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Flat owners can file joint complaint for delays in handovers

Khaleej Times logo Khaleej Times 19/03/2017 H.P. Ranina
Flat owners can file joint complaint for delays in handovers © Provided by Khaleej Times Flat owners can file joint complaint for delays in handovers

Q: I have been a flat owner in India for several years. Recently, I purchased another property by entering into an agreement with a builder who has delayed giving possession. About 20 to 25 prospective buyers are planning to file a petition with the Consumer Court for redressal. The value of flats ranges from Rs6.5 million to Rs9 million. Can we move the court on a joint petition which would save legal costs?

- P.R. Naidu, Dubai

A: Under the Consumer Protection Act, a prospective buyer can approach the National Consumer Disputes Redressal Commission (NCDRC) only where the value of a flat or apartment is more than Rs10 million. If the value of a flat is less than Rs10 million, the owner has to approach the District Consumer Forum. From the District Consumer Forum, the appeal would go to the State Consumer Forum, and, thereafter, to the NCDRC. This would be extremely time-consuming.

Fortunately, the Supreme Court of India has recently held that if flat owners come together and the value of all the properties owned by them exceeds Rs10 million, they can jointly approach the NCDRC. This would enable flat owners to pool in their resources and reduce their individual legal costs by directly approaching the NCDRC. It would also reduce the time involved.

Q: My wife who has been working in India for several years will retire by the end of 2018. She will be entitled to a substantial amount of gratuity in view of long years of service. I want to know what amount will be exempt from tax. I am getting conflicting advice.

- R.D. Lodha, Bahrain

A: At present, the tax-free limit for gratuity is Rs1 million. For government employees, it is Rs2 million. However, a bill is now proposed to be introduced in parliament to increase this limit to Rs2 million for private sector employees. Therefore, by the time your wife retires next year, she may be entitled to tax-free gratuity of Rs2 million.

However, this upper limit only applies where the gratuity payment exceeds this figure. For each employee who retires, gratuity is calculated by taking into account average salary of the last 10 months and the multiple of 15/26 is applied to the number of years of service. Generally, this means that the gratuity amount is a half month's salary for each completed year of service. Salary for this purpose means the basic pay plus dearness allowance, and excludes other allowances.

Q: The Indian government wants to promote digital transactions. Is the banking system geared for this and what steps are being taken to address problems of persons who are not computer literate?

- T.S. Goswami, Doha

A: Currently, 65 per cent of bank accounts have the facility of Internet banking. By next month, all savings bank accounts in India are to be automatically Internet-enabled. Bank account holders are also being given RuPay Cards. Once the point of sale terminals are installed by merchants and shopkeepers, the use of the RuPay debit card will become the mode for transactions in all Indian cities. Cash will be used only in towns and villages where banking facilities are yet to be set up.

Further, the new app, Bharat Interface for Money, has been downloaded by almost 20 million users. This app, which is linked with the Aadhaar card, will enable the common man to make digital transactions. His fingerprint will be scanned to complete a transaction with a merchant. Therefore, even those who are not computer-literate will be able to make digital transactions.

The writer is a practising lawyer specialising in tax and exchange management laws of India. Views expressed are his own and do not reflect the newspaper's policies.

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