In a remarkable judgment, the Supreme Court has recently held that a one-sided clause in the Apartment Buyer’s Agreement constitutes unfair trade practice and such terms cannot bind the flat-purchaser. UU Lalit and Indu Malhotra while sitting on the bench stated that “terms of a contract will not be final and binding if it is shown that the flat purchaser had no option but to sign the dotted line on a contract framed by the builder.”
According to the research, a home buyer is always put to a disadvantage in flat purchase agreement between 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 builder are allowed to cancel allotment in case of default of payment. But it is just visa-versa in builder’s case, the builder’s are very lenient with leeway given to them in case of delay in handing over the possession and the interest rate in case of delay is very less.
After examining one such agreement in which it was stipulated that a home-buyer will have to pay interest at 18 per cent per annum in case of delay in payment but the builder is liable to pay interest at 9% for delay in possession, the apex court said the agreement was unreasonable and biased which could not be binding. The court also said the agreement was one-sided as it entitled the builder to cancel allotment in case of delay of 30 days by the buyer to pay installment but in case of delay in giving possession of flats, the buyer could terminate contract only after a period of 12 months over the grace period.