Builder is liable for carpet area shortfall

The builder had also benefited from the FSI that had become available. The National Commission concluded it would be unfair to burden the Kales with extra premium

Purushottam Gopalrao Kale, a doctor, and his two sons, Vijay and Satishchandra Purushottam Kale, also doctors, had separate flats in Andheri Nav Bahar Society at Vile Parle. The Society’s redevelopment was entrusted to Hetali Enterprises, Builders & Developers. The agreement provided for the allotment of 28 per cent extra carpet area in the redeveloped project. Later, a tripartite agreement was executed which allowed individual flat owners to purchase additional area at specified rates.

When the flats were measured jointly by the Society and the builder’s architects, the area was found to be less than promised. The Kales dem­anded compensation for the shortfall. The builder demanded additional mon­ey as “enhanced premium”. The Kales approached the consumer forum.

When the builder started giving possession, he refused to give the keys to the Kales unless they withdrew their consumer complaints. The Kales complained to the police and the Registrar of Societies also. They pointed out that during the period of redevelopment, they had taken alternative accommodation on rent, whose lease wou­ld expire, and they would be without a roof unless they were given possession. The Society’s managing committee supported the buil­der, and asked the Kales to give a written undertaking that they would withdraw their complaints and also not complain in future. The Kales were compelled to com­ply with the demand to get possession.

The Kales then filed fresh complaints for a refund of the premium and compensation for shortfall in area. These complaints were filed with the National Commission against the builder and the Society. They pointed out that the correspondence made it evident that withdrawal of the earlier complaint happened under duress.

The complaint was contested, stating that the premium was charged because of a change in the Maharashtra government’s policy regarding fungible floor space index (FSI), due to which the Municipal Corporation had demanded Rs 8,99,28,950.

The National Commission observed that the government policy on fungible FSI was changed in January 2012, while the tripartite agreement made in December 2012 remained silent on this issue and did not contain any reference to the increased financial burden. Besides, the builder had also benefitted from the additional 7 per cent FSI that had become available. The Commission concluded it would be unfair to financially burden the Kale family with the demand for extra premium. The Commission said the demand for additional premium was illegal, and ordered the builder to refund it.

Regarding the shortfall in area, the Commission observed that it was not pro­per to measure the flat in the owner’s ab­sence. The Commission directed the builder to give a refund for the shortfall in area at the sa­me rate which he had charged.

The Commission also observed that the interest payable by a flat purchaser for delay in payment was considerably higher than what the builder was liable to pay for delay in possession. The Commission relied on the Supreme Court’s judgement in Wing Commander Arifur Rahman Khan & Aleya Sultana v/s DLF Southern Homes Ltd. [(2020) 16 SCC 512] to hold that the terms of such one-sided agreements were unfair and would not be binding. It directed the builder to pay 9 per cent interest on the amount to be refunded.

By its order of December 8, 2021 delivered by S.M. Kantikar for the bench headed by Justice R.K. Agrawal, the Natio­nal Commission allowed the complaint and awarded Rs 10 lakh as compensation and Rs 2 lakh as costs. It gave six weeks to comply with the order after which the interest rate would be hiked to 12 per cent.

The writer is a consumer activist