Jaypee Kalypso Court Case: Silver lining for Homebuyers

You may recollect the landmark judgement of the National Consumer Forum in the case of Jaypee’s Kalypso Court reported by us here . The Judgement, which many saw as a game changer, got a lot of media attention with all leading newspapers covering it. Although this was not the first instance that the National Commission had ordered a compensation of 12% per annum to consumers suffering from delay of projects, the judgement was path breaking as it also touched upon other grievances pertaining to unilateral increase of ‘super area’ and car parking charges being illegally charged from consumers despite the permission for the same not being there in the UP Apartment Act. A debate on issues other than

A debate on issues other than delay in giving possession started at the national level. While many saw this judgement as a path breaker and expected it to change how the real estate functions in the country which at present is unfairly balanced in favour of builders/developers, others were sceptical about the effect ‘on ground’. Homebuyers wondered whether the judgement will only have ‘paper value’ or whether the concerned allottees will see actual relief coming their way. This scepticism is the result of several appeals been filed by the builder lobby before the Supreme Court and the concerned builders securing stay on the judgements of the National Commission on the strength of their high profile lawyers. The same understandably made the consumers believe that even if they were to succeed before the National Commission, they would not be able to achieve much practically, as the judgement of the National commission will have to pass the test of the Supreme Court which may take years.

We at logical buyer deemed it important to follow the progress in the matter to ascertain whether any real relief has come to the concerned allottees. The news report published in the Economic Times available here, at first look, suggests that the judgement has also met the same fate like many others and that the Supreme Court has stayed it in an appeal filed by the builder. However, a complete reading of the article informs that all was not lost before the Supreme Court, the Supreme Court categorically denied stay on the other two parts of the judgement, that is,

that the developer does not have the right to claim additional amount on the pretext of increased super area at the time of giving possession if the same is done without the consent of the buyer and

also that the developer does not have the right to charge independently for car parking spaces in Noida.

The report also indicates that Jaypee undertook to provide to the buyers’ alternate arrangement till the time their apartments are not ready.

To learn more, we contacted Advocate Sahil Sethi, who is representing the homebuyers in this matter. Sahil confirmed that not only did the Supreme Court refused to stay the findings of the National commission as regards super area and car parking, the Supreme Court (order available here ) clarified that Jaypee will give possession of the apartments without charging any money from the allottees on account of increase in super area and car parking, till the final disposal of the appeal. Sahil was pleased to share with us that all 10 allottees who had participated in the complaint have been given possession either of their own apartment or of suitable alternate units that Jaypee offered from its unsold inventory.

“Does this mean that homebuyers in Uttar Pradesh are not bound to make payments for an increase in super area and car parking”, we asked Sahil, to understand the implication on other homebuyers. “In light of the specific stay on only one part of the judgement, remaining observations of the judgement continue to be good law and hence will surely have a precedential value for others who have taken similar grounds in their complaints before the National Commission”, answered Sahil.

In what could be a silver lining, we at Logical Buyer hope that the progress made on this matter (The Judgement was delivered within a record time of 5 months from filing) encourages other homebuyers to come forward against unscrupulous builders and any distrust in the judicial system should wither away. A special mention to people like Mr. Arvind Jain, President of DTPOWS, the society that filed the case, who are selflessly taking the campaign of homebuyers forward. We at Logical Buyer are delighted to see a paradigm shift from the times when home buyers could be suppressed and deterred with long drawn legal proceedings and the big lawyers (Mr. Kapil Sibal is representing Jaypee before the Supreme Court) who builders engage in defending their actions. We wish the team DTPOWS all the best and hope for a complete victory before the Supreme Court.

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