• Extreme delay in giving possesion of appartment

Sir,

I purchased an under construction 3-BHK apartment from Prestige constructions in Bangalore on Aug 6th 2015 from a person X that had originally purchased it from Prestige in Feb 2012 and as per his agreement with the builder the possession date was on or before Dec 2014 with an additional 6 month grace period . At the time i purchased it (Aug 2015) since it was anyways past the 6 month grace period i was sure to get possession shortly in a couple of months and i was also ready to wait until the year end of 2015 for possession which was indeed 1 year from the promised date. But the builder kept on pushing the possession date further and further from time to time and now the latest I hear from Prestige is that my flat would be ready for possession by Dec 2016 without a guarantee that it wouldn't not be pushed further.

When i checked with the builder as to why this extreme delay and what is the guarantee that they will not push the date beyond Dec 2016 and also told them that I was under a great loss paying both my current house rent (25K), home loan EMI (60K) and still not getting any income tax benefit since the property was not under possession, i wanted to see what compensation will they give for such an unacceptable delay, to my surprise, they sent me the following email after which i am agitated and wanting to take a legal recourse:
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Date: 13 Jul 2016 18:39
Subject: RE: PT 13156 - extreme delay in completion of project
To: "Mohd Saifuddin" <mohd.saifuddin@prestigeconstructions.com>, "Dennis A" <mailstodennis@gmail.com>
Cc: "Kushal Dutta" <kushal.dutta@prestigeconstructions.com>

Dear Sir,
 
In 2012 Honourable Supreme Court (SC) of India in its landmark judgement on 27 February 2012 had directed all Union Territories and State Governments to seek Environmental Clearances (EC) from Ministry of Environment, Forest & Climate Change (MoEF&CC) for mining minor minerals even in less than 5 ha or renew the same after prior approval from the MoEF&CC. Before this order, mining areas of less than 5 ha were exempted from EC enacted under Environmental Impact Assessment (EIA)-2006. The SC also observed that quarrying excessive in-stream sand causes the degradation of rivers as it lowers the riverbed which may lead to bank erosion and result in destruction of aquatic and riparian habitats as well.
 
In 2013, observing continuous violations of environmental norms in riverbed quarrying, NGT on 05 August 2013 ordered a ban on sand excavation across the country without seeking prior approval for the same from State Environment Impact Assessment Authority (SEIAA) and MoEF&CC. The green court also directed all concerned departments in States to ensure compliance of its orders. Further in November 2013, bringing sand mining rule formation under MoEF&CC ambit, NGT stated that environment is a subject of Central govt. and States can’t frame sand mining rules separately.
 
Since these judgements were delivered during the construction phase of Prestige Tranquility and hence the delay was beyond our control, we are exercising our right to get reasonable extension as per the clause 5(b) of the construction agreement and will not be paying compensation for the delay.
 
We thank you for your support and understanding on this."

END OF EMAIL....
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Now the very reason I purchased an "almost-ready" for possession flat by paying an extra premium on per SFT rate although there were other similar builders offering flats at a much cheaper rate/ SFT (of course with a 2 - 3 year time frame in possession which didnt suit me) is because i could save on my rent and also get income tax benefit starting  mid or end of 2015.

I would also like to quote the clause 5 (a), (b), (c) & (d) verbatim as in the original agreement with Mr. X & prestige constructions as follows:

Clause 5 under the original construction agreement between Mr. x (first buyer) and Prestige construction

********BEGINNING OF CLAUSE 5*******

5) Delivery of possession

5) a. The developer shall complete the construction of the apartment and deliver the possession of the same to the purchaser on or before 31/12/2014, with a grace time of additional six months in case of delay without having to pay the purchaser any interest or damages. The developer shall make effort to obtain electrical, water and sanitary connections (as applicable) within the stipulated time, however the developer shall not be responsible for any delays in obtaining such connections, clearances, certificates from the statutory bodies, authorities and the purchaser shall not be entitled to claim any damages against the developer on the ground of such delay, provided there is no delay on the part of the developer in applying for the above connections and the developer has complied with all the legal requirements for securing the same.

5(b) The developer shall not be liable if they are unable to complete the construction of the apartment and deliver possession by the aforesaid date by reason of civil or military commotion, strikes, bundh, lock outs or any act of god or if the delay is a result of any rule, notification of government, municipal authority, any court, and/or any other public or competent authority prohibiting construction activities and/or general non-availability of construction materials and/or for the reasons beyond the control of the developer. In any of the aforesaid events, the developer shall be entitled to reasonable extension of time for delivery of possession of the apartment and the purchaser shall not be entitled to terminate this agreement and claim refund of the amount paid.

5(c)  The developer hereby agrees that they are liable to pay the purchaser interest @ 9% PA on the amounts paid under this agreement for any delay in delivery of possession of the apartment, not attributable to any of the reasons stated above, after the lapse of the grace time, provided the purchaser has paid all the amount payable as per the payment schedule agreed above and there has been no default by the purchaser.

5(d) Possession of the apartment will be delivered to the purchaser by the developer after the same is ready for use and occupation, subject to the receipt of all the amounts due and payable by the purchaser under this agreement.

********END OF CLAUSE 5*******

Sir, I understand that the new real estate regulatory act has given considerable powers to the consumers that are being harassed and fleeced by the big real estate companies and given us extra  power to take the legal recourse against developer for extreme delays such as this, What are my options now to get compensation for the delay?

Regards,
Dennis
Asked 5 months ago in Property Law from Bangalore, Karnataka
Religion: Christian
1) you have to file complaint before consumer forum to claim compensation for delay in delivery of possession . Claim rentals paid by you fir alternative flat 

2) as far as new real estate regulatory act is concerned rules have not yet been framed 

3) the builder is taking defence of force make urge consigns that suspension of work was due to reasons beyond its control 

4) st time of purchase of flat in August 2015 builder was bound to inform you that project would not be completed on time 

5) contact a local lawyer
Ajay Sethi
Advocate, Mumbai
23116 Answers
1214 Consultations
5.0 on 5.0
Hi
1) From the contents of the mail, it is evident that you are eligible to claim compensation from Prestige builders.  

2) In many recent judgments by the national consumer disputes redressal commission has been acting tough against builders like Unitech, Shobha, Parsavanath and also prestige(for their other projects), 
The dispute redressal commission have been issuing orders to 
a) pay an interest of 18% per annum in case of buyer's opting out of the builder buyer agreement.
or
b) Pay an interest of 8% per annum in case of delayed possession plus reimbursement of alternative accommodation costs in case the buyer has incurred rental expenses from the date of original scheduled handover date to the actual possession date.

3) It looks like you have a good case on hand to approach the National(for purchases above 1crore)/ State (for purchases above Rs20lakh to 1 crore).

4) Need to know whether you have entered in to any direct  agreement with Prestige constructions as it appears that you have purchased it from X who in turn has entered in to agreement with Prestige Constructions.

Hope this helps.
Rajgopalan Sripathi
Advocate, Hyderabad
869 Answers
43 Consultations
5.0 on 5.0
1) it is necessary to peruse the tripartite agreement entered into between seller you and purchaser 

2) if you have any letter or email wherein builder promises to deliver flat within stipulated period then you can file complaint against the builder and recover interest for delay in delivery of possession 
Ajay Sethi
Advocate, Mumbai
23116 Answers
1214 Consultations
5.0 on 5.0
The builder/developer cannot wash away his responsibility or liability this way quoting some flimsy reason.  
This is not a force majure situation that the developer is trying to take shelter under it. 
The developer is liable to pay for the delay and he cannot play with the law  as per his whims and fancies saying that he could not procure construction materials or any other reason.
The developer is very big and reputed firm who cannot hide under the blanket disclaiming his responsibility quoting the irrelevant judgement to his situation.
This act of the developer can be even termed as a fraudulent activity to cheat the buyers for the reasons known only to the developer.
You can initiate legal action through consumer forum demanding interest at the rate of 18% p.a. for the entire period of delay  in possession till this date. 
The new real estate law has not come into force with proper provisions in this regard though the hearsay information is favoring the buyers. 
Please make sure that the sale agreement has been transferred to your name from the previous buyer with NOC from the developer.
T Kalaiselvan
Advocate, Vellore
13931 Answers
127 Consultations
5.0 on 5.0
Yes, i have entered into an tripartite agreement with Mr.x, myself and prestige which says that the appartment has been sold to me by X and prestige acklowledges that by being a consenting witness. however the time lines on possessions/ delay in possession are not mentioned in my agreement, its just a simple resale agreement between the 3 of us. do you think i have a chance if i approach the NCDRC?

If the tripartite agreement has been made among you three, then you are an authorised buyer as per the re cords  and you can very well claim all the benefits as is mentioned in the original sale agreement entered between the developer and the previous buyer.All the conditions are applicable to you and nothing can be excluded from it.
You can certainly approach consumer forum.
Please be aware that if the claim amount is less than Rs. 20 lakhs then you can approach the district consumer forum only and if it is between Rs. 20 lakhs and 1 crore then you can approach state commission for relief and anything beyond 1 crore then you can approach national commission.Therefore you cannot approach National commission directly with your grievance if the financial jurisdiction is less than that of 1 crore.
T Kalaiselvan
Advocate, Vellore
13931 Answers
127 Consultations
5.0 on 5.0
Hi 
You will win your case  at NCDRC, Delhi
 
Prestige builders are already having a tough time at NCDRC.
Rajgopalan Sripathi
Advocate, Hyderabad
869 Answers
43 Consultations
5.0 on 5.0
1. The legal recourse begins by serving a lawyer's notice to the builder to deliver the possession forthwith and also compensate you for the delay. If the builder does not fall in in line then you may move the consumer forum for these reliefs.

2. You are also at liberty to cancel the booking. The cancellation will not impair your right to claim compensation for the delay.

3. If there is no time limit as to the delivery of possession the delivery has to be made within a reasonable time. The builder cannot perpetually delay the delivery.
Ashish Davessar
Advocate, Jaipur
18057 Answers
445 Consultations
5.0 on 5.0

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