Consumer courts – legal recourse in case of breach of contract by developer

Real estate laws

Real estate lawsAs a buyer it can be really disheartening when there is a breach of the contract by the builder. There can be instances where the builder does not deliver the property on time, there are structural changes not mentioned in the agreement, construction defects and maintenance, fraud by the developer, etc.

Many buyers are however not aware that in such cases taking legal action against the builder/ developer is not as complicated as they might seem to be.

An easy way is to approach a consumer court. The Consumer Protection Act, 1986, provides a three-tier system of redressal agency — first, at the district level known as the district forum; second, at the state level known as the state commission; and third, at the national level known as the national commission.

These forums deal in matters of real estate as well as consumer goods. The process is simple and any home buyer can file a case if there is a delay in construction, construction defects and maintenance, breach of the escalation clause, misuse of common areas, delay in compensation, etc.



1. Once there is breach of contract, you have to send a notice to the builder stating the facts and asking him to address the issues within 15 days from receiving the notice. Make sure that you send the notice via registered post of Indian postal services with an acknowledgment slip. Since the acknowledgment slip will be signed by the receiver, you will have a proof that the notice has been received by the builder.

2. If till the 15th day the builder has not taken any action to address the issues, you can file a consumer case.

3. You can either go personally, post it or register your case online. If you choose to go to the court personally, you do not need a lawyer to file the case. All you need to do is write the entire issue in detail and submit it at the concerned desk. You can also send it to the court through post. If you want to file online, all you need to go to their website and register your complain.

4. Always remember that when you write the details of the case, mention the name of the person who is responsible for the deficiency in service. You will also need to mention the compensation amount you want as refund from the developer. However, you need to justify the amount with proper documents and the court will decide the right amount for a particular case.

5. Depending on the value of the property or the compensation, the distressed buyer has to approach the consumer court accordingly. The district forum of the district concerned will take up to the value of Rs 20 lakh, the state commission for cases between Rs 20 lakh and Rs 1 crore, and the national commission for more than Rs 1 crore.

6. Since the consumer court hearing is taken on a fast-track basis, you may get a judgment in a single day if all the necessary documents are in place. If the court finds the developer guilty, it orders a compensation amount that he needs to pay to you.

However as a buyer filing a consumer case should be your last resort. So before you approach a consumer court, discuss the issue with the developer. In most cases, developers try to avoid legal battle and like to solve the matter outside the court. However give yourself a deadline to find an amicable solution with the developer withing this time period. There are many instances where developers dillydally the matter.  


However in cases of fraud and where the developer is on the run and untraceable, you will first need to register a complaint at the nearest police-station and file a criminal case. For a criminal case, you will have to hire a lawyer. Criminal cases can be lengthy because availability of hearing dates are far between.

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