Builder made liable for promises made in brochure


In its advertisement brochure for sale of a housing complex in Mumbai, Ravi Developments promised to provide common amenities such as a ground, garden, water fountain, CCTV cameras and intercom to the flat purchasers. However, it failed to do so. As a result, Gaurav Regency Cooperative Housing Society complained to the Thane consumer forum.

The forum directed the builder to provide the amenities within three months of the order failing which a penalty of Rs. 200 per day would be imposed until compliance. It also directed the developer to pay Rs. 2 lakh to the society for failing to obtain the occupancy certificate (OC) and provide the amenities.

The developer appealed to the Maharashtra State Commission. It contended that there was no promise in the sale agreement to provide the amenities. The advocate for the housing society argued that the flat purchasers had invested in the property on the basis of promises made in the advertisement.


The Commission upheld the order of the Forum. It observed that builders have to fulfill promises made in advertisements and brochures. It also ordered the developer to pay Rs. 5,000 to the society towards litigation costs.

Point of law

Promises made by builders in brochures or advertisements have to be fulfilled.

[Source: The order of the State Consumer Disputes Redressal Commission, Maharashtra, Mumbai, dated 15 March 2018 on Appeal no. A/15/179]

Did You Know

It is the Railway administration’s duty to provide adequate security to passengers and their property during a train journey. A Thane consumer court recently ordered the Konkan Railway Corporation to pay compensation of Rs. 1.65 lakh to a passenger for theft of his belongings.

National Insurance rapped for dodging claim


Shah Desai & Co. had insured its tobacco stock with National Insurance for Rs. 1.5 crore. The detailed address of the godown was not mentioned in the policy. A fire broke out in the firm’s godown damaging the stock. The surveyor assessed the loss at around Rs. 77 lakh. The insurer denied the claim saying that the location of the godown was not mentioned in the policy.

The firm filed a complaint before the Gujarat State Commission. The insurance company contended that the proposal form was incomplete as the detailed address had not been given. The Commission ruled in favour of the insurance company and dismissed the complaint. The tobacco firm appealed to the National Commission.


The National Commission observed that the addressed was ‘Post Office Menpura’ and so it would cover any location falling under the postal area. Hence, the detailed address was immaterial as long as the godown fell within Menpura. It also said that if the insurer was particular about the detailed address it should not have accepted the proposal.  It directed National Insurance to pay the claim amount as assessed by the surveyor.

Point of law

An insurer cannot find fault with an incomplete proposal after it issues a policy on its basis.

[Source: The order of the National Consumer Disputes Redressal Commission, New Delhi, dated 4 April 2018 on Appeal no. 169 of 2011]


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