Demand notice must be served properly to buyer | Business Standard Column

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The purchaser couldn’t be termed a defaulter since the demand letter had not been served properly, and especially when he paid the amount on receiving a reminder

Jehangir B Gai

Utpal Trehan booked a 3-BHK flat in Gurgaon costing Rs 45,12,000 in New Heights, a project by DLF Home Developers. The agreement executed on December 3, 2008, stipulated that possession would be given within 36 months. If there was a delay, a monthly compensation of Rs 5 per square feet (sq. ft.) would be paid.

On March 26, 2009, the builder informed that project commencement had got delayed as final environment clearance had not been received. The payment schedule was converted to construction-linked plan. The amount paid till then would be treated as advance payment carrying interest at 13 per cent per annum, and would be adjusted against the subsequent instalment. Compensation for delayed possession was increased to Rs 10 per sq. ft. per month.

Trehan paid the instalments on time. However, he did not pay the demand of Rs 1,66,050 towards External Development and Infrastructure Development Charges, disputing it as being illegal and unjustified. He did not pay the subsequent instalment demanded on December 29, 2011, on time as he did not receive the demand letter. However, he paid it on receiving a reminder.

While offering possession, the builder sent a statement of account showing an outstanding balance of Rs 9,00,382, which included Rs 1,226 towards interest for delayed payment, and Rs 1,53,900 for increase in area. Rebate for timely payments and compensation for delayed possession were not given. The builder also started demanding maintenance charges.

Trehan filed a complaint before the Delhi State Commission. The builder contested, pointing out that the instalment demanded on December 29, 2011, was sent by courier and someone named Gita had received it, so the demand for delayed payment was justified.

While the complaint was pending, the builder resolved some of the billing issues. The remaining disputes were adjudicated by the State Commission. Its order was challenged by both the parties.

The National Commission observed that the dispute was now limited to rebate for timely payment and compensation for delayed possession. It noted that it was the builder’s duty to ensure that the demand notice was served to Trehan or an adult family member. There was nothing on record to show that Gita, who had purportedly accepted the notice, was a family member or was authorised to accept it. So, the purchaser could not be termed a defaulter on the basis of a demand letter that had not been properly served, especially when the amount was promptly paid on receipt of the reminder. The National Commission confirmed that Trehan would be entitled to rebate for timely payment.

Regarding compensation for delayed possession, the Commission observed that the builder had already given certain benefits and paid compensation, and Trehan had accepted them. So, it held that no further compensation could be claimed.

Since the agreement provided that maintenance charges would be payable from the date of receipt of the Occupation Certificate, the Commission held the builder’s demand to be valid and justified.

Accordingly, by its order of July 23, 2021, delivered by the Bench of C. Viswanath and Ram Surat Ram Maurya, the National Commission modified the order and awarded costs of Rs 50,000 to Trehan.

The writer is a consumer activist

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