Supreme Court On One Sided Agreements

The bank considered a complaint against the National Consumer Commission`s injunction that the clauses invoked by the owner to oppose the complainant buyer`s claims were totally unilateral, unfair and inappropriate and could not be invoked. The bank, composed of Justice UU Lalit and Justice Indu Malhotra, also found that a developer could not attempt to license a home buyer with unilateral contractual terms. In Pioneer Urban Land – Infrastructure Ltd/Govindan Raghavan, the Supreme Court ruled that a unilateral contract contrary to the interests of the purchasers cannot be final and binding if it is proven that the buyer was likely to be considered signable on the polka dot line. The Supreme Court Bench of Justice U.U. Lalit and Justice Indu Malhotra found that the unilateral clauses contained in the owner-buyer agreements were considered unfair business practices within the meaning of Section 2 (r) of the Consumer Protection Act of 1986. The bank also indicated that the owner could not hire him in accordance with the unilateral clauses contained in the agreement. The complainant filed an appeal against the two orders of the National Consumer Litigation Forum. In a recent remarkable decision, the Supreme Court held that the unilateral clauses in the housing purchase agreement constituted an unfair business practice and that such conditions could not bind the homebuyer. “After reviewing the facts, the National Commission asked the developer to repay the money, with interest of 10.7%, above the interest rate provided by the agreement, after taking into account the cost of borrowing the loan and the interest rate imposed by the Haryana Real Estate (Regulation and Development) Rules in 2017. He also noted that although the developer received the certificate of occupancy during the court filing, because the delay is more than 2 years and also, since the buyer had already bought another apartment, the developer could not put the buyer in possession of the apartment, says Sandeep Shah, partner, N.A Shah Associates LLP. Referring to the agreement, the bank indicated that the unilateral clauses were obvious in that interest on late payments from the buyer to the owner was as high as 18%, while the interest the owner had to pay to the buyer for the late holding was only 9%.

The bank also indicated that the termination clause in the agreement was also unilateral, since the purchaser had to wait 12 months after the expiry of the additional period after the agreement and then had to give notice for a period of 90 days, while the owner could automatically terminate the contract if a portion of the buyer was behind on its contractual obligations and the buyer was not to be delayed within 30 days of the termination period.