Man denied flat over ‘late payment’, builder penalized

A builder has been ordered to pay Rs 2.25 lakh as compensation to a Kandivli man for terminating a sale agreement for a flat on the grounds of alleged late payment. The Maharashtra State Consumer Disputes Redressal Commission, which passed the order on Wednesday, observed that the act of termination was a perfect example of “law-breakers being smarter than law-makers”. RNA Builders (NG) was directed to hand over the flat within a fortnight after the man pays the full amount.

In September 2009, Dinesh Singh purchased a 558-sq-ft flat at Mira Road for Rs 18.2 lakh. Apart from an initial amount of Rs 2.72 lakh, he paid Rs 51,000. Later, the builder asked for Rs 1.15 lakh. When he went to pay a few days later, the builder did not accept it and Singh was told his booking had been cancelled for non-payment.

In September 2009, Dinesh Singh of Kandivli bought a 558-sq-ft flat at Mira Road for Rs 18.2 lakh. After the initial payments were made, the builder sent a letter demanding Rs 1.15 lakh, which Singh received on April 24, 2010. However, it was not accompanied by the architect’s certificate and the demand was shown towards the plinth work.

On May 5, 2010, Singh visited the site and found that the slab work was still not complete. He was still ready to pay, but the builder did not accept the money. Singh was told that on account of non-payment, the booking had been cancelled. The builder further stated that if Singh wanted to save the booking, he should make the entire payment within a fortnight or enter into a fresh agreement at the new property rates.

Singh contended that the builder demanded the money when it was not due and, by not accepting the money when it was offered, was guilty of a gross deficiency in service. He filed the complaint last year.

The builder argued that the agreement was terminated as Singh was extremely irregular in making payments. The builder said that Singh had agreed that he would pay within 15 days from the date of execution of the agreement and, therefore, a question of stage-wise payment did not arise.

The commission relied on the agreement between the two parties, which said the builder had to notify Singh about each payment and give him 15 days to pay. It held that Singh had tried to pay the amount in time and, thus, there was no breach of agreement on his part. Referring to the agreement, the commission said that, before ‘termination’ of the agreement, the builder neither issued a 14-day prior notice in writing nor refunded the amount. This amounted to a breach of agreement. “There is no proper termination of agreement as contemplated under the agreement and, therefore, we hold that the registered agreement is well in force and rights of the complainant accrued under the said agreement still subsists,” the commission said.

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