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After many years of independence, even today the realty sector is remained unregulated and so far no law has been enacted to regulate it because of the evil nexus amongst builders, politicians and under-world dons. The private builders lobby has got strengthen and looting the general public. There are many cases that the life time earning of a common man with family has been swindled away by builders and the victims are not so powerful to fight against the influential builders lobby. Presently real estate sector has been converted into a well of corruption.

It is a long ending tussle between builders and home buyers that never seems to end delivering projects on time. There are umpteen cases where builders have taken extra time to finish projects while leaving home buyers to suffer fiscal setbacks. Imagine a situation where you have booked a house in an apartment complex while paying hefty EMIs and also the rent for the temporary accommodation that you currently occupy. Any delay in getting into your own house obviously means a financial loss.

A common man in Malad of Mumbai Suburb, after relentlessly pursuing a case before Consumer Forum, defeated a delinquent builder and got himself compensated at current market price of the flat which was un-delivered more than a decade ago. The buyer reportedly booked a flat for an agreed price of Rs 9.26 lakhs in the year 1999 and paid Rupees 3.51 lakhs as advance.

The builder did not perform his principal obligation namely delivery of the flat besides committing several criminal offenses under MOFA. The buyer successfully agitated before the Maharashtra State Consumer Disputes Redressal Commission (MSCDRC) and got the order for payment of Rupees 25.25 lakhs passed against the delinquent builder who cheated him.

There is a lot to think about this case about the builders going unpunished and that is what causes deficiency in service i.e. a civil wrong. If the deterrents were activated to curb the crimes it would have acted as obstacles to deficiency in service. The builder’s criminal wrong-deeds were; (1) he took more than the maximum permissible 20% of total flat price as advance i.e. Rs 3.51 lakhs, (2) he committed a criminal offence also of not executing an agreement mandated under Section 4 of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management And Transfer) Act, 1963 (the MOFA).

The question of another obligation of the registration of the agreement did not arise as none was written down by the builder; (3) another offence under MOFA. Till today apparently these criminal-deeds are like technical lapses as the State Administration does not seem to consider them as worth a blink of an eye, but the important fact was these criminal deeds induced the builder to commit a civil wrong and the flat was ultimately not delivered.

Instead, what delivered by the builder was plethora of excuses for years together, a torture worth imagination but only a common man can do it and not the authorities responsible to prevent them happening. One more highly contentious legislation namely the Maharashtra Housing (Regulation and Development) Act, 2012 (Maharashtra Housing Regulation Act) is poised to replace this alleged incompetent MOFA (as admitted by the Government after over half a century!!!).

The Maharashtra State Consumer Disputes Redressal Commission reasoned out the compensation of Rs. 25.25 lakhs by reckoning the land cost per sq. ft built-up area at Rs10,191/- as per the Government Ready Reckoner Rates for stamp duty in the same area. Since the buyer had paid Rupees 3.51 lakhs, (37% of the prevalent flat price) for 620 Sq. Ft prorated value worked out to Rupees 23.37 lakhs which the Commission held as payable to him by the builder. The remaining amount of Rs.1.87 lakhs was assigned towards the compensation for money spent on travel and for suffering the mental agony, harassment and the costs of the complaint.

Now the most important un-attempted question; Should the builders go scot-free despite committing acts attracting penal provision up to 5 years’ imprisonment under MOFA as listed below?


(1) Any promoter who, without reasonable excuse, fails to comply with, or contravenes, the provisions of Section 3,4,5 (save as provided in Sub-Section (2) of this Section), 10 or 11 shall, on conviction, be punished with imprisonment for a term which may extend to three years or with fine, or with both.

(2) Any promoter who commits criminal breach of trust of any amount advanced or deposited with him for the purposes mentioned in Section 5 shall on conviction be punished with imprisonment for a term which may extend to five years, or with fine, or with both.

(3) Any promoter who, without reasonable excuse, fails to comply with or contravenes any other provision of this Act or of any rule made there-under, shall, if no other penalty is expressly provided for the offence, be punished, on conviction, with imprisonment for a term which may extend to one year, or with fine which may extend to ten thousand rupees, or with both. UNQUOTE

Under Section 3 he must give information and the documents listed in this Section.

Under Section 4 he must execute agreement/register it and take advance (below 20%).

Under Section 5 he must maintain a separate bank account of sums taken as advance.

The moot question therefore is why the presence of the proven evidences of criminal offences under a State Law (MOFA) on the records of the neutral forum like the Consumer Court should be allowed to go un-recognized for appropriate punitive actions by the competent court in the State? Should the Consumer Forums not reach out to potential remedial measures which can help cut back the complaints from taking place in future which later need not come up for adjudication before that body?