Chintels Paradiso collapse: Residents could approach consumer forum, say lawyers

IIT-Delhi, in its report in February 2023, recommended the evacuation of residents from towers E and F as well, which is yet to be carried out.

In a bid to settle with the homebuyers, the real estate company has held out two solutions:
(i) buyback of the property at the rate of Rs 6,500 per square feet (sq ft), or,
(ii) redevelopment of the flats at the same site.

However, those opting for redevelopment will have to incur an additional expense of Rs 1,000 per sq ft owing to the increase in prices of building material and labour. The same apartment will end up costing them more for no fault of theirs.

Some homeowners have protested stating that the offer is unfair to them. Rakesh Hooda, President of the Residents Welfare Association (RWA) of the society, said that the builder is asking for Rs 1,000 per sq ft if residents chose to opt for the reconstruction of flats, which is not fair.

Litigation already pending

A few residents of the society approached the Supreme Court in 2022. The apex court sought Chintel's response in November 2022. The case is currently pending.

Notably, the minor son of a woman who died in the collapse had approached the Supreme Court for recourse. However, the petition was recently withdrawn from court.

Consumer litigation

Lawyers note that the residents could institute a class action proceeding at the National Consumer Disputes Redressal Commission (NCDRC). A class action proceeding is initiated when a group of people, aggrieved with the same action, brings a suit or other proceeding before a court/tribunal/forum on behalf of a larger group of persons.

The NCDRC is governed by the Consumer Protection Act, 2019, which was introduced to curtail unfair trade practices, defects in goods, and deficiencies in services by businesses against consumers.

Since the residents have purchased the apartment from the builder and have paid substantial consideration towards it, they will be considered consumers under the Act. They could move the NCDRC and seek the tribunal to hold the builder responsible for deficiency in service.

Rohit Jain, Managing Partner at Singhania and Co, said, “This is not a case where the builder failed to deliver a project on time. (Instead), the homebuyers have to choose between seeking a refund or wait for possession. Therefore, RERA will not apply, as the occupants were already living in the building, and they are compelled to leave because of a subsequent development, the unfortunate accident in this case. The homebuyers can approach the consumer court for deficiency of service seeking compensation or file civil suit seeking damages.”

Jain noted that criminal proceedings are already on wherein the CBI is investigating the matter. He said, “The homebuyers are not bound to accept the offer of the builder, but they will have to weigh the pros and cons of accepting a lesser, but readily offered amount versus opting to fight for what they feel is their due, in what is sure to be a long drawn litigation.”

Nikhil Varma, Managing Partner at law firm MVAC, said, “The consumer court is a specialised court that deals with cases related to consumer grievances where the homeowners can file a case under the Consumer Protection Act, 2019. The property owners can also pursue the case in the civil court via a civil case against the builder, seeking higher compensation as civil courts deal with cases related to property disputes and other civil matters.”

However, Suvigya Awasthi, Associate Partner at PSL Advocates and Solicitors, opines that the residents should wait for the outcome of the litigation in the Supreme Court.

He said, “It is highly likely and strongly anticipated that the issues regarding the two options offered by Chintels will be addressed on the next date of hearing at the Supreme Court itself. Even on prior occasions, the apex court had made suggestions regarding conducting a joint exercise between the residents and representatives of Chintels to work out the framework for the quantum of compensation and alternative avenues that may be available to resolve the concerns of the homebuyers."