Case Name: Unnamed Homebuyer vs Chintels India
The National Consumer Disputes Redressal Commission, led by Justice Ram Surat Maurya and member Bharatkumar Pandya, recently ruled in favor of a builder, asserting that a homebuyer is legally bound to accept possession of a property once an occupation certificate has been issued. Failing to do so counts as a violation of the contract.
The homebuyer initially filed a complaint against Chintels India, alleging that the property developer had failed to deliver a livable flat within the agreed-upon timeframe. The buyer had made an advance payment for the flat, whose base sale price was Rs. 21,701,050, excluding taxes.
As per the agreement, the builder was to hand over the flat within 36 months from the start of construction, in addition to a six-month grace period. If there was a delay in possession, the agreement allowed for the buyer to request a refund with a 90-day notice. When the 42-month period ended, the builder issued a possession letter to the buyer and asked for a final payment of Rs. 4,595,188, not including stamp duty and registration charges. The buyer, however, claimed that the flat was still unfinished and uninhabitable, demanding a refund of Rs. 20,013,951 along with an interest of 24% per annum from the deposit date to the refund date. The buyer also sought compensation for deficient service.
Chintels India countered these allegations, stating that they had requested an occupation certificate before offering possession to the buyer. They highlighted that a slight delay in construction had allowed them an extension under the agreement. The builder denied claims of the flat being incomplete or uninhabitable upon the date of possession offer. They argued that if the buyer invoked clause 12 of the agreement, they would not be entitled to any interest on the deposit. They also pointed out that the buyer had obtained a loan from India Infoline Housing Finance Limited and the flat was mortgaged, but the finance company was not included as a party in the complaint.
The Commission sided with the builder, noting that there was no unreasonable delay in offering possession to the complainant. The buyer’s claim of incomplete construction was not supported by any local commission’s decision. The panel referred to the case of Ireo Grace Realtech Private Limited Vs. Abhishek Khanna, which established that the issuance of an occupation certificate is prima facie evidence of construction completion.
The panel emphasized that the homebuyer is legally obligated to accept the property once an occupation certificate is issued. Since the buyer declined to take possession, they were in breach of contract, resulting in the forfeiture of earnest money, which is defined as the booking amount in the agreement. The panel, however, stressed that such forfeiture must be reasonable and not resemble a penalty.
In conclusion, the Commission ruled that the builder should refund the entire deposit to the buyer, minus 10% of the basic sale price as forfeiture, with an interest of 9% per annum from the deposit date to the refund date. This case underscores the importance of the occupation certificate and the contractual obligation it places on the homebuyer, thereby offering an important lesson to all potential property buyers.
