The National Consumer Disputes Redressal Commission (NCDRC) in a recent judgment has ordered real estate major Supertech to refund the entire amount of over Rs 1 crore to a homebuyer for delay of two years in delivering the house.
The order was passed by a Bench of Justice V.K. Jain on holding that a homebuyer cannot be forced to forfeit any amount deposited with a builder in case he seeks cancellation of allotment of flat for delay in construction.
While hearing an appeal, the Bench observed that in order to discourage homebuyers from cancelling allotment, builders always put stringent clauses in the agreement on forfeiture of a substantial amount deposited by buyers.
To this, the apex consumer commission held that real estate companies cannot invoke such harsh clauses in cases where the buyers are forced to seek cancellation due to inordinate delay in completion of any project.
Thus, it restrained Supertech from forfeiting 15% of the cost of the unit as cancellation charges after a buyer sought refund of money as the company failed to deliver the house in its Noida housing project by December 2016 as per the agreement.
The order was passed in favour of complainant Chandan Gupta, who had booked a residential flat with Supertech’s project ‘ORB Towers’ in Sector 74 of Noida for a consideration of Rs 2.36 crore.
As per the agreement, the flat was to be delivered to him by June 2016 or latest by December 2016 after including the grace period of six months. However, due to delay in handing over the possession within the stipulated period, Mr. Gupta sought cancellation of allotment and approached the commission after the developer refused to refund Rs 1.08 crore which he had deposited so far. As the commission directed that the amount be refunded to the buyer, the developer contended that it was entitled to forfeit 15% of the cost of the unit as cancellation charges as per clause 37 of the agreement between the parties.
The commission, however, rejected its claim saying there was no merit in the contention. “In my opinion, the aforesaid clause would apply to a case where the allottee, for his own reasons, seeks cancellation of the allotment and does not apply to a case where he is forced to seek cancellation of the allotment and refund of the amount paid by him to the developer on account of failure of the developer to deliver possession of the house within the time period committed. Had the complainant sought cancellation of the allotment before December 2016, by which the possession was to be delivered to him even after giving benefit of the grace period to the builder, there could have been some merit in the contention. But, he having filed the complaint after expiry of the aforesaid time-line, clause 37 of the agreement would have no application,” it said.
Accordingly, the commission directed Supertech Ltd to refund the buyer within three months the entire principal amount of Rs 1.08 crore along with compensation in the form of simple interest at 10% per annum from the date of each payment till the date of refund.
