Housing society is promoter for redevelopment of its buildings

Kamlesh Bhuvan CHS in Chembur had entered into a redevelopment agreement with Mahavir Enterprises for redeveloping its dilapidated building. There was also a tripartite agreement between the society, each member and the builder for allotment of flats in the re-developed building. It was agreed that each member would get additional space of 20% in the new building. The society also took a bank guarantee of Rs 50 lakh from the builder.

However, the builder defaulted in handing over possession of the flats on time and also failed to pay compensation for alternate accommodation for the period of delay. A member of the society Padam Chandiramani, filed a complaint before the Additional Mumbai Suburban District Forum against the builder—Mahavir Enterprises—through its partners D Gala and K Shah as well as against the housing society.

The builder contested the complaint. He stated that the keys to the flats of all the original 12 members, including Chandiramani, had been handed over to the society but the society had failed to hand over possession to its members. He argued the society had an obligation to ensure that all its members would get possession of the flats within 24 months, but had failed to do so. The society did not care to contest the case.

The forum held that the builder as well as the society were jointly and severally liable to put Chandiramani in possession of her flat, and ordered delivery of the flat within two months. Additionally, the builder was also ordered to pay compensation at the agreed rate of Rs 25 per sq ft per month along with 10% interest. Further, litigation costs of Rs 5,000 were awarded.

The builder and the society challenged this order in appeal. The state commission observed a co-operative housing society would come within the ambit of the definition of a promoter, developer and builder as it has promised it give possession of flats to its members in the redeveloped building.

Accordingly by its order delivered on April 12 by Justice A P Bhangalae for the bench along with Usha Thakare the Maharashtra State Commission modified the order passed to apportion the liability between the builder and the society If held that the builder would be liable to pay Rs 25 per sq ft to Chandirarmani for the period of delay till the date of handing over keys to the society, and thereafter, the society would be liable to pay the same amount of compensation for its failure to put Chandiramani in possession.

Jehangir Gai

(The author is a consumer activist and has won the Govt. of India’s National Youth Award for Consumer Protection. His e-mail is jehangir.gai.columnist@outlook.in)

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