Maharashtra State Commission Directs Lodha Developers To Refund ₹2.83 Crore With Interest For Possession Delay, Unfair Trade Practice

The State Consumer Disputes Redressal Commission, Maharashtra, Mumbai comprising Poonam V. Maharshi (Presiding Member) and Mrs. Dr. Nisha Amol Chavhan (Member) held Lodha Developers Ltd liable for deficiency in service for failure to deliver possession and for demanding charges not specified in the initial agreement. The Commission partly allowed the complaint and held that retaining the complainants' money without fulfilling contractual obligations amounted to a breach of trust, causing wrongful gain to the builders and undue hardship to the complainants. Brief FactsThe complainants, Uttam Chatterjee and Anindita Chatterjee, booked a 3-BHK flat in “World Crest” of Lodha Developers Ltd. (OP No. 2) in 2015 for a base consideration of approximately Rs. 12.22 crores, using their retirement provident funds. The complainants booked the flat under a special “20:80” scheme offered during Akshay Tritiya, under which they planned to pay the remaining 80% by selling their existing properties. Under this arrangement, the complainants were to take possession only after being given due notice and an opportunity to sell their existing flats. Although possession was orally promised for December 2015, the allotment letter did not mention any possession date, and the builders failed to deliver, subsequently extending the timeline to March 2016. The complainants decided to exit the project due to the delay in possession and their daughter's upcoming marriage in early 2016. However, the builder's representative persuaded them to shift to a more premium 4-BHK flat with three garages in the “Marquise” building under “The Park” project. The flat was represented to cost around Rs. 8 crores (not exceeding Rs. 10 crores inclusive of all charges), with possession verbally promised by May/June 2018.On 28-03-2016, the complainants met with the representatives of OP No. 2 to discuss shifting their booking from the first flat to the second flat, though no formal written proposal was provided thereafter. It was agreed that the amount of approximately Rs. 2.52 crores already paid would be transferred to the second flat, with an additional Rs. 1.5 crores to be paid over a period of 1.5 years, and the remaining balance payable at the time of possession.However, in October 2016, the builders abruptly informed the complainants that the actual price of the new flat was Rs. 12 crores and demanded an immediate payment of Rs. 2 crores. Shocked by this sudden price increase , the complainants expressed their intention to withdraw from the project through an email dated 06-10-2016. In response, the builders imposed a 10% cancellation fee, resulting in a forfeiture of approximately Rs. 1.2 crores. Despite the complainants having paid a total sum of Rs. 2,83,59,554, the builders ultimately terminated the booking without handing over possession of any flat or refunding the amount paid.Aggrieved by the failure of the opposite parties to deliver possession and the imposition of arbitrary terms, the complainants approached the State Consumer Disputes Redressal Commission, Maharashtra, Mumbai, seeking a full refund and compensation on the grounds of deficiency in service.Contention of the Opposite PartiesThe Opposite Parties contended that the complaint was an abuse of process and that the termination of the agreement along with forfeiture of 10% of the consideration amount was legally justified due to the complainants' failure to adhere to payment schedules. They further argued that the complaint was barred by limitation, as the cause of action arose on 20-05-2018, while the complaint was filed on 27-12-2021 without seeking condonation of delay. It was also submitted that the Commission lacked pecuniary jurisdiction to entertain the complaint. The opponents claimed that the complainants were not “consumers” under the Act, asserting that the purchase was made purely for investment purposes.Observations & DecisionThe State Consumer Disputes Redressal Commission held that the complainants qualified as “consumers” under the Act. It noted that the flat was purchased for personal use and not for any commercial or profit-making purpose. The Commission observed that the complaint had been filed on 27-12-2021, whereas the revised financial limits came into force on 30-12-2021. It further observed that the earlier pecuniary jurisdiction, covering cases valued between Rs. 1 crore and Rs. 10 crores, would apply, and since the complainants had paid over Rs. 2 crores, the matter was maintainable, notwithstanding the revised jurisdiction of Rs. 50 lakhs to Rs. 2 crores.. The Commission held the opposite parties guilty of deficiency in service and unfair trade practice, noting that the failure to deliver possession within the stipulated time constituted a fundamental breach of the agreement. It further held that unilateral termination of the allotment and forfeiture of amounts were unjustified. Accordingly, the Commission partly allowed the complaint and directed...

Maharashtra State Commission Directs Lodha Developers To Refund ₹2.83 Crore With Interest For Possession Delay, Unfair Trade Practice

Muhammed Razik

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