Builder can't impose one-sided terms: SC

SC upholds consumer panel order for refund

The Supreme Court on Tuesday held that a term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on conditions put by the builder.

A bench of Justices U U Lalit and Indu Malhotra found as "one-sided and wholly unfair" the apartment buyers agreement made between 'Pioneer Urban Land & Infrastructure Ltd' and Govindam Raghvan and others on May 8, 2012, for a flat worth Rs 4.83 Cr in Gurugram.

As the builder failed to apply for occupancy certificate within a period of three years, and a further grace period of six months, the consumers approached the National Consumer Disputes Redressal Commission, which on October 23, 2018, which ordered for a refund of money along with the interest.

The builder challenged the consumer panel's order saying that the buyers had not terminated the agreement by giving a prior 90 days notice as stipulated.

The buyers, on their part, contended filing of a complaint before the panel should be treated as a termination of the agreement, as the builder failed to obtain occupancy certificate within the time.

The top court said the purchaser was justified in terminating the agreement and they cannot be compelled to take the flat. It also noted several "incongruities" in the agreement.

"We have no hesitation in holding that the terms of the apartment buyer’s agreement dated 08.05.2012 were wholly one-sided and unfair to the flat Purchaser. The appellant – builder could not seek to bind the respondent with such one-sided contractual terms," the bench said.

The top upheld the orders and judgement passed by the National
Consumer Disputes Redressal Commission for refund of money, along with the interest as compensation.