Wed. Sep 23rd, 2020

CompAT awarded compound interest 15% p.a. under erstwhile MRTP Act to the victim of Unfair Trade Practice by builder, prayer for delivery of possession, rejected

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Competition Appellate Tribunal: Deciding a transferred case under the erstwhile MRTP Act, 1969, the
Competition Appellate Tribunal held that the delay in delivery of possession of
constructed apartment by the builder and non-disclosure of progress of
construction to the buyer amount to unfair trade practice under section 36-A
(1) of the Act.  The tribunal observed
that unilateral cancellation of allotted flat for the reason the buyer did not
pay the demanded instalment is illegal and arbitrary if the buyer has reasonable
cause for not to pay.

In this case,
the complainant had already paid four instalments but the builder did not
complete the stipulated construction of the flat on time and did not inform the
buyer about the progress of the construction. The builder in its brochure had
promised to hand over the flat in three years but it could not do even in 15
years. The Tribunal taking note of the decisions by consumer courts against the
same builder ruled that activities of the builder were unfair trade practices. The
tribunal also rejected the plea that delay was caused by litigations involving
the builders and the real estate market was down due to non-payment of
instalments by the buyers and demand of refunds.

Relying on the
Supreme Court judgment in Ghaziabad Development Authority v.
Ved Prakash Aggarwal, (2008) 7 SCC 686, the tribunal rejected the prayer of
the complainant for directing the builder to deliver possession of allotted
flat. The Supreme Court had held in that case that MRTP Commission did not have
power of civil court to order specific performance of contract. However, for
serving the ends of justice the tribunal directed the builder to repay the
amount paid by the buyer with compound interest of 15% per annum.   [Manjeet Kaur Monga v. Suneja Towers Pvt. Ltd, decided
on 03.08.2015]
Source: Legal news India

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