Maharashtra RERA Directs Godrej Skyline Developers To Refund Full Booking Amount Paid By Homebuyer With Interest

Maharashtra Real Estate Regulatory Authority (Authority) bench comprising of Ravindra Deshpande (Member-II) directed Godrej Skyline Developers Pvt Ltd to fully refund the booking amount paid by the homebuyer with interest. The bench observed that the allotment letter contained coercive terms and that the booking amount did not fall under the definition of earnest money as per the application form. Background Facts Homebuyer (Complainant) purchased a residential flat in the builder's (Respondent) project named Forest Grove, located at Godrej Park Green and subsequently booked the flat for a total sale consideration of Rs. 42,66,775. Initially, the homebuyer paid a booking amount of Rs. 2,02,070 to the builder. However, due to financial difficulties and insecurity of income, the homebuyer decided to withdraw from the project. After discussing the situation with the builder's representative who verbally agreed to return the booking amount, the homebuyer sent an email to cancel the flat booking. The builder's representative replied to the email, accepting the cancellation request and sent the cancellation form. The form stated that the entire booking amount would be forfeited and did not mention about any terms related to refund. Therefore, the homebuyer did not sign the form and sent a legal notice to the builder seeking a refund of the booking amount. The builder's advocate responded to the notice, denying the refund request. Feeling aggrieved by the builder's conduct, the homebuyer filed a complaint before the authority seeking a refund of his booking amount with 24% interest and Rs. 50,000 as compensation for mental agony and physical stress. Contention of Builder The builder contended that they are entitled to forfeit 20% of the total consideration amount as earnest money as per the booking application form signed by the homebuyer. They argued that the documents, including the application form, allotment letter and cancellation letter validates the forfeiture. Observation and Direction by Authority By referring to clause (v) of the Allotment Letter, which stipulated that failure to return the signed allotment letter within 7 days would be deemed acceptance of the terms, the authority observed that this clause was coercive and thus rendered the contract invalid. The authority referred to the Supreme Court judgment in Pioneer Urban Land and Infrastructure Ltd. vs. Govind Raghavan (Civil Appeal No. 12238 of 2018), where it was observed that courts will not enforce an unreasonable and unfair contract when the contracting parties are not equal in bargaining power and where one party has no choice but to agree to the contract terms or sign on the dotted line in a prescribed or standard form. The authority noted that in the application form, the builder had defined the earnest money as 20% of the total sale consideration. Therefore, the amount of Rs. 2,02,070/- paid by the homebuyer as a booking amount does not amount to 20% and thus cannot be termed as earnest money. As a result, the authority directed the builder to fully refund the booking amount of Rs. 2,02,070/- to the homebuyer along with interest. Case – Ashok Babaji Sable Versus Godrej Skyline Developers Pvt Ltd Citation – Complaint No. CC005000000064485 Date – 13 Dec Click Here To Read/Download the Order

Maharashtra RERA Directs Godrej Skyline Developers To Refund Full Booking Amount Paid By Homebuyer With Interest

Aryan Raj

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