Brief of SC on Unfair Trade Practices by Builders - Vrankers

 Brief of SC on Unfair Trade Practices by Builders 

Quick Brief of the order passed by the Hon'ble Supreme Court on the “Unfair Trade Practice”, addressing the one-sided contractual terms contained in the Apartment Buyer’s Agreement. The Judgment of the Apex Court was delivered by Indu Malhotra, JJ. 

1. Brief Facts of the Case refer to the situation where the flat-buyer entered into an agreement with the builder to purchase an apartment. The builder had acquired the occupancy certificate for the said building for almost 2 years after the date set forth in the agreement. 

2. However the builder failed to give the possession as per the stipulated time. A complaint was filed by the respondent before the National Commission under the Consumer Protection Act, 1986 for inadequacy of service. 

3. It was held that the respondent could not be compelled to take possession of the building at such a later stage. Further, it said that the clauses of the said agreement were wholly one-sided, unfair and unreasonable, and not binding on the respondent. 

4. Three Issues settled by the Apex Court namely: - Verification of the date to calculate the 42-months period for handling over the apartment, - Whether the respondent’s agreement was one-sided and unjust? - Whether the respondent could have terminated the agreement because of the delay in handing over the building? 

5. The Hon’ble Supreme Court upheld the decision of the National Commission under the Consumer Protection Act, 1986, and held that this was a clear case of scantiness of the service. It is to be considered as the “unfair trade practice” under Section 2 (1)(r) of the Consumer Protection Act, 1986. 

6. The 42-months time period in the Agreement for giving the possession of the building should be in order from the issue date of the NOC, and not from the date of building plans being sanctioned. 

7. When the Bench of the Apex Court read the agreement, it was clear that the agreement was absolutely partial and vexatious, and it reflected the one-sided terms of the respondent’s agreement, which were in the goodwill of the appellant. 

8. Further, the Bench held that, “The powers of the Consumer Forum were in no manner unnatural to declare a contractual term as unfair or one-sided as an incident of the power to desist unfair or restrictive trade practices.”

 9. On that account, it was held that the appellant cannot push the respondent to stick by the one-sided contractual terms in the respondent’s agreement.