Tamil Nadu RERA Directs Alliance Group To Refund Money Deducted As Cancellation Fee To Homebuyer

Tamil Nadu Real Estate Regulatory Authority Bench, comprising Dr. L. Subramanian (Member) and Adv. M. Krishnamoorthy (Member) directed Alliance Group to refund Rs. 50,000 to the homebuyer. The amount was deducted as a cancellation fee for a flat after the homebuyer cancelled the booking when the possession date was shifted from 2018 to 2020. Background Facts Homebuyer (Complainant) purchased a flat in the builder's (Respondent) project named “Augustus Alliance Galleria” located in Pallavaram. The flat was priced at Rs. 42,17,100. The homebuyer paid Rs. 10,000 as booking advance on 21.03.2018 and a further sum of Rs.2,40,000 in March 2018. When the builder provided the draft sale and construction agreements, it was stated that Chennai Metropolitan Development Authority (CMDA) revised approval plan was still pending. The homebuyer sought clarifications but did not receive clear answers. On 03.05.2018, the builder replied that the homebuyer's queries had been sent to the concerned team. The possession date which was first promised as December 2018 was later shifted to July 2020 causing more objections. On 18.05.2018, the homebuyer cancelled the booking and requested a refund. The builder returned Rs.2,00,000 but kept Rs. 50,000 as cancellation charges even though the flat was never built. Homebuyer feeling aggrieved, filed this complaint seeking a refund of Rs. 50,000 with 24% interest per annum and costs. Contentions of Builder The builder contended that Clause 5 of the booking form allowed them to deduct Rs. 50,000 as cancellation charges and refund the rest. On this basis, the builder said the complaint should be dismissed. Observation and Direction by Authority Authority observed that the homebuyer's emails showed repeated requests for clarifications and her decision to cancel when the possession date was shifted from December 2018 to July 2020. The builder's replies were delayed and vague and the promised adjustments for payments were not made. Authority also observed that it was not lawful to retain Rs. 50,000 as cancellation charges since the homebuyer was forced to cancel due to the change in the possession date. Authority referred to Section 18(1) of the Real Estate Regulation and Development Act 2016, which states: 18. Return of amount and compensation. (1) If the builder fails to complete or is unable to give possession of an apartment, plot, or building— (a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or (b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the homebuyers, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act: Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the builder, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed. As a result, the Authority held that the builder shall refund Rs. 50,000 which was withheld as cancellation charges along with the specified interest and Rs. 25,000 as costs to the homebuyer within 90 days from the date of the order. Case – K.S. Aruna Vasumathi Versus M/s. Alliance Group Citation - RCP No. 62 of 2023 Click Here To Read/Download The Order

Tamil Nadu RERA Directs Alliance Group To Refund Money Deducted As Cancellation Fee To Homebuyer

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Tamil Nadu RERA Directs Alliance Group To Refund Money Deducted As Cancellation Fee To Homebuyer

Aryan Raj

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