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NCDRC says construction of additional tower by M3M Group ‘illegal’; directs builder not to proceed with its construction

Terms the new construction as “a clear deficiency of service”; 300 buyers of M3M Merlin of Sector 67, Gurugram, had filed the complaint; the order also provides relief on IFMS, excess EDC/IDC collected, and poor quality of construction.

The National Consumer Disputes Redressal Commission (NCDRC) on June 23 termed the construction of an additional tower by Gurgaon-based M3M Group as ‘illegal’ and the act of not taking consent of buyers for the purpose of raising new construction as ‘a clear deficiency of service' and directed the builder not to proceed with its construction.

The application was filed by 300 buyers of the project M3M Merlin located in Sector 67 in August 2020.

“…going for a new tower is a clear deficiency of service in terms of the Consumer Protection Act, 2019 and Haryana Apartment Ownership Act, 1983. It is another matter that if the builder had obtained the consent and then applied for change in the site plan along with permission for a new tower, it would have been in order as per the statutory provision. Having not obtained this consent, we take the construction as violation of the aforementioned statutes. In view of the aforesaid discussions, we deem the construction of Tower 11 as illegal and direct the Opposite Parties 1 and 2 not to proceed with its construction,” the order said.

The consumer complaint was filed under Section 58 read with Section 35(1)(c) of the Consumer Protection Act, 2019 by homebuyer Ajay Kumar Verma and others against M3M India Private Limited and Others seeking certain relief and compensation, on the ground of alleged deficiency on the part of the builder and other parties.

Also Read: Supreme Court upholds NCDRC order directing NCR-based builder to refund Rs 1.9 crore to homebuyer


The buyers stated in their application that while the project was supposed to consist of 10 residential towers, the builder proposed construction of a new tower, i.e. 11th tower, with no prior intimation or consent of the existing buyers. They said that it was only in April-May, 2019 that it came to their knowledge that the builder was planning to construct a new tower without seeking their prior consent.

The complaint also noted that the buyers took possession of their units from 2017 onwards and it was only after five-six months of taking possession that the defects and deficiencies started coming to their knowledge. However, till date none of the defects have been cured, the application said.

The buyers had prayed that the builder should not be permitted to construct the 11th tower in the project until consent is taken from all the apartment owners of the project M3M Merlin.

Also Read: A homebuyer not an investor despite owning multiple properties with same builder, is entitled to refund: NCDRC

“In our considered opinion, obtaining the consent of flat owners becomes essential when a new tower is being constructed and which is in deviation to the certain approval, site plan, number of towers, Occupation Certificate, etc. initially promised to the allottees and as per Haryana Apartment Ownership Act, 1983. The submission of the learned Counsel for the Opposite Parties that the consent was already taken from the flat owners in the Builder Buyer Agreement and the Deed of Declaration is disingenuous without a basis.

“We do agree that certain caveats and provisions were mentioned in these two documents. Nowhere there is clarity that the builder is proposing construction of a tower in the area earmarked for future development. So the rightful process should have been adopted by the builder to obtain the consent of the flat owners and then proceed ahead with obtaining the approval of the DTCP for change of layout and construction of a new tower. We do not see any evidence of any effort taken by the Opposite Parties 1 and 2 to connect with the flat owners or sending any communication to them with regard to their plan for construction of a new tower,” the order said.

“…there is a major deficiency of service on the part of the Opposite Parties for having promised to the prospective flat buyers in the form of the brochure that a certain kind of Project is being conceived, which will have only 10 towers and a low-rise EWS building on one side. Having gotten applications from the flat buyers and having accepted booking amounts, the developer has been changing the plan one at a time in deviation to the original Project. The first change is that of the shift of EWS housing area and next the construction of a new Tower. It is admitted that the flat buyers have not objected to change in 2014 for shifting of EWS area. But the area for future development does not necessarily mean construction of new high-rise tower.

"The same story continued with the Occupation Certificate, Deed of Declaration and Builder Buyer Agreement in 2017 keeping area for future development as vague as possible and without any inkling of construction of a new Tower,” the order said.

Piyush Singh, advocate, who represented the 300 homebuyers of Merlin, said that this is a massive victory for homebuyers residing in completed projects since in this case the residents were facing harassment of illegal construction within the common area, which is not only a safety hazard but also decreases the super area of the project. The order also provides relief on the issue of IFMS, excess EDC/IDC collected and poor quality of construction.

“This judgment will reinforce confidence among buyers that they do have a legal remedy against a developer even if a project is complete and registry is done,” he added.

“Suo-moto cognisance should also be taken by the authorities and investigations be launched, as to how permission of such an illegal tower was given without due compliances and strict penalty should be imposed on the builder,” said Aditya Parolia, advocate, PSP Legal.

An M3M spokesperson said that while the company has “high regard for NCDRC, we believe that the facts have been falsely presented against M3M by the complainants. We now propose to take this matter further for justice.”

The buyers, in their application, had also said that the builder should be directed to obtain the necessary permissions from concerned authorities to acquire the revenue road for the project to be complete in all respects, within six months from the date of filing of their complaint and if the same was not done, the builder should be directed to pay Rs 5 lakh to each of the owners as compensation towards the devaluation of property and threat to life and security on account of revenue road.

The homeowners had also prayed that the builder should be directed to refund the excess EDCIIDC charges collected from all the apartment owners of the project with interest at the rate of 18 percent per annum from the date of receipt of such payment towards EDC/IDC charges.

Also Read: SC orders demolition of Supertech twin towers in Noida; observes construction was illegal as consent of buyers not taken

They had also said that the builder should be ordered to disclose the details of all common areas along with calculation of each apartment area and proportionate common area and refund the excess amounts of super area charged, if any, to each apartment owner and to conduct the elections for appointment of the governing body in the complex.

The NCDRC order said that the issue of RWA needs to be pursued by the buyers as per the statutory provisions in the appropriate forum.

As for the defects in construction of the apartments and towers in the project, M3M India Private Limited and Consolidate Realtors Private Limited have been directed to appoint statutory approved architect and engineer within 15 days, who will then submit a report within one month on the actual position on ground with respect to what was proposed in the agreement and they would have to carry out such changes/ rectification as recommended within four months of receipt of this report.

On the issue of EDC/IDC, they have been directed to get the account of receipt and expenditure vetted by a chartered accountant within one month and return the excess fund, if any collected, from the flat owners.


Vandana Ramnani
first published: Jun 23, 2022 08:34 pm
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