Indians who buy property directly from property developers and later discover poor construction or other problems such as leaks and cracks can now sue the developer under that country’s Consumer Protection Act.
Relying on precedents from earlier cases, a division bench of Justices TS Thakur and Gyan Sudha Misra has said that property development constitutes a service under the Act.
“If a builder of a house uses substandard material for construction or makes false or misleading representations about the condition of the house, then it is denial of a facility or benefit of which a consumer is entitled to claim value under the Act,” the court says. “A flat with a leaking roof, or cracking wall or substandard floor is denial of service….when the contractor or builder undertakes to erect a house or flat then it is inherent in it that he shall perform his obligation as agreed to.”
According to a report in Indian newspaper The Hindustan Times, the ruling had been sought by a construction firm seeking clarification on whether or not developing a plot, providing a flat and amenities to a consumer amounts to rendering a service under the Act and therefore whether or not the firm’s activities were subject to it. The court held that this was so.
Consumer advocates welcomed the move, which is important as it enables flat or unit owners to obtain rulings faster and at less expense through consumer courts as opposed to going through a cooperative court or high court.