Cannot allow builders to fleece the middle-class: SC

NEW DELHI, 24/11/2019: A view of Supreme Court of Inida, in New Delhi on November 25,2019. Photo: Sushil Kumar Verma

NEW DELHI, 24/11/2019: A view of Supreme Court of Inida, in New Delhi on November 25,2019. Photo: Sushil Kumar Verma

The Supreme Court on Monday told the Centre that builders cannot be allowed to fleece middle-class in need of a home.

The court highlighted to the Centre the dire need for “model builder-buyer and agent-buyer” agreements with uniform terms and conditions of sale and purchase of residential flats.

“There is a need for uniform rules or builders can put up whatever they want in their agreements and fleece the buyers. We are concerned about the middle-class home buyers,” Justice D.Y. Chandrachud addressed the Centre, represented by Solicitor General Tushar Mehta.

Mr. Mehta agreed that builder-buyer agreements for homes cannot be “one-sided”.

Essential terms in agreements

“There must be some essential terms in these agreements which are uniform across and cannot be compromised with,” Justice Chandrachud said.

Mr. Mehta said he would consult the government. The case was listed after two weeks.

Advocate Ashwini Upadhyay, the petitioner, said these agreements should be crisp and also be translated in the regional language of the State concerned.

Senior advocate Maneka Guruswamy, for a petitioner, said the Centre, and not the States, has the responsibility to implement the Real Estate Regulatory Authority (RERA) Act of 2016 and formulate rules under the statute.

The apex court has repeatedly termed the issue of “model builder-buyer and agent-buyer” agreements “very important”. It has been highlighting that their absence has been the main cause behind the fraud, lack of transparency, criminal conspiracies and unfair and arbitrary trade practices which plague the real estate sector.

The hard-earned savings of ordinary citizens who aspire to have their own home are invested in the bottomless pit of real estate sector. However, many become penniless waiting for a roof over their heads the builders had promised them.

“Frame a model builder-buyer agreement and model agent-buyer agreement to infuse transparency, ensure fair play, reduce frauds and deliberate delays, restrain builders/promoters/agents from indulging in arbitrary, unfair and restrictive trade practices and to protect the rights and interests of customers in the spirit of the RERA Act of 2016,” the petition said.

Section 41 of RERA has mandated the establishment of a Central Advisory Council, while Section 42 requires it to ensure the implementation of the Act, drive major policy changes, assure that consumer interests are not thwarted by builders/promoters and craft the faster growth of the real estate sector.

Compensation for inordinate delays

The petition said promoters/builders who have caused losses to buyers due to inordinate delays should be asked to pay compensation. Amounts fraudulently misappropriated from buyers under the garb of taxes, interests, penalties and other charges ought to be compensated.

“Builders issue revised delivery schedule again and again, adopt unfair practices... All this amounts to cheating, conspiracy, criminal breach of trust, dishonestly inducing delivery of property, violation of corporate laws,” the petition said.

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Printable version | May 21, 2022 1:38:56 am |