The Supreme Court concluded that the unilateral inappropriate terms of the apartment purchase agreement constitute an unfair business practice under the Consumer Protection Act and stated that the builder cannot force buyers to comply with such terms of an agreement. ♦ Are the terms of the agreement to purchase the apartment unilateral? “The terms of the home buyer agreement are oppressive and completely biased and would constitute an unfair trade practice under the Consumer Protection Act 1986,” the Supreme Court said, adding, “In light of the above, we believe that the developer cannot force home buyers to be bound by the unilateral contractual terms contained in the apartment buyer`s contract.” With regard to this issue, the court held that the terms of the apartment purchase contract are oppressive and completely biased and would constitute an unfair commercial practice under the Consumer Protection Act 1986. Second, if the terms of the apartment purchase agreement were unilateral and the apartment buyers would not be bound by them. The court, in examining the clauses mentioned in the agreement, concluded that those clauses were completely unilateral terms of the buyer`s agreement, which were fully charged at each stage in favour of the developer and against the successful tenderer. “In this decision, the Supreme Court rightly rejected the automaker`s assertion that a buyer cannot turn to the Consumer Forum to resolve their complaint following the issuance of RERA. The Supreme Court clarified that aggrieved buyers have the right to choose one of the remedies available to them – the Consumer Court or RERA. While they may have to choose a remedy, the fact remains that they have the opportunity to go with it,” says lawyer Aditya Parolia of PSP Legal, who represented home buyers in the case. The Supreme Court ruled in a consumer-enabling decision (Pioneer Urban Land & Infrastructure Ltd v. Govindan Raghavan) that the inclusion of unilateral clauses in an agreement between builders and home buyers constitutes an unfair commercial practice under section 2(r) of the Consumer Protection Act 1986. 2018, until the date of payment of the full amount. Reimbursement shall be made within three months of the date of the present judgment. If there is a further delay, the promoter is required to pay default interest in the amount of 12% simple interest per year.
In addition, the reasons given by the customer for the delay were not justified and the terms of the contract were considered to be completely unilateral, unfair and non-binding on the buyer. The following issues were raised on appeal to the Supreme Court: (i) determination of the date from which the 42-month period for the transfer of ownership is to be calculated in accordance with section 13.3, whether it would be from the date of issuance of the NOC on fires, as requested by the proponent; or from the date of approval of the construction plans, as requested by the apartment buyers; (ii) whether the terms of the home buyer agreement were unilateral and the home buyers would not be bound by them; (iii) whether the provisions of the Real Estate (Regulation and Development) Act, 2016 are to prevail over the Consumer Protection Act, 1986; (iv) Whether the buyers had the right to withdraw from the contract and demand reimbursement of the sums paid with interest due to the undue delay in the delivery of the goods. With respect to Phase 2, during which the crew certificate was expected, the Supreme Court ruled that the buyers were entitled to a refund of the full amount they had deposited, as well as compensation and interest. She asked the manufacturer to repay the money in four weeks. “In these circumstances, it is necessary to balance the competing interests of both parties,” the court said. The court said the analysis of the agreement showed that clause 6 of the construction-related plan provided that home buyers would have to deposit 20% of the consideration for the sale within 45 days of booking the apartment. Clause 7.4 of the agreement states that in the event of late payment of a deposit, the buyer of the house must pay interest on any late payment of such a payment at the rate of 20% simple interest per year. `We consider that the inclusion of such unilateral and inappropriate clauses in the contract for the purchase of a house constitutes an unfair commercial practice within the meaning of Article 2(1)(r) of the Law on consumer protection. We believe the developer cannot force home buyers to be bound by the unilateral terms of the contract,” said a three-member bench consisting of Judge DY Chandrachud, Judge Indu Malhotra and Judge Indira Banerjee. The Supreme Court ruled on January 12 that a real estate developer cannot force home buyers to be bound by unilateral contractual terms contained in the apartment purchase agreement. The Supreme Court ruled that the inclusion of such inappropriate terms in the agreement constitutes an unfair commercial practice within the meaning of the Consumer Protection Act. Affirming that the developer cannot force home buyers to be bound by the unilateral terms of the contract, the court concluded that the 42-month period provided for in clause 13.3 of the agreement for the surrender of ownership of the apartments should be calculated from the date fire NOC was issued, and not from the date the construction plans were approved.
In this particular case, there was a delay of approximately seven months in the proponent`s obtaining of the Fire NPC. The Consumer Protection Act of 1986 was enacted to protect the interests of consumers and provide a remedy to better protect the interests of consumers, including the right to seek redress against unfair commercial practices or unscrupulous exploitation, the court said. Although the buyer was roughly divided into two categories, the court stated that in Phase 1, the buyers who were awarded (with the exception of a few) were required to take possession of the apartments because construction was completed and the property was offered on June 28, 2019, after the issuance of the certificate of occupancy on May 31 of the same year. A recent decision of this court in Imperia Structures Ltd.c. Anil Patni, (2020) 10 SCC 783, concluded that remedies under the Consumer Protection Act apply in addition to those under special legislation. The absence of a prohibition under section 79 of the RERA Act from initiating proceedings before a forum that is not a civil court, in conjunction with section 88 of the ReRA Act, clearly shows the position […].
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