Source: Etrealty: In a big relief to lakhs of home-buyers who are put at a disadvantage while signing agreement containing stringent clauses against them and lenient provisions against the builders for violation of the accord, the Supreme Court on Tuesday said such one-sided and unfair agreement would not be binding.
A bench of Justices UU Lalit and Indu Malhotra said a real estate company could not be allowed to bind home-buyers with one-sided contractual terms which protect the interests of the company at the cost of the buyers. “Terms of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder,” the bench said
A home-buyer is always put to a disadvantage in flat purchase agreement between the buyer and the company. The agreement is always skewed against buyers who are to pay higher rate of interest in case of delay in payment and the builders are allowed to cancel allotment in case of default of payment. But the punitive clauses against the builders are lenient with leeway given to them in case of delay in handing over possession and the interest rate in case of delay is very less.
“The contractual terms of the agreement are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement were wholly one-sided and unfair to the flat purchaser. The Builder could not seek to bind the Respondent with such one-sided contractual terms,” the court said.