A slump in the market, lack of adequate government regulations, the failure of real estate developers and builders to fulfill aspirations of people who invested in the sector: These factors have resulted in the highest number of litigations in consumer courts against builders in Haryana.
As per data collected from Haryana State Consumer Disputes Redressal Commission, of a total of 187 complaints received by the State Commission this year, till October, as many as 116 complaints are against builders and real estate developers. This is followed by cases against insurance companies and hospitals, which are relatively lesser.
The trend is reflected in the data collected from the district forums as well. Legal cases with claims of over Rs 20 lakh are dealt by the State Commission, while those below the amount of Rs 20 lakhs are dealt in the districts’ consumer forum.
“This is bound to happen. After there was a boom in real estate in 2007, many people invested in real estate allured by advertisements and were given allotment letters. But, when they did not get the physical possession of the property/flat after two-three years, cases started coming up,” said advocate Pankaj Changothia.
In most of the cases, complainants either alleged deficiency in service due to long delay in possession of property/flat, or unfair trade practice on account of absence of necessary approvals from the government, and demand possession of property/flat in time or refund of the money deposited earlier.
Highlighting that there is more awareness among consumers about their rights, advocate Ajay Jagga, Punjab and Haryana High Court, said litigations against builders were likely to increase in the next few years, in the absence of adequate government regulations in real estate.
“There is lack of adequate regulations to check real estate sector in Haryana. Builders are coming up with false promises. Projects are not being completed on time,” said Jagga, adding that there is more supply and less demand and the banks are not much sympathetic to real estate developers.
Among most common respondents in the cases were Ireo Fiveriver (13), Rangoli Buildtech (9), Era Landmarks (6), Vatika Group (9), while, several cases were filed against Bhoomi Infrastructure and Mount Kailash Land Base in the district forum.
Another advocate in the Punjab and Haryana High Court, Vikas Chatrath, highlighted that more consumers are bound to avail the legal option when the stakes are high and the amount claimed is highest in real estate sector.
Talking about the issue, one of the builders, Kulwant Singh, managing director, Janta Land Promoters, attributed the delay in handing over possession of flats to the slump in the market.
“Around 2006-2009, there was a boom in market, and a number of builders started investing. People booked the flats, but in the next few years, there was a sudden slump in the market. If there were 100 flats, the builder got payment for 50, and with less money at hand, the flats were not built on time, leading to delayed possession and so, the complaints. The banks are also not sympathetic to builders during these times,” said Singh.