One Sided Clause And Unfair Trade Practice

The Apex court in a consumer empowering judgment (Pioneer Urban Land & Infrastructure Ltd v Govindan Raghavan) has held that incorporation of one-sided clauses in an agreement between builders and flat purchasers constitutes an unfair trade practice falling under Section 2 (r) of the Consumer Protection Act, 1986

Brief Facts

• The Appellant/ Builder launched a residential project in Gurugram. The Respondent/Flat Purchaser entered into an Apartment Buyer's Agreement with the Builder to purchase an apartment in the said project.
• Per clause 11.2, the Builder was to make all efforts to apply for the Occupancy Certificate within 39 months from the date of excavation (with a grace period of 180 days) and offer possession of the flat to the Respondent. The Builder failed to apply for the Occupancy Certificate as per the stipulations in the Agreement and subsequently the Purchaser approached the National Forum.