How do consumer courts protect NRI from builders and developers?

It has often been observed that builders and developers try to cheat Non-Resident Indians (NRI) by promising to deliver them fully furnished flats and then fail to deliver the possession of such flats in time. In such a case what remedy does a non-resident Indian have under Consumer Protection Act?

Let us study this question with a practical example. Mr X purchased an apartment for his family and personal use in SAS Nagar Mohali. He paid the booking amount of Rs. 5 lakhs. The total amount to be paid was Rs. 50 lakhs out of which Mr X paid Rs. 47 lakhs. After that, an agreement was executed between the parties as per which possession of the apartment was to be delivered to Mr X within thirty-six months from the date of allotment. In case the builder failed to hand over the same, it was liable to pay compensation of Rs. 100 each month till the delivery of the same. Mr X had taken loan of Rs. 30 lakhs from a government bank purchase this flat. Even after payment of so much money, the builder refused to tell Mr X as to what was the date of delivery of possession. Mr X visited India so many times but the builder expressed his inability to deliver the possession of the said apartment. Mr X tried to settle the matter amicably but even that proved futile.

Mr X only had one remedy and that was to file a complaint in the State consumer commission, Punjab. He filed a complaint under section 17 of the consumer protection act, 1986 and after notice of motion was issued by the forum, written statement of the builder was filed. The builder took an objection that there was an arbitration clause in the agreement and also that Mr X was not a consumer as he was a resident of Canada and had purchased property as investment and not for personal use. It was further argued by the builder that the time was not of the essence of the contract and that anyways Mr X was being compensated as per the clause in the agreement itself. It was further stated that since the application form for the apartment was signed in Canada, courts or in the forums or tribunals had no jurisdiction to try and entertain the case in India.

However, the State consumer commission, Punjab did not agree with any of the argument made by the builder the court. The consumer commission decided the case in the favour of the non-resident Indians. It was held by the consumer commission that the arbitration clause could not take away jurisdiction of the consumer courts. The commission further held that since the non-resident Indian had specifically pleaded that he had purchased the apartment for personal use, an argument or pleading by the builder that it was purchased for investment will not have any effect on the complaint made by the non-resident Indian. Further Mr X was also able to prove that he required the flat so that his children could study in India for some time. If that was the case it was very clear that the apartment was purchased for residential purpose only. The commission also held that Mr X could not be made to wait for infinite period of time for the actual physical possession of the apartment. The commission therefore directed the builder to refund the amount which had already been paid to the builder by stacks along with compounded interest of 15% per annum apart from compensation to the tune of Rs. 3 lakhs for causing mental agony and physical harassment of the complainant and cost of litigation of Rs. 50,000 to be paid to Mr X. All this was to be paid within two months from the receipt of certified copy of the court order.

Therefore the courts in India are extremely vigilant that Non-Resident Indians (NRI) are not harassed by builders and developers in India. Litigation on behalf of Non-Resident Indians (NRI) against builders and developers has 99.99% chance of success because of inclination of courts towards welfare of Non-Resident Indians (NRI).