Builder-buyer agreements: “Unconscionable contracts” if favours only builder's interest

National Consumer Disputes Redressal Commission (NCDRC) while dealing with an appeal against the state commission observed that some builder-buyer agreements are & lsquo unconscionable contracts as the terms of these contracts are generally in the favour of the builder or the service provider.

A complaint was filed against Kanpur Development Authority regarding unfair trade practice and deficiency in service as they were keeping the amount for more than 423 days and refunding it without interest.

Here, the complainants have accepted the refunds from KDA for principal amount because interest was neither paid nor offered at the time of the refund.

The Respondents contended that the petitioner is not a “ consumer” as auction purchaser is not considered as consumer.

However, the commission rejected the contention and held that the complaints are consumers of Kanpur Development Authority and auction process was not concluded owing to defaults by KDA.

The commission observed “ The builder exercises his right to charge penalty or interest at 18-24% on the delayed payments of installments. Thus in our view, in the interest of natural justice, the consumer at large deserve to receive same interest from opposite parties in case of fault or deficiency.”

The national commission set aside the order passed by state commission and allowed the appeal and directed KDA to pay a sum of INR 8,91,880 to the complainants along with the interest @ 6% per annum from the date of filing of his complaint within eight weeks from the receipt of this order failing which the entire decretal amount will carry interest @ 9% per annum.