Builder Can Only Forfeit 10% of Basic Sale Price In Case Of Breach Of Contract: NCDRC
The National Consumer Disputes Redressal Commission, presided by Dr. Sadhna Shanker, held that the amount forfeited due to a breach of contract should be fair and justifiable. In the instant case, the commission ruled that the builder can only forfeit 10% of the deposited amount and has to refund the remaining balance to the buyer. Brief Facts of the Case The complainant booked...
The National Consumer Disputes Redressal Commission, presided by Dr. Sadhna Shanker, held that the amount forfeited due to a breach of contract should be fair and justifiable. In the instant case, the commission ruled that the builder can only forfeit 10% of the deposited amount and has to refund the remaining balance to the buyer.
Brief Facts of the Case
The complainant booked a flat in the scheme 'TAJ HEIGHTS' by Maliha Realtor/realtor for a total consideration of Rs. 34,14,000 and initially paid Rs.11,501. Subsequently, payments of Rs.3,17,250 and Rs.7,93,125 were made, respectively. It is claimed that possession of the flat was to be provided within two years, which the realtor allegedly failed to do. The complainant asserted having paid a total of Rs.11,21,876 but received only Rs.7,20,000 as a refund from the realtor, prompting the complaint of deficiency in service filed before the State Commission of Delhi. The State Commission dismissed the complaint and directed the complainant to pay Rs. 5000 to the realtor as the cost of the proceeding. Aggrieved by the State Commission's order, the complainant appealed to the National Commission.
Contentions of the Realtor
The realtor contested the complaint by claiming that the complainant had already received Rs. 5 lakh through two cheques. Additionally, it was alleged that the complainant received Rs. 2,20,000 via another cheque. The realtor further argued that the complaint was time-barred, asserting there was no deficiency in their service, and therefore requested dismissal of the complaint.
Observations by the National Commission
The National Commission observed that the complainant applied for a refund, and the realtor refunded Rs. 7,20,000 within a two-year period before the complaint was filed in 2016. Regarding forfeiture, the commission cited precedents like Maula Bux Vs. Union of India, (1970) and Sirdar K.B. Ram Chandra Raj Urs Vs. Sarah C. Urs (2015) emphasizing that forfeiture must be reasonable, proportional to actual damages, and not punitive.
The Commission allowed the appeal and directed the realtor to forfeit only 10% of the deposited amount, ordering a refund of Rs. 2,89,689 with 9% interest per annum, overturning the State Commission's previous ruling.
Case Title: Mohd. Naiem Khan Vs. M/S. Maliha Realtor Pvt. Ltd
Case Number: F.A. No. 621/2020