Supreme Court On One Sided Agreements

On 8 May 2012, a bank of judges U U Lalit and Indu Malhotra found that the agreement between Pioneer Urban Land & Infrastructure Ltd and Govindam Raghvan and others between Pioneer Urban Land & Infrastructure Ltd and others on a dwelling worth Rs 4.83 Cr in Gurugram was “unilateral and completely unfair”. There is, however, some good news for home buyers. In the judgment delivered on 2 April 2019 in the case of Pioneer Urban Land & Infrastructure Ltd v. Govindan Raghavan, the Supreme Court ruled that the terms of a contract are not final and binding if it is proved that the buyers of housing had no choice but to sign a contract framed by the contracting authority on the lines in points. It also found that the inclusion of unilateral clauses in an agreement constitutes an unfair commercial practice within the meaning of section 2(r) of the Consumer Protection Act 1986, in so far as it uses unfair methods or practices to sell the dwellings by the developer. The contractual conditions of the contract of 08.05.2012 are unilateral, unfair and unreasonable. The inclusion of such unilateral clauses in an agreement constitutes an unfair commercial practice within the meaning of section 2(r) of the Consumer Protection Act 1986, in so far as it uses unfair methods or practices to sell the dwellings by the developer. “After examining the facts, the National Commission asked the developer to repay the money, accompanied by interest of 10.7%, higher than the interest rate provided for in the agreement, after taking into account the borrowing costs of the loan and the interest rate required by the 2017 regulatory and development rules. It also noted that although the developer received the certificate of occupancy during the period of the complaint in court, as the delay lasted more than 2 years, and the buyer had already purchased another apartment, the developer could not impose ownership of the apartment on the buyer,” says Sandeep Shah, Partner, N.A Shah Associates LLP. The U.U. Lalit Supreme Court and Justice Indu Malhotra have found that unilateral terms in owner-buyer agreements are considered unfair commercial practices, pursuant to section 2(r) of the Consumer Protection Act 1986.

The Bench also found that the contracting authority could not bind the buyer under the terms of the unilateral clauses of the agreement. The appeals were brought by the plaintiffs against the two decisions of the National Consumer Disputes Redressal Forum. In light of the above, the Apex Court therefore held that the terms of the housing purchase agreement were completely unilateral and unfair to the respondent – the buyer of the dwelling – and that the complainant – the developer could not attempt to bind the respondent with such unilateral contractual clauses. In a remarkable decision, the Supreme Court recently ruled that unilateral clauses contained in the contract for the purchase of housing constitute an unfair commercial practice and that such clauses cannot detain the buyer of housing. The Supreme Court has held that the inclusion of unilateral terms in a contracting authority-buyer contract constitutes an unfair commercial practice, in accordance with section 2(r) of the Consumer Protection Act 1986. Lump sum buyer: the lump sum buyer argued that the terms of the contract were unilateral. Under the agreement, the contracting authority may calculate interest of 18% in the event of late payment, but the flat-rate buyer was only able to obtain a maximum rate of 9% for the termination of the contract due to the delay of the contracting authority. In addition, the buyer of the dwelling informed the court of an alternative sale of the dwelling by him because of an excessive delay on the part of the contracting authority and the bank loan he obtained for the purpose of the purchase of the dwelling by the contracting authority. . . .