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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 117385
Experience:  Attorney experienced in commercial litigation.
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Builder asking @ Rs.250/ sq.ft from purchasers. Says

Customer Question

Builder asking for loan @ Rs.250/ sq.ft from purchasers. Says loan is a must and those who dont pay will not get rent compensation (for the delay in completion) from April 2016 and their flats will be built /completed and handed over only in early 2018. Only last week NGT cleared the resumption of work with conditions after work stopped in feb 2015. what to do
Submitted: 1 year ago.
Category: Consumer Protection Law
Customer: replied 1 year ago.
In feb 2016, the builder said in purchasers meeting that money is not the issue and NGT Clearence is the problem.
Now he says no money to start construction and demanding loan and says it is mandatory. He says if 75% of owners in a particular block give him the loan he is asking , then only work will be undertaken in that block; otherwise no work on that block and no rent compensation for that block also. CMDA approval for construction expires in August 2016. Most of us have paid our dues at appropriate time. From last year feb(2015) we are paying Full EMI to our bankers. What to do ..about 1500 owners affected. Please advise
Customer: replied 1 year ago.
Last year when he was fined by NGT to pay 36 cr for not getting the EC before he started the construction. In mid 2015, he the builder asked us for loan which majority of us paid(min one lakh) without any interest. Now after NGT clearence to start construction, he is demanding compulsory loan. He never acknowledges any letter/mail to him. He conducts meeting without any interactive nature. People have to listen only.
He says that only blocks that give him loan will be completed and handed over next year and other have to wait till 2018.
How can he give possession to some when ...NGT...says...quote"Subject to the Project Proponent strictly adhering
and complying with the directions terms and conditions issued in the order granting Environmental Clearance and the orders
granted by all the Authorities in this matter we permit the Project Proponent to continue activity of its project
and complete the same in accordance with law.
In addition to the conditions stated in the Environmental Clearance the Following three conditions shall be carried out by all the concerned Authorities and particularly the Project Proponent.
SEIAA, Tamil Nadu shall verify the compliance of all pre-construction conditions stipulated in the Environmental Clearance and shall effect a joint inspection before allowing third party interests.
Project Proponent shall make efforts to use the treated waste water optimally within the premises. For the surplus quantity, Project Proponent shall seek expert opinion in respect of the deep well/ deep bore injection of treated waste water from the Institute of Hydrology/ Anna University, Chennai.(iii)The natural drainage shall be maintained without any concretization. Wherever natural storm water drains have been obliterated, they shall be re-routed proper ly so that flooding/ ponding does not occur, even during monsoon.The Project Proponent would be entitled to complete his project but will not give possession any third party, till unless the joint inspection team consisting of SEIAA, Tamil Nadu, Tamil Nadu Pollution Control Board and
representative of MoEF inspects the project and submit a report of satisfactory compliance of all the conditions stated in this order . Project Proponent shall give atleast two weeks’ Notice to this Committee ,requesting for inspection of the premises. Once the inspection report is submitted to the Tribunal and is found to be satisfactory..".unquote.
Please advise what to do with this builder.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Seems the builder is not only in breach of contract with the owners, but he is likely seeking to scam the owners to pay more of the builder's debt off. What happens in these cases is the builder has likely spent all the money he had for this project on bills for another project and now he is trying to make the owners of the new project foot the bill. If you give him this "loan" he is not going to pay it back, he is likely to continue to demand more money with more excuses and building still will not get completed.
So, at this point it is likely better to sue the builder for breach of contract and take the property away from this builder to the owners and once the owners take control they can get a new builder in. This builder is breaching their contract and it simply seems he will continue to bleed the owners for more money on the project that will not get repaid.