• Recovery of monies paid to builder for deficiency in service

I have filed a case against a Builder in State Consumer Forum Chennai seeking full refund of monies paid to builder alongwith interest. The builder had committed deviations from sanctioned plan and is unable to obtain Completion certificate. The trial will come up shortly.  Although I am confident that the award will be given in my favour, I am anticipating that the Builder will file an Insolvency petition and try to evade his liability. I seek the following guidance from you:

1. Whether I can seek a prayer in restraining the builder from alienating or mortgaging any of his properties till the disposal of the case.
2. Whether I can seek a prayer calling for an affidavit from the builder giving details of all his properties in his name and wife (wife is also a Director in the Company which is promoting the project).
3. I builder files his insolvency petition what are the options available to me either for recovery of the monies or seeking imprisonment. 

Ravindran Subramanian
Asked 1 year ago in Civil Law from Pune, Maharashtra
1. Yes you can indeed file injunction petition seeking such reliefs.
2. No he can not do so.
3. Fight the case on merit. It's prematured now.
Devajyoti Barman
Advocate, Kolkata
5222 Answers
54 Consultations
4.9 on 5.0
1) if the  agreement is signed with  company  owned by builder  you can seek injunction restraining the company  from alienating or mortgaging properties till disposal of the case 

2) no injunction would be granted in respect personal property of builder and his wife 

3) you can take search in ROC and obtain details of properties owned by the company 

4) the company is bound to comply with court orders for refund of your money with interest . if it fails to do so file winding up petition against the company or take execution proceedings against the company 

5) insolvency of one of the directors of the company does not absolve the company to pay off its dues to its creditors 
Ajay Sethi
Advocate, Mumbai
23279 Answers
1219 Consultations
5.0 on 5.0
Hi,

1. Yes you can move application seeking injunction from creating third party rights and not to alienate the property
2. you can move application seeking a court order t the builder to disclose his properties along with the injunction application.
3.There is unlikely builder file for insolvency, but if he does forgoing his all future business , you will not be able to recover money till he is out of it and there is no imprisonment for non payment of dues once he is a declared insolvent by court. 
 
Thresiamma G. Mathew
Advocate, Mumbai
1316 Answers
85 Consultations
5.0 on 5.0
1. Whether I can seek a prayer in restraining the builder from alienating or mortgaging any of his properties till the disposal of the case.
Yes, you can move an application for injunction seeking to restrain the builder from alienating the property till the disposal of the main case. 


2. Whether I can seek a prayer calling for an affidavit from the builder giving details of all his properties in his name and wife (wife is also a Director in the Company which is promoting the project).
After a decree comes in your favor and if you are filing an execution petition, in that you can ask for the details by filing a memo but that will be pertaining to his own properties and assets alone and not his wife.



3. I builder files his insolvency petition what are the options available to me either for recovery of the monies or seeking imprisonment. 
The builder is unlikely to file an IP for this property alone, if he does it, he may lose all the other properties that he is into constructions now.  However an insolvent, if declared by court cannot be arrested. 


T Kalaiselvan
Advocate, Vellore
14056 Answers
127 Consultations
5.0 on 5.0
1. You should have moved the civil court instead of consumer forum as insolvency cannot be ordered during the pendency of the suit for recovery of money. Be that as it may, if he files for insolvency you can contest his claim by entering defence.

2. If you apprehend that he may alienate the properties to evade the enforcement of the order of the consumer forum then you may seek injunction from the civil court.
Ashish Davessar
Advocate, Jaipur
18158 Answers
449 Consultations
5.0 on 5.0
1. Yes, you can seek order restraining the builder from dealing with all his properties till the disposal of the consumer case,

2. You can file such application but it may delay your main application. It is unlikely that the company and/or its directors will file insolvency petition to avoid paying your money back,

3. Get order for recovery of the amount. If he fails to pay the same after filing the execution petition, he will certainly go to jail.
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
5.0 on 5.0
1. It is very unlikely that the builder will seek to be declared as insolvent to avoid refunding your money,

2. Insolvents loose several rights which no sane person will try to be declared for not a very high amount.
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
5.0 on 5.0
Hi, in the consumer court you can't pray for injuctive remedy so you can file a application seeking prayer for alienating or mortgaging properties or another reliefs. 

2. Suppose if the builder is filling a insolvency petition, you are also making party in the petition and you have to contest the case on merits.

3. In consumer court you have to plead deficiency of services not more than that. 
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0
1) you have  entered into agreement with company for purchase of flat . 

2) if flat has not been constructed your cause of action is against the company and not its directors . 

3) if there is siphoning of funds by directors of the company into persona account then action can be taken against the directors . 

4) it is better that all flat purchasers join hands and lodge criminal complaint against company and its directors for cheating , criminal breach of trust with EOW 
Ajay Sethi
Advocate, Mumbai
23279 Answers
1219 Consultations
5.0 on 5.0
First of all you should understand the position of law to your situation which has been very clearly explained by many lawyers here. 
You may be having plenty of ideas to take revenge on the builder, but what is legally permissible has been told to you.
Winding up is another option that can be utilised.  
Any action will be against the company and its partners and their assets and not beyond that. 
You can search for any such settled laws which can suit  your taste.
T Kalaiselvan
Advocate, Vellore
14056 Answers
127 Consultations
5.0 on 5.0
1. File a complaint case before the local district Consumer Dispute Redressal Forum alleging deficiency in service and unfair business practice claiming refund of the amount paid with interest, damage and cost. You can also file an application for attachment of their  properties till the amount is paid and to realise the dues after selling the said attached properties,

2. After getting favourable order file an execution petition foe executing the order or arrest if the order is not complied with within a specified time.
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
5.0 on 5.0
The personal property of the directors cannot be attached and sold except if fraud has been proved. You just cannot make them liable under the civil law unless fraud has been proved. Fashionable statements such as ''Spirit of law will be violated if the promoter goes scot free'', which do not reflect the correct legal position, will not help you. First understand what is the spirit of law. Judgments will not help you.
Ashish Davessar
Advocate, Jaipur
18158 Answers
449 Consultations
5.0 on 5.0

Ask a Lawyer

Get legal answers from top-rated lawyers in 1 hour. It's quick, easy, and anonymous!
Ask a Lawyer

Civil Lawyers

T Kalaiselvan
Advocate, Vellore
14056 Answers
127 Consultations
5.0 on 5.0
Ajay Sethi
Advocate, Mumbai
23279 Answers
1219 Consultations
5.0 on 5.0
Ashish Davessar
Advocate, Jaipur
18158 Answers
449 Consultations
5.0 on 5.0
Krishna Kishore Ganguly
Advocate, Kolkata
12113 Answers
231 Consultations
5.0 on 5.0
Nadeem Qureshi
Advocate, New Delhi
3534 Answers
130 Consultations
4.9 on 5.0
Rajgopalan Sripathi
Advocate, Hyderabad
868 Answers
43 Consultations
5.0 on 5.0
Atulay Nehra
Advocate, Noida
436 Answers
15 Consultations
4.7 on 5.0
Shivendra Pratap Singh
Advocate, Lucknow
2752 Answers
41 Consultations
4.9 on 5.0
Ajay N S
Advocate, Ernakulam
1916 Answers
19 Consultations
5.0 on 5.0
S J Mathew
Advocate, Mumbai
1950 Answers
65 Consultations
5.0 on 5.0