Right To Reserve Flat Includes Right To Withdraw, Can't Ask Allottee To Forfeit Payment : Maharashtra RERA Appellate Tribunal

In an order that may provide relief to several flat allottees, the Maharashtra Real Estate Appellate Tribunal (MahaRERA) observed that the right to reserve a flat includes the right to cancel the reservation. Therefore, a builder cannot ask an allottee to forfeit the booking amount for withdrawing his reservation. The panel observed a clause in the reservation form disallowing a prospective flat purchaser to withdraw from the arrangement; asking him to forfeit 10% of the flat's value or the amount paid is ex-facie unreasonable, unfair and inequitable. "The existence of such a condition in the printed form of "request for reservation" by allottee is against the object and purpose of RERA... and not binding on the parties." The panel of member Sumant Kolhe (judicial) and member SS Sandhu directed Piramal Estate Pvt Ltd to return Rs. 5,61,967 to Kalwa couple Dinesh and Ranjana Humane, who cancelled their Thane flat reservation due to a medical emergency in the family. Advocate Sunil Kevalramni represented the allottees. The tribunal observed that a promoter could not take undue advantage of a one-sided clause. "In the instant case, while applying for the flat, allottees had no choice but to sign the printed form of request prepared one-sided by the petitioner." The parties hadn't entered into a sale agreement, nor was a confirmation or allotment letter issued, the bench observed. It noted that the condition of forfeiture was only for the purchaser and not the promoted. "The only document signed by allottees is the printed form which is styled as "request for reservation". So, at the time of making the"request for reservation" of the flat on the part of Allottees, Promoter obtained the signatures of Allottees on such form of request which consists of 33 different terms and conditions to be observed and complied by Allottees only." "As per clause 17, Allottees have no right to withdraw their request for reservation. This is absolutely unfair and unreasonable and a one-sided condition imposed on the Allottees. Allottees cannot be restrained from exercising their right of withdrawing the request. Right to make request for reservation of flat includes the right to withdraw such request for reservation of flat." An unreasonable and unfair transaction cannot be enforced The panel relied on the apex court judgement in the case of Pioneer Urban Land and infrastructure Vs Govindan Raghavan "signifying that court will not enforce an unreasonable, unfair contract or an unreasonable and unfair clause in a contract where contracting parties are not equal in bargaining power and where a man has no choice or rather a meaningful choice but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form... as a part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rule maybe." The Case The Allottees had approached the appellate tribunal dissatisfied with the MahaRERA inquiry and order directing the promoter to refund the booking amount to allottees "in accordance with booking form signed by both the parties." Arguments Advocate Abir Patel, Piramal's counsel, argued that allottees could not cancel the booking on personal grounds for claiming a refund. He said that the allottees had claimed relief based on clause 18 of the model agreement" for sale given under RERA rules, but there is no violation of RERA's provisions. According to him, a complaint under Section 31 of RERA was not maintainable unless there was a violation. He argued that the forfeiture clause is part of the "model agreement" under RERA rules and not against its spirit. The panel said that the allottee's case would not fall under clause 18 of a model agreement, as they cancelled the transaction at the initial stage. Notably, the parties didn't execute the sale agreement, the panel said. It added that the object of RERA was to protect consumers. "In this peculiar matter, though the claim of refund is not governed by any specific provision of RERA, it cannot be ignored that object of RERA is to protect interest of consumer. So, whatever amount is paid by home-buyer to the promoter should be refunded to the allottee on his withdrawal from the project." ( Dinesh R. Humane vs Piramal Estate Private Ltd)Click Hear To Download/Read Judgment

Right To Reserve Flat Includes Right To Withdraw, Can't Ask Allottee To Forfeit Payment : Maharashtra RERA Appellate Tribunal

Sharmeen Hakim

One-sided unfair terms in the agreement cannot be enforced against the buyer, the tribunal.

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