Hi, I booked a flat in chennai developed by Marg Properties Ltd in Feb 2011 and the project was supposed to be handed over by Jun 2013. However the builder has not completed even 30% of the project. I have paid 50% of the flat cost and paying ?19000/- as EMI. The UDS has been registered on my name.I request advice from you regarding the method of proceeding against the builder - (a) whether Consumer court or Arbitration as Arbitration clause is incorporated in the Sale and Construction agreement and (b) what are the advantages and disadvantages of both the method?
Asked in Property Law from Chennai, Tamil Nadu
1) cancel your agreement and seek refund with interest
2) if builder fails to pay file complaint before consumer forum
3) consumer forum is an additional remedy and complaint can be filed before consumer forum even if there is arbitration clause in the contract
Shri Satish Kumar Pandey Vs Unitech (2015) SCC Online NCDRC 14,
The commission held that as per S.3 of the Consumer Protection Act, the remedy under the Act is an additional remedy given to the consumers in addition to all other regular remedies available to them and hence a consumer complaint is maintainable even though there is a valid arbitration clause in the contract. This issue came up for consideration of the Hon'ble Supreme Court of India in National Seeds Corporation v. M. Madhusudhan Reddy, (2012) 2 SCC 506 and after taking into consideration the provisions of the Section 8 of the Arbitration and Conciliation Act of 1996 and the Section 3 of the C.P Act it was held that the plain language of Section 3 of the C.P Act makes it clear that the remedy available in that Act is in addition to and not in derogation of the provisions of any other law for the time being in force
Thank you Mr. Ajay Sethi for your advice. May I know the procedure of cancellation of the agreement.
Asked 11 months ago
1) send letter to builder that as per terms of agreement flat was to be handed over by July 2013 . that there has been no progrss in construction and till date 70 per cent of work in pending .
2) under the circumstances you are cancelling the agreement and request builder to refund money paid by you with interest within period of 15 days of receipt of the letter
I request advice from you regarding the method of proceeding against the builder - (a) whether Consumer court or Arbitration as Arbitration clause is incorporated in the Sale and Construction agreement and (b) what are the advantages and disadvantages of both the method?
This has become a trend among the builders these days to include an arbitration clause in the sale agreement whether the buyer is willing or not. Because the buyers know pretty well that they will not not be able to complete the project on time or even with the allowed extension and they are aware that the buyers will straightaway approach consumer forum for getting their grievances redressed including compensation against the builder for delay and mental agony etc.
This arbitration clause will protect them as a shield because the arbitrators will be from their side and they are almost the paid employees of the builder firm.
So you wont be able to get any justice once the matter is referred to an arbitrator who will be lopsided or show partiality to the builder side owing to the faith of the consideration he receives.
This is the clever and cunning tactics adopted by the builders these days.
However nothing forbids you from approaching the consumer forum even if there is an arbitration clause embedded to the sale agreement terms and condition.
You may even decide about cancelling the booking and the sale agreement if the situation is not conducive and not affordable.
May I know the procedure of cancellation of the agreement.
If you are not interested in continuing the booking you may issue a notice to the builder informing that you are terminating the agreement as he had not honored the contract by completing the construction of the flat on time or even after the grace period.
Hence the agreement may be cancelled and the entire booking amount with interest from the date of payment may be refunded within a time stipulated ion the notice to be served on him.
You may consult a local advocate for issuing a legal notice if you decide to serve one on the builder.
Issue a lawyer's notice for cancellation of agreement to the builder and ask him to refund the money paid by you. If he does not accede to your demand then arbitration proceedings have to be initiated. The appointment of arbitrator can be made by the court if either the builder does not appoint an arbitrator or the appointment made by him is not in accordance with the agreement. It was wrong in the first place on your part to have agreed to arbitration proceedings in preference to your remedies before the civil courts as the arbitrators in such cases mostly toe to the line of the builder.
1) arbitration would take around 2 years o be disposed of
2) the costs of arbitration have to be borne by both the parties
3) if the arbitration clause provides that builder shall appoint an arbitrator then the arbitrator may be more biased towards the builder
4) in consumer forum you dont have to pay any fees . it is cheaper to file complaint before consumer forum . it is not necessary that you engage a lawyer .
5) disposal of your complaint would depend upon pendency of cases in consumer forum
You do not require a legal literature. Learn to adopt a practical and not theoretical approach when it comes to initiating a legal battle.