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

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. K.L. Suneja, (2015) Comp AT 3, decided on 03.08.2015

Join the discussion

Your email address will not be published. Required fields are marked *

sixteen − three =