Severe Deficiency in Service and Unfair Trade Practices by Builder Leads to Compensation for Mental Agony and Legal Costs
In a landmark ruling, the Maharashtra State Consumer Disputes Redressal Commission in Mumbai has ordered a builder to refund Rs. 1.05 crore along with interest to the complainants, Mr. Mohamed Jalil Abdulla Harnekar and his wife, for failing to deliver possession of a flat and indulging in unfair trade practices. The commission, presided over by Ms. Poonam V. Maharshi and Dr. Nisha Amol Chavhan, found the builder guilty of severe deficiency in service and fraudulent practices.
The case involved a series of transactions and failures by the builder, Mr. Saquib Shaikh Ahmed Mukadam and his associated firms, spanning over a decade. The complainants had initially booked a flat in the "Dongri Project" in 2013, paying Rs. 40 lakh. Despite full payment, the builder neither constructed the flat nor executed the requisite sale agreement. Instead, they transferred the complainants to another project, "Bay View" in Mazgaon, for a total consideration of Rs. 90 lakh, which the complainants paid in full by 2018.
However, the builder again failed to deliver possession and clandestinely sold the flat to a third party. Despite repeated admissions of liability and assurances of refund through Memorandums of Understanding and cheque payments, the builder defaulted, issuing cheques that were dishonoured due to insufficient funds.
The commission concluded that the builder's actions constituted a clear case of deficiency in service under Section 2(11) and unfair trade practices under Section 2(47) of the Consumer Protection Act, 2019. The complainants were awarded a refund of Rs. 1.05 crore with 10% interest per annum from the date of the Memorandum of Understanding, along with Rs. 50,000 as compensation for mental agony and Rs. 25,000 towards litigation costs. Failure to comply within 60 days will result in an increased interest rate of 15% per annum on the principal amount.
The decision reaffirms consumer rights against unscrupulous builders, emphasizing the importance of transparency and accountability in real estate transactions.
Bottom Line:
Consumer Protection Act, 2019 - Deficiency in service and unfair trade practices by builders - Failure to deliver possession, execute statutory agreement, and refund money after receiving full consideration amounts to deficiency in service and unfair trade practices.
Statutory provision(s):
Consumer Protection Act, 2019 Sections 2(11), 2(47), 69; Maharashtra Ownership Flats Act, 1963 Section 4; Negotiable Instruments Act, 1881 Section 138
