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Compensation to Buyer for Delay in Handing over Possession by Promoter or Builder in West Bengal and Kolkata

Introduction:

A very interesting topic has been discussed here about compensation to the buyer for delay in handing over possession by promoter or builder in West Bengal and Kolkata. An effort has been made to put the related provisions at one place and explain the topic in a simple language as possible. Due to increasing population, apartment demand has risen and thereby disputes related to property has also increased ten-fold. There are many promoters or builders who commit unfair practices and the most common unfair practice among them is the delay in handing over possession of the flats or apartments. So, there are different relief provisions given under different Acts in India to protect the buyers from these types of evil acts. There are different provisions discussed under West Bengal Housing Industry Regulation Act, 2017, such as Section 21 which explains Composition of Authority, Section 45 defines Composition of Appellate Tribunal, Section 18 says about Return of amount and compensation, Section 31 Defines About Filing of Complaints read with Rule 18 of the West Bengal Housing Industry Regulation Rules, 2018 defines Rate of interest payable by the promoter to the allottee under Section 13. Along with case law analysis, this discussion focuses on the provisions for compensation to be paid to the buyer in case there is delay in handing over possession by the promoter or builder in West Bengal and Kolkata.

West Bengal Housing Industry Regulation Act, 2017:

In simple words, Section 21 of the Act explains the Composition of Authority and it further says that this authority should contain one chairperson and not less than two members who are appointed by the state government. Section 45 says about the composition of Appellate Tribunal. This Tribunal consists of one chairman and not less than two members. One of the members will be a Judicial Magistrate and another would be a technical or administrative member. These authorities work for the aggrieved people who come under this category as discussed above and below of the discussion. Now Section 18 which defines the return of amount and compensation. This section clearly says that if the promoter or builder fails to deliver the possession on time according to the agreement made between the parties then the buyer can claim a refund of money and claim compensation from the builder or promoter. Any person can file a complaint under section 31 of the West Bengal Housing Industry Regulation Act, 2017 and this complaint is filed online through hira.wb.gov.in. There are other provisions such as Section 40 which explains about the recovery of interest or penalty or compensation and enforcement of an order. This Section says that if any promoter or builder fails to give interest or compensation which is imposed on him shall be recovered according to the law as specified in this section and if an order is passed by the Regulatory Authority or Appellate Tribunal against the promoter or builder and they are not complying with the order then necessary action will be taken against them according to the law mentioned in the Section. There is another important Section that is Section 58 which defines the Appeal to High Court. This section provides that if any person is aggrieved by the promoter or builder and files a complaint in the Regulatory Authority or Appellate Tribunal then if they don’t get a satisfying justice from the Regulatory Authority or Appellate Tribunal then they can appeal to the High Court for further justice.

West Bengal Housing Industry Regulation Rules, 2018:

The rules and regulations mentioned in the West Bengal Housing Industry Regulation Rules, 2018 deals with housing industry. Rule 18 of the West Bengal Housing Industry Regulation Rules, 2018 discusses the rate of interest payable by the promoter and the allottee under Section 13 and further, it says that the interest payable shall be the State Bank of India Prime Lending Rate plus 2 per cent per annum in case of delay in payment and delay in handing over the possession. There is another rule that is timelines for a refund which is explained under Rule 19 of the West Bengal Housing Industry Regulation Rules, 2018. This rule says that any refund of money along with interest which is payable by the promoter to the home buyer should be paid within 40 days from the date on which refund becomes due.

Filing of Online Complaint:

West Bengal Housing Industry Regulatory Authority takes up complaints under section 31 of the West Bengal Housing Industry Regulatory Act, 2017 and these complaints are filed online by the aggrieved party. This authority hears complaints on a regular basis from 11 am to 2:30 pm on working days. The proceedings of the cases can be seen at hira.wb.gov.in website.

These complaints are filed online under section 31 of the Act, 2017 by paying a fee of Rs. 1000 and it is paid by net banking or debit card under Rule 36(1) of the Rules, 2018.

Users can create their login id at the website (hira.wb.gov.in) and can follow the steps to file a complaint online as specified at the website.

Complainants should download the complaint petition from the website and then they should sign it and again upload it in the same portal. Complainants should also sign the hard copies along with supporting documents and then file it to the West Bengal Housing Industry Regulatory Authority office. The complainants must specify their address so that the authority can send them notice. Complainants are required to attend the hearings or they can send their family members for hearings. These types of cases require 45 to 60 days for its final disposal or justification.

Complaint and Case Analysis (West Bengal Housing Industry Regulatory Authority):

“Shri. Siba Kumar Mukhopadhyay (Complainants) and Shri. Samar Nag MD of Shelter Projects Ltd (Respondent)”

In this complaint, it is seen that the complainant has booked two flats and the total cost of the flats were Rs. 14,67,746. Complainant filed a complaint against the respondent because there was no written communication for the post-payment after making several phone calls by the complainants and finally complainants met the respondent and made an agreement that holds that the project would start within 18 months from the date of the agreement. Complaints again found that there was no contact from the respondent’s side and then he filed a complaint about the delay in possession. The Authority (West Bengal Housing Industry Regulatory Authority) held that the respondent must return the whole amount along with 12% pa interest to the complainant within the specified time.

“Shri Umesh Kumar Sharma (Complainant) and Shri Arnab Roy (Respondent), Order Date: 15/03/2019 and Complaint No.- COM000016 of 2018.”

Here, the Complainant booked a flat from the Respondent and afterwards the Respondent called the Complainant for lottery and mentioned that the flat will be delivered in the year of 2021 and not in the year of 2020 then the Complainant claimed to refund the amount he has given to the Respondent for flat booking and when he got a negative response from the Respondent, he filed a complaint. The Authority called for hearing but both the parties were absent on that day since the Complainant e-mailed to the Authority that the Respondent had refunded the amount and he wants to withdraw the complaint filed by him then the Authority thought fit to dismiss the complaint.

RERA (Real Estate Regulatory Authority):

There are different provisions given under this Act. According to Section 18 if a promoter does not deliver the possession of the flat within the specified period of time as mentioned in the agreement then the home buyer has 2 options that are he or she can follow the agreement and can claim a refund of the amount or allow the project to continue and claim compensation. It should be kept in mind that different states have a different rate of interest.

Case Analysis:

“Premium Acres Infrastructure Private Limited v. Permanent Lok Adalat (Public Utility Service), Mohali and Ors, CWP 14724 of 2016”

This case says that the allottees booked a flat and made an agreement with the builder but the builder failed to deliver the said flat within the specified time which was mentioned in the agreement. The allottees filed a case in the Lok Adalat and got a fair judgement but the builder was unsatisfied and approached to the Punjab and Haryana High Court. Here the High Court held that the builder should refund the amount along with interest at the rate of 9% and so on.

Consumer Forum:

If there is a deficiency in services or defective in goods then any aggrieved party can claim relief to the Consumer Forum and since there is a deficiency in services in the delivery of possession so these types of cases can be filed in the Consumer forum for claiming relief.

Case Analysis:

“Mr Tapash Roy vs Havelock Properties Ltd. on 11 April 2018 State Consumer Disputes Redressal Commission”

This case provides that the Complainant booked flats along with car parking and other facilities but the builder failed to deliver the possession of the same within the time period as mentioned in the agreement. So, the Complainant filed a complaint in the State Consumer Disputes Redressal Commission and the Commission held that the builder should pay compensation in the form of interest to the Complainant within 30 days otherwise he has to pay interest at 8% p.a and the builder is also directed to pay Rs. 10,000 to the Complainant as cost of litigation and it should be paid within 30 days otherwise 8% interest will be imposed on him.

“Smt. SumitaGanguly&Anr. vs M/S. India Green Reality Ltd. & … on 20 September, 2019 State Consumer Disputes Redressal Commission”

  This case says that the Complainants made an agreement with the builder to construct a bungalow within the specified time but the builder failed to comply with the agreement. The Authority or the Commission said that the builder is liable to pay interest at the rate of 10.3% over the amount of 21,00,000 till the date of delivery of the possession or refund the amount along with interest at the rate of 10.3%.

Somnath Chatterjee vs Bengal Unitech Universal on 27 August, 2019 State Consumer Disputes Redressal Commission

This case explains that the Complainant filed a complaint in the Consumer Forum because the builder did not comply with the agreement made between them. The builder did not hand over the possession within a specified time according to the agreement. Here, the Commission held that the builder should pay compensation in the form of simple interest at the rate of 10.7% p.a and also to pay Rs. 20,000 as costs of litigation to the Complainant.

Conclusion:

Overall, the above discussion focuses on delay in possession of apartments or flats. It also mentions the various remedies that can be taken against any builder or promoter if they fail to deliver the possession of a flat or apartment on time according to the agreement made between them. So, any person can claim relief as per the rules and regulations mentioned above and before they proceed for such disputes they must consult with a lawyer for better suggestions and solutions to tackle the disputes. For more information and advice, you can follow this website, comment below and also contact here. You can also read about the real estate obligations and liabilities of promoters and developers under RERA here.

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