Forfeiture Amount Can't Be Unreasonable: Haryana RERA Directs Builder To Refund Balance Paid Up Amount To Buyer Who Defaulted In Payment
Aiman J. Chishti
24 Jan 2024 7:53 AM GMT
The Haryana Real Estate Regulatory Authority (HRERA) has directed a Gurugram-based builder to refund the paid up amount to a homebuyer who defaulted in making timely payments, after forfeiting the predetermined earnest money.
A three member bench of Members Sanjeev Kumar Arora, Ashok Sangwan, Vijay Kumar Goyal said that while cancelling the fat buyer's unit on account of default, it was an obligation of M/s Martial Buildcon Private Limited to return the paid up amount after forfeiting the amount of earnest money.
The Authority relied on Maula Bux v. Union of lndia (1970) and Sirdar KB. Ram Chandra Raj Urs. VS. Sarah C. Urs. (2015), wherein it was held that "forfeiture of the amount in case of breach of contract must be reasonable and if forfeiture is in the nature of penalty, then provisions of Section 74 of Contract Act 1872 are attached and the parry so forfeiting must prove actual damages."
After cancellation of allotment, the unit remains with the builder as such there is hardly any actual damage.
As per the agreement to sell, the builder had a right to cancel the unit in case the allottees breached the agreement to sell.
Complainant-buyer submitted that the agreement to sell did not state any specific date for possession and the respondent-builder verbally assured that the possession of the unit would be offered in and around May 2020 and when the same was not adhered to, the complainant sent multiple communications to the respondent seeking possession to no avail and despite the same the complainants made a total payment of Rs 52,07,764/- to the respondent and since no possession was offered the complainants did not make any further payments.
After considering the submissions, the Authority found that the complainant failed to abide by the terms of the agreement executed inter-se parties by defaulting in making payments in a time bound manner as per payment schedule.
The bench noted that accordingly, the respondent after giving reminder and pre-cancellation letter, cancelled the unit of the complainant. However, it noted that the deductions made from the paid up amount was not as per the Iaw of the land.
Thus, it directed the respondent to refund the paid-up amount of the complainant i.e. Rs.52,07,764 after deducting 10 per cent of the sale consideration being earnest money along with interest under rule 15 of the Haryana Real Estate (Regulation and Development Rules 2017) from the date of termination till realisation.
Appearance: Advocate Aditya for complainant.
Advocate Garvit Gupta for respondent.
Case Title: Shashi Saha v. M/s Martial Buildcon Private Limited.
