Sumit K Batra
Delay in the completion of residential projects is one of the major concerns for buyers. The delay acts as a double-edged sword for the buyer as he has to bear the double load of paying EMI for home loan and rent for the accommodation he inhabits while waiting for his own house to be completed. Under law, till a few years ago, the choice of taming an errant builder was restricted to dragging the builder to the consumer court or to exercise the standard remedy under Civil Laws. However, with the enactment of the Real Estate (Regulation & Development) Act, 2016 and inclusion of home buyers within the class of ‘Financial Creditors’ under the Bankruptcy Code, 2016, new weapons have been handed over to the home buyers to fight the errant developers. Here are some of the options besides RERA that are avilable to you if you are a home buyer caught in the mess of a delayed project:
Consumer Protection Act, 1986
Consumer Protection Act, 1986, provides institution of consumer disputes redressal forums at different levels, viz. district forum, state commissions and also the National Consumer Dispute Redressal Commission. The jurisdiction of every forum is outlined in terms of territory and also the worth of goods and services, as well as the compensation claimed.
A homebuyer could approach the suitable forum just in case of delay in delivery/possession of the flat and also the forum could pass a decree directing the builder/developer to return the money along side compensation for any loss or injury cause to the homebuyer. These forums even have the ability to grant punitive damages, if deemed fit and even impose penalties on the developer/builder which can also include imprisonment.
Insolvency & Bankruptcy Code, 2016
Comparatively a brand new enactment, it is robust enough to force the builder/developer to allow some respite to the homebuyers. This however is, by no means, a perfect selection that a homebuyer would avail. But is currently a very important possibility just in case the developer/builder goes through insolvency/bankruptcy.
The remedy provided under the IBC, 2016, was given the required shot once the legislature took into consideration the very fact that home buyers were not considered under a precise category of creditors and were clubbed with unsecured creditors. Hence, the legislature taking into consideration the mounting troubles and grievances of those home buyers provided a recognition to the house buyers as financial creditors and amended the IBC, 2016, vide Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018, to supply the same.
As a result, the home buyers are currently entitled to the receipt of a part of the sale of assets under the liquidation method. Being provided identical rights as that of financial creditor, the house buyers now even get an opportunity to be a part of the Committee of Creditors and even vote throughout the Corporate Insolvency Resolution method.
Apart from the above mentioned ways, the home buyers will put together a criticism under the provisions of Indian legal code with the police and even the Economic Offences Wing of the Police to determine for diversion of funds and siphoning off by the promoters.
Other than the choices as illustrated above, the government machinery conjointly plays a significant role in providing adequate measures for safety of home buyers, however, the fear of law within the developer/community is still needed to be reinforced to confirm that confidence of those who are the most important parts of this sector, still remains high.