Representative Complaint on behalf of a large number of Consumers

 

In their order dt. 7 October 2016, The NCDRC has passed a detailed order  interpreting Section 12(1)(C) of the Consumer Protection Act, allowing home buyers who have invested in a project to be automatically made party to any case filed against a builder.

Referred to as a representative lawsuit, this can only be done if their interest, complaint or grievance is common to that of the person who has filed the complaint. The order applies to all new cases as well as old ones.

 

                    NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
                                                                     NEW DELHI
 

 

 
                                             FIRST APPEAL NO. 166 OF 2016
           
(Against the Order dated 27/01/2016 in Complaint No. 586/2015 of the State Commission Maharastra)          

 

BEFORE:  
  HON’BLE MR. JUSTICE D.K. JAIN,PRESIDENT
  HON’BLE MR. JUSTICE V.K. JAIN,MEMBER
  HON’BLE DR. B.C. GUPTA,MEMBER

 

For the Appellant :  
Mr. S.K. Sharma, Advocate
Dr. Abhishek Atrey, Advocate

 

For the Respondent :
Mr. Nikhil Jain, Advocate Mr. Anshuman Nandi, Advocate


Dated : 07 Oct 2016

 ORDER
JUSTICE V.K. JAIN, MEMBER
         

 

 Link to the full order:

 http://cms.nic.in/ncdrcusersWeb/GetJudgement.do?method=GetJudgement&caseidin=0%2F0%2FFA%2F504%2F2016&dtofhearing=2016-10-07

Builder constructs illegal flat on car parking area and sells it


Builder constructs illegal flat on car parking area and sells it

 

The Maharashtra State Consumer Commission has ordered Shreekrishna Developers – a builder to pay to a buyer –  the complainant Rs 26 lakh, the 2012 (year of filing the complaint) value of a 525 sq feet flat in the vicinity. The buyer who had taken possession of the flat in 2005 after buying it for Rs 4.95 lakh, realized that anomaly after the society refused to induct him as a member.

“From perusal of the occupancy certificate, it is seen that after getting the occupancy certificate from the corporation, the opponent (Shreekrishna Developers) has constructed the flat without the sanction of the municipal corporation. Thus, there is a clear-cut deficiency in service on the part of the opponent who also adopted unfair trade practice by carrying out the unauthorized construction and allotting the same to the complainant,“ the Maharashtra State Consumer Disputes Redressal Commission said.

The spot where the flat was constructed was to be used for parking. The space will now be handed back to the society .

The complaint was filed by flat purchaser Sunil Gade in 2012. Gade told the commission that after receiving a negative response from the society about his membership, he approached the builder. When he got no response from the builder, he issued a notice through an advocate in November 2011and requested the builder to regularise the flat from the Navi Mumbai Municipal Corporation (NMMC) at its costs. Gade however, received a reply with the remark “not claimed“. In the commission, the builder submitted that Gade himself had chosen to stay on the ground floor. It contended that as the flat was constructed on Gade’s request and the possession had already been handed over, there was no deficiency in service.

The builder further stated that if Gade did not want to continue living in the flat, he could take back his entire payment along with interest and surrender the flat.

The full decision dt. 4 October 2016 is available at the following link:

file:///C:/Users/Eleena/Downloads/judgement2016-10-04.pdf

Order of Consumer Forums – What happens if not complied with

 

A large number of cases are coming up in various Consumer Fora against the builders. They tend to take matters very lightly and tend to disobey them…..
I am reproducing an order of the State Commission, Maharashtra. The concerned builder was sent to jail for three years, unless he complies with the order before that……..

 

BEFORE THE HON’BLE STATE CONSUMER DISPUTES REDRESSAL COMMISSION,              MAHARASHTRA, MUMBAI

Execution Application No. EA/13/10 (Arisen out of order dated 3rd February, 2012 in CC/05/20)

  1. Manherlal C. Shah 47, Carnac Siding Road, Iron Market, Masjid Bunder (East), Mumbai 400 009. New Add:- 101A, Walkeshwar Road, 11, New Indrabhuwan, Near White House, Mumbai – 400006 …..                                                           Executant(s)

                                                                        Versus

1.     M/s. Siddhivinayak Builders (Proprietorship) Tulsi Tower, Second Floor, 51st Road, T.P.S. III, Borivali (West), Mumbai – 400 092. New Add – Benzer Tower, 2nd Floor, Near Sanskruti Enclave, 90ft Road, Next To IBPS, Borivali East, Mumbai 400101

2.      Mr Nitin N. Mehta (Partner of M/s Siddhivinayak Builders ) 1, Homestead, 16, Dattatryaya Road, Santacruz (W), Mumbai 54 New Add Benzer Tower, 2nd floor, Near Sanskruthi Enclave, 90ft Road, Next To IBPS Borivali E Mumbai ……………………………………………………………………………………….Opponent/Accused(s)

 

Mr. Justice A.P. Bhangale, President ….Heard Submission of both the sides on execution application u/sec 27 of Consumer Protection Act, 1986.

 

1. By final order complaint no. CC/05/20 was allowed and opponents were directed to deliver possession of Flat No.702, C- Wing, situate on 7th Floor, having carpet area of 732 sq.ft. in the building known as “Emerald Court to the complainant. While giving possession, occupation certificate was also to be ensured by the Opponents with supply of water and electricity and complainant was required to pay an amount of Rs.17,000/- in view of Clause 45 of the agreement dated 18/08/1997 as stated in Clause 4 of the judgment and award in the Complaint No.CC/05/20. At the time of receiving possession, the executant was and is ready and willing to pay the sum of Rs.17,000/- payable according to Clause 4 of the operative order. Compensation in the sum of Rs.1,00,000/- is payable by the opponent as per Clause 5 of operative part of the final order and litigation costs in the sum of Rs.10,000/- as per Clause 6. of the operative part of the final order.

 

2. In execution application in defence the opponents have stated that they (the opponent) cannot give possession of the flat (aforesaid flat) because the opponent sold the flat to third party. This cannot be valid excuse for non-compliance of the final order passed by this Commission. Ld.Advocate for the Opponents has sought to adduce some copies of documents to pray for time for compliance of final order, tried to show deed of rectification (phtostate copy), we are not impressed by such evasive submissions in respect of final order passed by us. Once order is made final, passed by the State Commission, it is duty of the 3/4 opponent to obey it and no such excuse can be pleaded which cannot be acceptable by any reasonable prudent person; the accused has to undergo jail custody. There is long standing tendency on the part of the builders/developers in city of Mumbai and Suburban areas to enter into agreement in respect of innocent flat purchaser and then to create interest in third parties, inter alia, with a view to avoid statutory obligations under Maharashtra Ownership of Flats Act, 1963 (‘MOFA’ in short). According to law we cannot accept any such excuse for non- obedience of the final order which was passed by us long back on 3rd February, 2012. When final order despite challenged in superior Forum or Court remains final there can be no excuse for non-compliance thereof by the opponents. Hence, once it is brought to our notice that final order is not yet obeyed deliberately though understood by the opponent. Possession of the flat is not given as directed, we have no other option to remand opponent/accused Mr. Nithin Mehta to imprisonment with a direction that until and unless final order is complied with the opponent/accused shall remain remanded to the jail custody and shall be sent to undergo imprisonment alike civil detenue in the jail.

 

  1. We make it clear that in the event opponent want to comply with the final order, reference be made to us through the Superintendent of Jail concerned and Complainant, if reports compliance of final order, we can immediately consider releasing the opponent/accused from detention. The jail custody shall continue for a period of three years maximum period unless and until final order is complied with by the opponents in view of Section 27 of the Consumer Protection Act, 1986. 4/4 4. At this stage, the Ld.Advocate for the opponent/accused has filed an application for bail u/sec 389 of Cr.P.C. on the ground that Commission had taken up the matter for final hearing in the execution proceedings and directed detention of the opponent/accused to the jail custody until the compliance of the final order. Since, our order is self explanatory and since the opponent/accused disobeyed the final order despite the fact that the final order is not complied since long despite evidence recorded in execution proceedings as to whey final order remained disobeyed, no justification was found for deliberate disobedience of final order. Hence, we are not inclined to grant bail as prayed for because we will not suspend our aforesaid order as it would be sending wrong signal to opponent to continue to disobey the order and deprive of the consumers of their legal right. Hence, application is rejected. Certified Copy of the order be expedited. Order accordingly.

                                            [HON’BLE Mr.Justice A.P. Bhangale]                              PRESIDENT
[HON’BLE MR. Narendra Kawde]  MEMBER

   Pronounced Dated 13th June, 2016.

25 flat buyers kept hanging by builder for 22 yrs – get justice in two years

 

The Consumer Forums are taking a much needed tough stand against erring builders who think they are above the law and are resorting to all kinds of unfair and illegal practices…

 

Swati Deshpande| TNN | Updated: Sep 23, 2016, 08.08 AM IST

 

 

MUMBAI: The Maharashtra  State Consumer Commission has come to the rescue of 25 flat buyers who put their service class life savings in booking small homes 22 years ago, only to be asked to cough up Rs 41.5 lakhs each, almost ten times the original price, to get possession. The commission said the escalated demand was nothing but “pressure tactics” and “unfair trade practice” by the builder to get the buyers to accept his offer of Rs 14 lakh and cancel the bookings in “Rajendra Kunj’ a project in Borivli (east).

The commission directed the builder, Truly Creative Developer Pvt Ltd, to hand over possession of flats in two months at the original price and with all agreed amenities. The order is to also pay damages of Rs 50,000 each to 25 buyers for the mental agony that the unprecedented delay has caused them.

The flats were booked between 1994 and 1998 by 112 persons, mostly employees of Excel Industries, at prices that ranged between Rs 4 lakh and Rs 6 lakh. Most had paid over 50% of the flat’s cost. In 2011, the developer demanded Rs 41 lakh more from each buyer and said the market rate in the vicinity was around Rs 80 lakh for similar-sized flats. The developers, Rajendra Barde and Dattatray Barde, directors of the firm, also initially offered them an 8% return on the money they had already paid. The lawyer for the buyers, Dilip Kulkarni, argued that it was not money, but flats they wanted, as entitled in law. The builder wants the buyers out so that he can sell the flats at the current market rate which would attract a price of around Rs 1 crore, they argued.

The commission panel presided over by judicial member Usha Thakare and Dhanraj Khamatkar observed that in some cases, “flats were booked in 1994, agreements executed in 2005. And no possession handed over till date”. The buyers had approached the commission in 2013. The work was stopped for a year in 1998 and three years since 2005 after disputes landed in the city civil court. But there was no stay on construction between 1999 and 2005 and since 2008. Yet the building is far from complete.

The builder’s lawyer, Ajay Karwath, resorted to every legal arsenal to have the buyers’ complaint dismissed. He questioned their status as consumers, calling them investors, and even challenged the jurisdiction of the commission which can hear claims above Rs 20 lakh. The commission said the buyers had claimed damages of Rs 60 lakh with interest. Hence, the jurisdiction was not flawed, and they were all employees who purchased small flats for their residence with a valid agreement and continued to pay amounts which the builder demanded over the years, hoping for completion and possession, hence they were consumers. “They would not have waited for 16 years to get possession if they were investors.”

 

Link to the full news:

http://timesofindia.indiatimes.com/city/mumbai/25-flat-buyers-kept-hanging-by-builder-for-22-yrs-get-justice/articleshow/54471423.cms

One Avigna Park, the first cluster development project in Mumbai……….in serious trouble……………..


One Avigna Park, the first cluster development project in Mumbai……….in serious trouble…………….
.

Mumbai: FIR against builder for FSI fraud that cost govt Rs 2,000 cr

Cops registered FIR against directors of the firm that constructed the 61-storey super luxury project — One Avighna Park at Currey Road — for allegedly forging…
MID-DAY.COM
Read the entire story at the following link: 

http://www.mid-day.com/articles/mumbai-fir-against-builder-for-fsi-fraud-that-cost-govt-rs-2000-cr/17592153

MOFA Act 1963 – FIR

 

 

MOFA Act, 1963 is a powerful Act with stringent provisions against erring builders.
The various provisions contain imprisonment of 3 years, and fine, etc.
In certain circumstances involving breach of trust, the sentence of imprisonment can go upto five years..

The offences are both cognizable as well as non bailable.
For the first time, the Maharashtra Police has issued Circular on 1 July 2016 directing its police to file FIRs under the provisions of MOFA.

The victim Flat Purchasers can take advantage of these new provisions.

There is a Supreme Court Judgement Re: Lalita Devi that all FIRs must be registered within 7 days of receiving the Complaint (later increased to 15 days). Otherwise, the Police have to intimate to the Complainant in writing giving reasons for not registering the FIR.

 

 

 

 

 

Attack By Builder

Hindustan Times – Four held for attacking doctor with swords

HT Correspondent | Updated: Jun 28, 2016 12:07 IST

MUMBAI: Officials of the crime branch unit 4 have arrested four people on Monday for assaulting a Parel-based 43-year-old doctor at the behest of a local builder.

According to police officials, six people assaulted Dr Naveen Gupta while he was on his way home from his dispensary.
The four accused have been identified as Raja Devendra, 47, Deepak Chourasia, 23, Sandeep Pillai, 27, and Rupesh Dolkar, 26.
Gupta sustained 24 stitches and was discharged on Monday.

An officer from the crime branch said, “Last week, six people accosted the doctor’s car near Parel and assaulted him with sickles and swords. He was injured and admitted to the hospital.”
“The four accused said a builder paid them to attack the doctor. Both were living in the same society and had fought due to parking, and other society issues. Recently, the builder met Devendra, said he was tired of fighting with the doctor daily, and asked him to do something about it.”
Devendra hatched the plan to attack Gupta.

“The group had been trying to attack Gupta for the past two months but were unsuccessful,” added an officer.
The accused have been booked under relevant sections of Indian Penal Code, Arms Act and the Bombay police Act.
They were handed over to the Kalachowkie police for further probes.

Sanjay Veera, the main culprit, was arrested by the Crime Branch from his residence on 26 June and let off…
No one knows how, why and for what consideration.

Criminal Action under MOFA

 

Criminal Cases under MOFA

Very few criminal cases are filed against builders and land owners under the Provisions of MOFA (Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963) and other sections of the IPC.

I do not know the exact reasons.  Most flat owners, and even lawyers, are not aware that violation of the provisions of MOFA is a criminal offence. Other flat owners are too scared of the builders and are often threatened by them.

In one of the rare cases, in August 2015, Sree Jugal Sreegopal Saraf, a resident of Pedder Road, Mumbai registered a cheating case against Praful Satra, Chairman and Managing Director of Satra Group of Companies and his colleagues.

According to the Complainant  Sree Jugal Sreegopal Saraf,  Praful Satra and his company, had approached him for an upcoming commercial project in Borivli called the Dream Mall.
Sree Jugal Sreegopal Saraf and his six friends booked six shops for a total amount of Rs. 6,91,79,500. Only after making the payments,  Sree Jugal Sreegopal Saraf and his six friends realized that the builder had cheated them by showing them forged documents because the project was under the Slum Rehabilitation Authority (SRA) Scheme.


The Economic Offences Wing of the Mumbai Police made investigations and arrested Praful Satra on 5 January 2016  for cheating 7 persons to the tune of Rs. 6.92 crores by selling an SRA Scheme as Commercial plot on the basis of forged documents.


Praful Satra’s Juhu JVPD Project

In 2011, Praful Satra, who developed a Juhu residential tower, was dragged to the Bombay high court for large-scale violations, including having car parking decks outside flats that allegedly could be later amalgamated into the flats’ carpet areas. The matter is now pending in the Supreme Court. Before the Supreme Court, Praful Satra has cited instances of 18 similar projects in Mumbai’s western suburbs to justify his case.


Of the 196 parking slots in this building, 99 are on habitable floors (stilt and podium), with nine on each floor. The average size of a flat in the tower was shown as around 2,000 sq ft. However, the builder provided an equivalent space outside each flat for car decks.

The BMC said the total car deck area in the building was around 75,000 sq ft, which fetched the builder an additional Rs 150 crore (sold at the prevailing rate of about Rs 20,000 per sq ft in Juhu). Besides basement and podium parking, the builder was allowed to construct nine car park decks on each floor of the building, which has three wings of 11 floors each and 33 flats. The project was approved when Jairaj Phatak was BMC chief.

Satra’s JVPD Scheme project has become a test case for builders who build car parking slots adjoining apartments on higher floors. Civic activists allege that these slots are not really for parking, but are sold illegally at market rates and later surreptitiously amalgamated into the flat by the owner in connivance with the developer.

 The entire news article about Satra’s arrest  is available at the following link:

http://www.mid-day.com/articles/mumbai-builder-held-for-duping-buyers-of-rs-7-crore/16835156

 

Gundecha Builders fined Rs. 1 crore by Bombay High Court

Christmas eve has brought bad news for Gundecha Builders….one of the top builders of Mumbai.

On 23rd December 2015, Justice Mridula Bhatkar of the Bombay High Court settled a 36-year-old litigation initiated by one Shivram Shinde (since deceases) who claimed he was in “adverse possession” of the land since 1944. Gundecha Builders joined the litigation later, saying it had bought the land in 1979 from one Shivram Shinde and sought the ouster from the property of MHADA, which is proposing an affordable housing project on it.

In her order Justice Mridula Bhatkar has observed:

“It is to be noted that this is a huge government land which the government has handed over to MHADA for construction of houses for lower and middle-income groups. A judicial note is taken that in case of government land for which some scheme is launched for a public cause, it is stalled immediately either by slumlords or by encroachers by approaching the court and manipulating the facts and documents,”  adding, “These attempts are required to be defeated, otherwise public cause gets frustrated and the land is grabbed by encroachers illegally only on the basis of muscle power.”

Justice Mridula Bhatkar said it was the duty of the court to uphold the rule of law to ensure that government land is preserved especially when it is reserved for a public cause.  Justice Mridula Bhatkar has observed: “I am of the view that the suit filed by (Shinde and the builders) is entirely bogus, malafide and false with the intention to grab the land with the help of some government employees, which ought not to be allowed. It is only possible by imposing exemplary costs on the builder, considering the damage to the public cause and state wealth.”

The court directed the developer to pay Rs 1 crore as costs to MHADA within four weeks and allowed the agency to initiate action against the slum dwellers who have encroached on the property. The court extended an earlier stay on the agency till January 29, 2016, to allow time for the developer to file an appeal.

History of the Litigation

 

The sprawling piece of land is located in Goregaon West. The  case goes back to 1979, when Shivram Shinde laid claim on the land on the principle of “adverse possession” since 1944 – which means he had right over the government property as he had uninterruptedly occupied it for over 30 years. He claimed to have sold a part of it to Gundecha Builders, the builder in 1950 and the remaining portion in 1978.

The builder joined the litigation in 1998. They relied on notices issued by local authorities to claim possession of the land. This was opposed by MHADA, which pointed out that the land was part of the larger parcel of land of 241 acres which was given to it by the government in the 1960s. The state had acquired the land from the original owners between 1948 and 1950 and had paid Rs 14 lakh as compensation to the various owners. Shinde had not lodged any proceedings for the land during this time. Senior advocate P D Anklesaria, counsel for MHADA, told the HC, “It was a case of land grabbing by the builder, and he was claiming the land illegally in the name of Shivram Shinde, who was illiterate, poor and was never in possession of a single guntha of the property.”

Justice Mridula Bhatkar held that Shivram Shinde (who died during the pendency of the litigation) and the builder “have miserably failed for want of cogent, credible evidence to establish 12 or 30 years continuous, peaceful open possession of the land”. The judge said except for sale agreements between private parties, no document prior to 1970 of possession of the land was submitted before the court. “In the present case, the government was throughout in the possession. (Shinde and the builders) of and on might have been in possession of some portion of land by way of encroachment, but the Government did not lose its possession of the land,” the court said.

Mobile Towers – Are they Health Hazards ?

Kiran Shantaram and others have recently filed a writ in the Bombay High Court against the installation of Mobile towers in a Municipal Garden adjoining the Raj Kamal Studio compound in Parel, Mumbai. 
The Bombay High Court has not granted any interim order so far.

The fact remains that it is not clear whether the radiation are health hazards.
Environment activists feel that they are health hazards. 

Experts are divided. And there is no conclusive evidence or study to indicate that the radiation is a health hazard.

The issue has been decided by at at least three High Courts. The High Courts  have held that the radiation is not a health hazard.
The Govt. of India should come out with clear expert opinion.

Meanwhile, the Central Pollution Control Board (CPCB) and National Green Tribunal (NGT) have said that cell-tower radiations are not a “pollutant” or a health hazard if the cell towers strictly adhere to the norms that have been laid down by World Health Organization (WHO) and the department of telecommunication (DoT).

This obviously means that the radiation from the cell towers should not only be routinely checked by the concerned agencies, but the reports should be made available online.