the project is not approved even after considerable period of time the developer can not force to complete the sale within a short time.
2. Now if you think that the project is not approved within the stipulated time and is not likely to get approved shortly then you can sell cancel the agreement. Giving a clear title is responsibility of the seller.
3. After giving a time to clear the title you can cancel the agreement in which eventuality they can not deduct such a huge amount of money.
4. To safeguard your protection file a case before the consumer forum and seek injunction so they can not cancel the agreement. That would be best suited to you as during the pendency of the case the title may get clear and you get time to make balance payment and register the deed.
Devajyoti Barman
Advocate, Kolkata
5207 Answers
54 Consultations
4.9 on 5.0
1. You should have verified all the documents before making the 1st payment. Without collecting the copy of the sanctioned construction plan, no flat should be purchased,

2.  Send the builder a lawyer's notice asking him to send you the copy of the link deeds, registered Development agreement with the land owners (if he is not the land owner) and POA for selling those flats along with other property documents like parcha, mutation papers etc. within 15 days thereof also asking him to modify the draft copy of he agreement duly incorporating the property details with Dag No. etc.,

3. If he fails to send you those documents, file a consumer complaint case before your local District Consumer Dispute Redressal Forum ( at Barasat in your case) alleging deficiency in service and unfair business practice claiming refund of the amount you have paid with interest at Bank rate, damage and cost.
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
5.0 on 5.0
 I have checked their draft sale agreement I found the same ambiguous, incomplete &  grossly one sided. For example, Dag, khatian  or plot numbers are not mentioned in the agreement. Also, reference of chain deeds / link deeds indicating flow of ownerships is missing. ??
The Khata number should be made known or else there  is no significance/guarantee of the ownership and  subsequent agreements between the original owner and builder/promoter.  This may create suspicion about the project itself also since the bank authorities have not sanctioned loan on this project so far, but  suddenly one bank has come to their  rescue which cannot be  relied upon because that particular bank manager might have been bribed, who knows. The sale agreement may be produced before a local lawyer for his vetting and opinion. 

You may take the title documents  and chain of documents for inspection  along with title search for 30 years.

If you are not satisfied with the   track record of the builder, you may opt to quit the arrangement by cancelling the booking and can quote the reasons for cancellation is due  to builder not producing the documents and other issues on time  as well as failure on his part to start the project etc as grounds for cancellation, if he denies to refund the booking amount, you may approach consumer forum for relief of refund and  compensation due to mental agony suffered due to this. 
T Kalaiselvan
Advocate, Vellore
14026 Answers
127 Consultations
5.0 on 5.0
1) file RTI application with municipal corporation and obtain copy of sanctioned plans 

2) it would mention the  date when plans were sanctioned 

3) you had booked flat on basis of the master plan showing layout of buildings . if plans were changed later it would adversely affect interest of flat purchasers 

4) further all amenities promised in the advertisement have to be provided to flat owner . 

5) you can seek inspection of documents and apply for copy of the same for your record .

6) for sale of flat you need consent of the builder  

7) builder can charge interest if payment not made on time as per clauses agreed at time of booking
Ajay Sethi
Advocate, Mumbai
23240 Answers
1219 Consultations
5.0 on 5.0
(i)	It seems that flat was allocated to us (by letter) even before sanction by competent authority. (might have been sanctioned at a later date). How to establish this (location: Rajarhat, Kolkata)? Can this be a ground to void the agreement and claim refund of advance?
The issue is to be manipulated favoring your expression on the basis of their hidden or non-transparency agenda.  You should draft a a carefully worded letter .



(ii)	The master plan showing layout of buildings in brochure were changed altogether (number of flats almost doubled to 3500 flats) without intimation, which we came to know only at the spot of lottery. Master plan in website was updated much later.
Even this can be cited as a reason for cancellation of booking. 


(iii)	New clauses introduced in sale agreement, which were not there in terms & conditions I have signed at the time of booking. Is it possible to come out of agreement citing that new clauses are not acceptable?
If the added new clauses are not agreeable, you can protest and walk out.


(iv)	Amenities / facilities advertised in newspaper are not appearing in agreement. None of the banks (whose name appeared in advertisement around a year back) have approved the project.
Also, please suggest on the below issues:
If the cited banks did not approve the loan, the project is clouded with mystery, you need not proceed and can mention that the facilities advertised are not included in the agreement.



a.	They are ready to show documents but not willing to handover copies. Later they might disown a particular document. How to address this.
You have to insist on the copies of the documents shown to you and can quote that you need to get opinion fro your own lawyer, if it is not acceptable, you may refuse to sign he agreement.


b.	If the matter is taken to court probably the property cannot be transferred / sold. If I issue legal notice today, is it legally correct to transfer / sale the property in case a buyer is willing to buy as per the existing T&C imposed by promoter?
It depends on the situations prevailing at your end, If there is buyer willing to buy despite ware of the pending litigation, it will be solely his risk. 



c.	As per the letter from promoter 1st instalment is payable within 30 days of sale agreement. In case I do not execute agreement for the above reasons and communicate the promoter by mail / registered post, can they really charge interest?
If you have entered into the agreement you re bound to honor it or else it will be treated as breach of agreement and the penalty whatever to be paid.
T Kalaiselvan
Advocate, Vellore
14026 Answers
127 Consultations
5.0 on 5.0
1. The discrepancies mentioned in (i) to (iv) are enough to file complaint case against the builder before the Consumer forum. You send the builder a legal notice asking for the documents which they are legally bound to shoe you with in 7  days,

2. These are two separate issues. You can write to the buyer asking for document or for your grievance which does not bar you from selling the flat to anyone else,

3. You have not mentioned as to what terms and conditions have been stipulated in the agreement. If it has been mentioned there in that interest will be charged then they will charge the interest. They may forfeit the booking amount also if that is mentioned in the said agreement. 
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
5.0 on 5.0

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