Inability To Pay Full Amount, Developer Can Only Forfeit Booking Amount, Not Entire Amount Paid: Rewari District Commission

Brief Facts:

The Complainants deposited a booking amount of Rs. 7,000/- each with the Manager/General Manager, Jan Awas Project. They booked one flat each for Rs. 9,70,000/-. Subsequently, after the flats were allotted to them, they deposited 10% of the total amount, i.e., Rs. 97,000/- each. The Complainants argued that despite repeatedly escalating the issue with the manager, they were unable to take possession of the flats due to construction delays caused by the COVID-19 pandemic. They further alleged that the manager cancelled the allotment and did not refund their deposited amount of Rs. 1,04,000/- each. Feeling aggrieved, the Complainants approached the District Consumer Disputes Redressal Commission, Rewari, Haryana (“District Commission”) and filed a consumer complaint against the manager.

The manager contended that he issued several demand notices to the Complainants on 15th October 2019, 6th December 2019, and 5th March 2020, requesting payment of the outstanding amount. However, despite these notices, the Complainants failed to deposit the said amount. Consequently, cancellation letters were sent to the Complainants via registered post which resulted in the cancellation of the allotment of the flats.

Observations by the District Commission:

The District Commission noted that there was no Builder-Buyer Agreement between the parties, let alone its registration. The District Commission referred to the notification of the Government of Rajasthan's Urban Development Department under the Real Estate (Regulation and Development) Act, 2016. Under Section 7.5, titled "Cancellation by Allottee," the District Commission noted that the allottee(s) retain the right to cancel or withdraw their allotment in the project. The provision stated that if the allottee proposes to cancel or withdraw without any fault on the part of the promoter, the promoter is entitled to forfeit the booking amount but must return the balance within 45 days.

Therefore, the District Commission held that where an allottee wishes to withdraw without any fault of the promoter, only the booking amount can be forfeited, with the remaining sum to be returned within the stipulated period. It noted that the manager forfeited the entire amount deposited by the Complainants. As per the legal provisions, only the booking amount of Rs. 7,000/- each should have been forfeited, with the remainder returned to the Complainants.

Consequently, the District Commission directed the manager to refund Rs. 97,000/- each to the Complainants along with interest at 9% per annum. Additionally, he was directed to pay a compensation of Rs. 25,000/- each to the Complainants for mental agony and harassment, as well as Rs. 11,000/- each as litigation expenses incurred by them.

Case Title: Ram Rati vs Manager / General Manager, Jan Awas Project and Connected matter

Case Number: Consumer Complaint No: 127 of 2023

Date of Decision: 24.05.2024