Lokhandwala Construction company, ordered by the Consumer Disputes Redressal Commission to pay a Sion resident Rs. 25 lakh towards Compensation

In an recent Order passed by the Consumer Disputes Redressal Commission, the forum have held Lokhandwala Constructions liable for “Deficiency in Service” & have ordered them to pay Rs 25 lakh as compensation to the Complainant. An analysis of the said order by Adv. R. P. Rathod.

Adv. R. P. Rathod. says that in this matter the Complainant Mr. Bala. Ayer., had alleged that Lokhandwala Constructions sold-off the Flat to a third party for which he had paid Rs 43.7 lakh.

Adv. R. P. Rathod. further explains that Mr. Bala. Ayer., had three years ago, finalized a deal for a 3BHK Flat in the proposed Fountain Heights Building, at Lokhandwala Township, Kandivali East directly with the developers M/s Lokhandwala Constructions.

Mr. Ayer had then finalized the deal at Rs. 74 lakh, out of which he paid Rs 43.7 lakh in installments as advance money. But inspite of this the developer didn't give him the Agreement copy & other documents, which he required for availing the Home Loan, this stalled his bank loan Application.

Despite of all this, he was able to arrange the money. But when he went to builders to make the payment, he was told that he is late in paying the said installments, hence, he was no longer eligible to own the flat. Further they offered him to settle the matter & allot him the said flat, if he paid an additional amount of Rs 10 lakh towards penalty, this was turned down by Mr. Ayer.

Subsequently in 2010, Ayer got a cancellation letter from the developers, and the money he had paid was refunded after a deduction of around Rs 2.2 lakh citing Caption (registration fees, document charges, etc). Further the developers eventually sold-off the said flat to a third party. Immediately in April 2010 Mr. Ayer filed a complaint before the Consumer Disputes Redressal Commission.

After hearing the matter, recently the Commission has ruled in Ayer's favour, asking Lokhandwala Constructions to pay the compensation within a period of 45 days from January 27, failing which they will have to pay an 18 per cent interest on the amount. The Commission further asked the developer to refund the amount deducted for caption, again with an interest of 18 per cent, from the date the complaint was filed i.e. April 5, 2010, and the Legal costs of Rs 10,000.

Lokhandwala Construction’s Advocate had contended before the commission that, “The petitioner didn't pay in time, which amounts to violation of the terms; hence, the agreement was terminated.” He said that how the buyers arrange the money to purchase apartments was not the builders' concern. “The allegations that the agreement was not provided to him, due to which he did not get a bank loan, can't be used as an argument.

Adv. R. P. Rathod. points out that Lokhandwala Constructions, are one of the Mumbai's biggest realtors & this order is a classic judicial precedent. Many such flat purchasers across the city are being duped & cheated by several small & big builders. When these Flat buyers approach me, I find that they are quiet afraid of filing any case against the builders, fearing that the builder might harass them further & they would loose their hard earned money. But what people forget is that “No one is above the Law”. In this matter justice came to the person who saved and paid money to fulfill his dream of buying a decent flat in this expensive City.

Adv. R. P. Rathod. further illustrates that whenever you make a purchase be it a grocery item, clothes or any appliances for your house you examine all the different products existing in the market carefully before making your purchase. Even if the salesman recommends some particular product you overlook his suggestions because Consumer is the King. When you take into account all these intricate details while making a small purchase why do you quietly accept & pay all the claims made by the builders? Buying a house is not a daunting task and involves much of your life’s saving. Even a single negligence from the buyers end can cost a lot. The Buyers shouldn’t blindfold themselves & fall in prey to these builders and he has to be vigilant about his rights. Similarly the Builders should also understand that they are losing their goodwill in the market once they cheat even a single buyer. The buyers when once gets cheated they lose their faith and trust in these so called reputed builders.

        “A Buyer should never be made to pay just because he can afford or he does not complain” concludes Adv. R. P. Rathod.