Homebuyers Who Default In Payments Cannot Challenge Allotment Cancellation As Unfair Trade Practice; Entitled Only To Refund With Interest: NCDRC
The National Consumer Disputes Redressal Commission (NCDRC), comprising Justice A.P. Sahi, President, and Bharatkumar Pandya, Member, held that homebuyers who default in making payments cannot challenge cancellation of allotment as an unfair trade practice. Finding that the complainants had failed to adhere to the agreed payment schedule, the Commission declined to restore the allotments but directed the builder to refund the entire deposited amount along with interest at 9% per annum.
Brief facts
The complainants, Neeraj Chaudhary and Monia Chaudhary, booked two residential apartments in the "Ourania" project being developed by M/s Neelkanth Township Planner Pvt. Ltd. at Golf Course Road, Gurgaon. They alleged that although they had made payments towards the flats and had secured housing finance from LIC Housing Finance Ltd., the developer continued to raise demands despite the construction not progressing in accordance with the agreed schedule. According to the complainants, they had cleared all outstanding dues, yet the developer cancelled the allotments through letters dated 12.06.2012.
Alleging that the cancellation was arbitrary, fraudulent and amounted to deficiency in service and unfair trade practice, the complainants approached the National Consumer Disputes Redressal Commission (NCDRC) seeking a declaration that the cancellation letters were illegal and not binding, along with compensation.
The developer contested the complaint, contending that the complainants had defaulted in making payments under the Construction Linked Plan and had paid only a fraction of the total sale consideration. It was argued that the allotments were validly cancelled in accordance with the terms of the Apartment Buyer's Agreement due to persistent payment defaults. The developer further submitted that the units were subsequently sold to third parties and that there was neither any injunction nor any restraint order against such transactions during the pendency of the proceedings.
Observations and Decision
The NCDRC observed that the complainants had defaulted in making payments under the Apartment Buyer's Agreement and the Construction Linked Plan. Therefore, the developer's decision to cancel the allotments could not be termed an unfair trade practice. The Commission further noted that the complainants had neither obtained any injunction against the cancellation nor sought any restraint against the subsequent sale of the flats to third parties during the pendency of the proceedings.
The Commission held that, in the facts of the case, the complainants could not claim restoration of the allotments as a matter of right. It further observed that the claim for compensation equivalent to double the basic sale price was misconceived and that refund of the amount deposited was the only relief that could appropriately be granted.
Accordingly, the Commission declined to set aside the cancellation but partly allowed the complaint by directing the developer to refund the entire amount deposited by the complainants along with interest at the rate of 9% per annum from the respective dates of deposit until actual payment.
Case No.: NC/CC/184/2015
Case Title: Neeraj Chaudhary & Anr. v. M/s Neelkanth Township Planner Pvt. Ltd. & Anr.