Deepak Kumar Singh
Asked June 22, 2016

booked flat but did not get possession

  • 1 Answer

It's been 4.3 yrs since we booked a flat in Bhubaneswar. Still we have not got the possession of our flat. Initial booking amount of Rs 5 lacs and amount of Rs 14,71,000 has been disbursed through bank. So total Rs 19,71,000 out of total property value Rs i.e. 24,51,400 has been given by us .The false commitment about registration is still continuing.Please advice me in this regard. How and how much I can demand from builder for my loss. If possible can I end the agreement and get all my money back with interest?

Answer 1

Answer framed by Sammanika Rawat, Lawfarm Researcher:


We wish to inform you that there has been a deficiency of service on part of the builder and hence you can approach the consumer forum. The forum has recognised 'housing' as a service within the definition of 'consumer' under the Consumer Protection Act.[1] Please note that your claim is for more than 20 lakhs, hence you are eligible for State Consumer Forum.


You are being advised to first send a legal notice to the Builder mentioning his fault (unfair trade practise, deficiency in service) and asking him to provide you with the possession as well as the registration of the flat. Even if the builder does not take the notice seriously, the notice shall be helpful for you to build the case at the consumer forum.


The building contracts are largely unfair to the consumer as there are unequal bargaining powers between the two parties and hence if the builder limits or denies the rights of the consumer, you can approach the consumer forum. In your complaint to the forum, you have to mention that there was a contract FOR service i.e. the manner of construction of flat was totally upto the builder. Please keep in mind that as per Section 24(2) of the Consumer Protection Act, your complaint is time-barred as you have not filed the complaint within the two years. However, your complaint can still be acceptable in the Consumer Forum if you can show that there was 'continuing cause of action' i.e. it was because of the false promises of the builder and the transactions which took place in between, that you had to wait for so long.  The principle for 'continuing cause of action' for housing services has been laid down by the forum[2].


Though in cases of flat allotment contracts, a consumer generally demands Specific Performance of the Contract i.e. the actual possession of the flat, you seem to be interested in ending the contract. In case you want to restore the contract, you can ask the forum for Specific Performance i.e. possession as well as registration. However, if you want to end the contract, you can claim the money. You are eligible to get the monetary value as per the existing market price of the flat and not what you had paid (i.e. you can claim more than what you have spent). The concept of restoration is based on the principle that one cannot gain more than the extent of your loss; however this does not apply for compensation. Hence if you wish to rescind (end) the contract, you can claim the present market value, as well as claim damages for the mental and emotional agony.

It has been held in Lucknow Development Authority v M.K. Gupta, compensation includes both the just equivalent for loss of goods or services and also for sufferance of injustice.


We would also like to inform you that in case the builder has allotted your flat to someone else, you can claim a alternate flat as well. It has been held in 'Haryana urban development authority v R.P.Chawla II (1997) CPJ 517) that if the fault was on part of the builder than an alternate accommodation can be demanded without paying extra money.


Please let us know if you wish to know the procedure for filing to the consumer forum.



[1] Lucknow Development Authority v M.K. Gupta (1994) 1 SCC. 243

[2] Lata Construction and others v Dr. Rameshchandra Rammilal Shah and others (2000) 1 SCC 586

Agree Comment 0 Agrees over 5 years ago

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