Background

The Homebuyers had executed an Agreement for Sale with the Developer for purchase of an apartment along with a servant quarter and car parking space at 'Ideal Enclave'. Despite payment of a substantial portion of the sale consideration, the Developer failed to deliver physical possession within the stipulated timeline and the balance consideration remained unpaid. The Developer thereafter cancelled the booking and declined the Complainants' request for either possession or refund, leading to the institution of the consumer complaint.

The Developer contended that the Complainants had defaulted in making payments despite repeated reminders. It further submitted that the Completion Certificate for the project had been obtained on 31.03.2014 and, therefore, there was no deficiency in service and the cancellation of the allotment was justified.

Observations

The Commission observed that under the Agreement, the Developer was required to complete and hand over possession by 30.12.2012. However, the Notice of Possession was issued only on 26.05.2014, more than one and a half years after the promised date.

The Commission further noted that Clause 11.1 of the Agreement obligated the Developer to refund the amount received from the homebuyers within three months of cancellation after deducting 10% as liquidated damages. However, there was no material on record to show that the Developer had discharged this contractual obligation.

While observing that the Complainants had failed to pay the remaining balance consideration despite receiving the possession notice and had remained inactive for a considerable period, the Commission held that the Developer's failure to refund the amount after cancelling the allotment constituted an unfair trade practice.

Accordingly, the Commission held that the Complainants were entitled to a refund after deduction of 10% of the amount paid by them under Clause 11.1 of the Agreement. Since the Complainants had paid Rs.36,11,270/-, and 10% thereof amounted to Rs.3,61,127/-, the Commission directed the Developer to refund Rs.32,50,143/- along with simple interest at 8% per annum from the date of issuance of the cancellation notice, i.e., 05.07.2019.

The Commission directed that the amount be paid within 60 days from the date of the order, failing which it would carry simple interest at the enhanced rate of 12% per annum until realization. The Developer was also directed to pay litigation costs of Rs.15,000/-.

Case Details

Case Title: Bikash Agarwal & Ors. v. M/s Ideal Real Estate Private Limited

Case No.: DC/315/CC/84/2023

Counsel for the Homebuyers/Complainants: Ms. Paramita Banerjee and Mr. Sayan Dey, Advocates (MCO Legals – Meharia & Company)

Counsel for the Developer: Ms. Soni Ojha, Advocate (Sinha & Company)