Homebuyer Paid Booking Price On Spot Without Reading Terms Of Document, Karnataka RERA Orders Full Refund

Background Fact

Homebuyers were interested in purchasing a flat, so they visited Shriram Properties (Builder) to inquire about a 3.5-bedroom flat located at Jalahalli. During their visit, they were shown the model house and the plan of the 3.5-bedroom house by the sales executive.

After presenting the model, the sales executive asserted that it was the last day of a special offer with an 80:10:10 payment plan. Despite the homebuyers intention to discuss the flat model with their family members, the sales executive pressured them to pay a booking amount of Rs. 1,00,000 on the spot, divided into two transactions of Rs. 50,000 each for booking two flats.

Subsequently, the sales executive handed over the documents to the homebuyers for signature without providing them sufficient time to go through the terms. The sales executive verbally assured them of positive terms, but after signing, the homebuyers found that the document included terms for the forfeiture of the booking amount upon cancellation.

Furthermore, the homebuyers realized that the commitment was impractical and notified the builder, sending three emails requesting cancellation and a refund of the booking amount. However, the builder denied any possibility of refunding the booking amount of Rs. 1,00,000 Aggrieved by the builder's denial, the homebuyers filed a complaint before Karnataka RERA seeking a full refund of the booking amount.

Contention of the Builder

The builder argued that the homebuyers had booked two units by signing a booking form containing terms and conditions. They had agreed to a condition stipulating that if they voluntarily cancelled the booking without any fault on the builder's part, the booking amount they paid could be forfeited. Therefore, according to the builder, they are not obligated to refund the booking amount.

RERA Order

KRERA directed the builder to refund the entire booking amount paid by the homebuyer to secure the booking of two units of flats and held that the refund would not cause financial loss to the builder, as they would earn the same amount when another person books the flat after the cancellation of the homebuyer's booking.

Further, KRERA held that in many cases, builders are deducting 10% of the booking amount and refunding the amount to the homebuyers without interest. However, in this case, the builder has already enjoyed 1 year of interest on the amount. Thus, the homebuyer is entitled to a full refund of the booking amount.

Case : MN Anudeep and Madhura MS Nilayam Vs Suvilas Realities Private Ltd.

Citation: Complaint No. 00949 / 2023

Counsel for Homebuyer: In Person

Counsel for Builder : Mr. Joseph Antony & Others

Click here to read / download order