NCDRC Directs Builder To Compensate Homebuyers For Delay In Refund Of Refundable Maintenance Deposit

The Bench comprising Justice SM Kantikar and Justice Binoy Kumar at the National Consumer Disputes Redressal Commission has ordered a refund of the refundable maintenance along with delay compensation @6% for the Flat Owners of Mantri Residency from Builders' agencies."...we are of the considered view that the Complainants are not only entitled for the refund of their refundable deposit amount but also a fair and reasonable compensation for the delay in paying back this amount", the NCDRC held. Background In the instant case, the Complainants were the owners of the respective residential flats in the Project developed by the Opposite Parties called 'Mantri Residency' in Bengaluru. On completion of the construction, the Opposite Parties ie, M/S Mantri Estate Management Private Ltd and Ors collected a lumpsum refundable maintenance deposit @INR 90 per square feet of the super built up area from each of the flat buyers. The Complainants averred that the Opposite Parties have also collected a non-refundable deposit worth @INR0.61 per sq ft from each flat owner. From time to time with each maintenance agreement starting from 2004, the refundable maintenance deposit was transferred to the agencies of the Opposite Parties. In an addendum in 2016 in the Agreement, the transfer of this deposit was made from M/S Mantri State Management Private Ltd to M/S Propcare Private Ltd. This maintenance contract was for a period of three years from 2016-2019 with the condition that upon termination of the contract, the refundable amount would be refunded to the Complainants. Accordingly, the contract was terminated in February 2017. The maintenance agency handed over the facility to Mantri Residency Apartment Owners Welfare Association. However, despite several reminders by the Complainants, the Opposite Parties failed to refund the amount. The Complainants claim that the Opposite Parties are guilty of restrictive trade policy under section 2(nnn)(b) of the Consumer Protection Act, 1986. The Complainants sought refund of the refundable maintenance deposit collected from each flat owner @INR 90 per sq. ft. along with 12% interest. They also prayed for the transfer of maintenance deposit collected from the flat buyers to the Association along with 12% interest, alternatively. Finally, they sought INR 10 lakh each for mental harassment. The Opposite Parties, meanwhile, averred that the Complainants were not 'consumers' within the meaning of the Act and cannot be heard under Section 12(1)(c). Further, they claimed that the terms and conditions of the allotment were adhered to and accordingly all flat buyers were handed possession in 2004 and thus the contract stood concluded between the parties. There was also no cause of action on the date of filing the complaint. Further, there were 117 complaints which form only 20.4% percent of the total of 337 flat owners whereas as per the Addendum Agreement, 67% of owners were to agree to terminate the contract. The Opposite Parties stated that the Complainants after taking possession of the flats without any pre-conditions were not 'consumers.' However, in the written agreement, the Opposite Parties had admitted that M/S Propcare has agreed to refund the said amount. They also contended that there was no deficiency in service and the complaints suffered on the grounds of limitation. Judgement The Bench observed that as per the last renewal agreement ie the Addendum Agreement between M/S Propcare and the Complainants which was valid for three years, it was clearly mentioned that the refundable maintenance deposit will be returned on the expiry or termination of agreement. In 2017, M/S Propcare handed over the Mantri Residency Assets to the Welfare Association for further maintenance. The Opposite Parties have admitted that the deposit was lying with them and ought to be returned and hence, the same must be complied with. As regards the question of delay compensation, the Bench concluded that the Complainants were entitled for the refund of their refundable deposit but also a fair and reasonable compensation for delay. Accordingly, refund along with delay compensation @6% from September 2017 till realisation was ordered. Any further delay would attract interest of 9% per annum. Case Title: SHIVAKUMAR KRISHNAMURTHY & ORS vs M/S. MANTRI ESTATE MANAGEMENT PVT. LTD. & ORS. Case No.: CONSUMER CASE NO. 163 OF 2020Click Here To Read/Download Order

NCDRC Directs Builder To Compensate Homebuyers For Delay In Refund Of Refundable Maintenance Deposit

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