Kerala - Thiruvananthapuram   

Builder directed to pay interest for delayed delivery of apartment

Staff Reporter

Thiruvananthapuram: The State Consumer Disputes Redressal Commission has ordered a builder to pay interest on the amount paid by a consumer for booking an apartment, at the rate of 15 per cent, as compensation for failing to deliver the apartment on time.

The compensation that the builder, M/s Southern Investments, will have to pay the consumer amounts to Rs.27 lakh. The consumer had paid over Rs.20 lakh in 1997 to the said builder for an apartment in one of their projects, which is yet to be delivered. The commission has also ordered the builder to deliver the completed apartment within three months from the pronouncement of the order.

Though consumers have, in the past, secured compensation from consumer court for delayed delivery of apartment projects, this is the first time that the court has decided to award interest on the money paid by the consumer to the builder. The case against the builder was filed by E.M. Najeeb, Managing Director, Air Travel Enterprises (India) Ltd. His case was that he had paid Rs.20, 07,400 in instalments to the builder and booked apartment no. C5 in the project, Windbrook Place at Vellayambalam.

The total value of the apartment as per the contract was Rs.22, 57,000. As per the contract, the apartment was to have been delivered by the end of 1997.

The builder, in the allotment letter to the consumer in July 1995, said that they had received permission from civic authorities for construction of ground plus seven floors of the building. However, in October 1997, the builders informed him that the Government had revoked the sanction given for constructing 16 floors and fixed it at 15 floors and hence there would be a delay in the project.

Delay

The complainant was then informed that the project would be completed by the end of 1998, instead of 1997. The apartment has not been handed over to the complainant till date.

The complainant's case was that he had taken a bank loan at 18 per cent interest for paying the builders. Hence he wanted interest on the Rs.20 lakh he had paid to the builder. The builders claimed that the delay had occurred due to circumstances beyond their control. The commission said that the builders already received sanction for constructing seven floors.

By December 1997, as per their own admission, the builders had completed brick masonry work up to eight floors.

Hence it could not be accepted that delay in the completion of the apartment on fifth floor was due to unforeseen circumstances.

The builders has been asked to pay interest to the consumer at the rate of 15 per cent per annum on Rs.20,07,400 from January 1, 1998, till the handing over of the apartment, constructed as per the original agreement. The complainant will pay the remaining instalment money on handing over of C5 apartment.

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