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This is an archive article published on August 21, 2011

Builder told to pay eight times the price of flat for delay in possession

In a landmark judgment,the Maharashtra State Consumer Forum has asked a builder,Vijay Wagh,to pay almost eight times the original price of a flat for causing a delay in possession.

In a landmark judgment,the Maharashtra State Consumer Forum has asked a builder,Vijay Wagh,to pay almost eight times the original price of a flat for causing a delay in possession.

The case was caught in a legal battle for over a decade. The judgment was in favour of one Prashant Kulkarni who had invested Rs 6.5 lakh in a flat in Kothrud in 2001. It ordered Wagh of Mrunmai Society to pay Rs 48 lakh within two months.

The order was passed in tune with the present market rates,which have appreciated at least eight fold in a decade. Kulkarni had invested in a 1050-sq ft flat in one of the upcoming constructions in Kothrud. He had cleared the initial payments,keeping a meagre Rs 70,000 pending to be paid on possession.

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Kulkarni said in his complaint that the builder had promised to hand over the flat well on time. He said Wagh had instead gone ahead to sell the flat to a third party without abiding to an agreement they entered into. Wagh’s sole alibi was that Kulkarn had failed to pay a part of the deal before possession. The fine print of the agreement carried a clause that a person failing to pay the price would be deemed a defaulter,which would allow the promoter to terminate the agreement.

The complaint was first filed before the district consumer forum,which did not buy Wagh’s defence and ordered him to hand over the flat and pay an additional compensation for the mental agony Kulkarni suffered. Wagh later moved the state consumer forum,which upheld the earlier order.

The state forum observed,“With a view to depriving the complainant from possession,the appellant had already created a third party interest. Though the forum below (Pune district consumer forum) had ordered to hand over the possession of flat to the complainant,he will not immediately get the possession as a third party interest has been created.” Therefore,the state forum ordered the buillder to pay Rs 48 lakh,the appreciated amount of the said flat,to Kulkarni towards compensation.


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