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National commission directed builder to pay heavy damage for duping the consumer

Booking a flat on the 60th floor proved to be a painful deal for a homebuyer couple who was not delivered a flat as promised by Mumbai based builder Lodha Crown Buildmart Private Limited. When the couple homebuyer decided to own a flat in Lodha, little did they know that their wish was going to remain unfulfilled and they will have to file consumer complaint for the same. The flat booked by the buyer was a part of the Lodha Dioro project which is located at New Cuffe Parade in Wadala, Mumbai and is a luxury project. After years of struggle and undue delay, National Commission finally passed an order in favour of the homebuyer couple where it directed the builder to pay Rs. 2.52 crores with interest at the rate of 9%. The National Commission also held its present directors Ramandas Pandey and Pranav Goel jointly and severally liable to pay the amount.

The complaint was filed by Jagannath Hiray and Baby Hiray, wherein they claimed that they had booked a 3 BHK Flat on the 60th floor of the proposed building named LODHA DIORO for a sale consideration of Rs. 4,45,68,432 in 2012. Above that, he also paid Rs 14 lakh as parking charges for two parking spaces. Mumbai Metropolitan Region Development Authority granted commencement certificate to Lodha on February 20, 2013, for only ground-plus-53 floors and not 60 floors. But this didn’t stop them from demanding additional payment from the homebuyer. Surprisingly, even after knowing that they would not get MMRDA’s permission to construct beyond 55 floors, Lodha demanded payments from the buyers.

Much to the agony of the buyers, in 2015, the builder issued a letter cancelling the allotment. Without further delay, Hiray filed a consumer complaint to seek refund of the deposited amount and compensation for the damages that the builders had caused. It was claimed in the complaint that even after receiving the commencement certificate, Lodha neglected to inform the buyer on reduction in number of floors and kept demanding balance amount as per agreement for a flat on the 60th floor. The homebuyer, who contested the matter in person, alleged that that the builder accepted payments for the 60th floor flat despite being fully aware that no permission would be granted by MMRDA for a building having more than 55 floors. Hiray further alleged that that the builder is responsible for misrepresentation and suppressing the true and material facts in the registered agreement.

The builder opposed the complaint stating that the couple homebuyers are flat traders who booked the flat only for reselling. Since they had availed the service for commercial purposes, they cannot be regarded as 'consumer' within the meaning of Consumer Protection Act 1986 however, the National Commission declared its claim invalid.

Builder also offered to refund the deposit amounts or a new flat in the same building (on the 50th floor) with the same carpet area, without any additional charges, however, the buyer did not accept the offer. Later, it was also revealed that the builder did not have sanction to build beyond 45 floors due to height restriction by Airports Authority of India (AAI). Keeping all the points in mind, the National Commission ordered to refund of Rs.2,51,69,578/ along with 9% interest per annum.

By Ankur Saha

Legal Head

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