Pioneer Urban Land & Infrastructure Ltd. vs Govindan Raghavan - Supreme Court Important Judgment 2019

Pioneer Urban Land & Infrastructure Ltd. vs Govindan Raghavan - Supreme Court Important Judgment 2019 - 


On 2nd April, 2019, in the case of Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan [Civil Appeal No. 12238 of 2018], the judgment of the National Consumer Disputes Redressal Commission allowing the consumer complaint of Respondent-Flat Purchaser against the Appellant-Builder, was affirmed by the Supreme Court, and the statutory appeals filed by the Appellant-Builder under Section 23 of the Consumer Protection Act, 1986 were dismissed. It was held that “a term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder”. The Supreme Court observed that “the contractual terms” of the Apartment Buyer’s Agreement entered into by the Respondent-Flat Purchaser with the Appellant–Builder were “ex-facie one-sided, unfair, and unreasonable” to the Respondent-Flat Purchaser, and “incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.” It was held that the Appellant – Builder “could not seek to bind the Respondent with such one-sided contractual terms.”


The Supreme Court observed that “the Appellant-Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent-Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter” and “the Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired.” It was observed that “during this period, the Respondent-Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank” and “in the meanwhile”, he had “also located an alternate property”, and in these circumstances, “the Respondent-Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest”, as was directed by the National Consumer Disputes Redressal Commission.

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