Developers Can't Justify Missing Facilities With Other Available Amenities: Godrej Properties Ordered To Refund ₹75.24 Lakhs To Homebuyers

Brief facts

Nitin Sharma and Meenoo Sharma (complainants) bought a flat from Godrej Properties (opposite party), expecting it to be connected to a wide road leading to Dwarka Expressway, which was one of the key selling points. However, even after several years, the promised road connecting the units to the expressway wasn't built. Instead, there was only a narrow, crowded road that made access difficult. Feeling misled by the developer's false promises, they filed a complaint seeking a refund and compensation for the inconvenience caused.

ARGUMENTS OF GODREJ PROPERTIES PVT. LTD. (Opposite Party)

Godrej Properties stated that the complainants have made false allegations in order to avoid payment of last instalment as well as late payment interest. They contended that the complainants didn't even fall within the ambit of consumer as per Section 2(7)(i) of the Consumer Act while contending that the right of the parties has to be decided by terms of the contract and the consumer commission cannot rewrite a contract.

Further they said that it was the responsibility of the state government to construct the road, for which they had filed Writ Petition before the Punjab & Haryana High Court seeking direction to the government authorities to construct the road in question. They said that we have already constructed internal road for the sake of people residing there. Godrej Properties further argues that basic amenities, necessary for habitation were being provided and that they were supplying water through tankers till the regular water supply is obtained.

OBSERVATION OF THE COMMISSON

After hearing both the parties, the National Commission rejected the preliminary issue that the complainants were not “consumers”. It held that since the opposite party could not adduce evidence and show that the complainants were involved in the business of purchasing and selling flats, they were consumers only.

“Furthermore, this was a case involving an experienced developer who knew the nature of the representation which was being held out to the flat purchasers. Developers sell dreams to homebuyers.” It is embedded in their representations that the facilities which will be developed by the developer will provide convenience of living and a certain lifestyle. The flat purchasers cannot be left in the lurch or be told that the absence of facilities which were to be provided by the developer is compensated by other amenities which are available in the area. The developer must be held accountable to its representation.

Holding that there was shortcomings in fulfilling the obligations, the bench held Godrej Properties Pvt. Ltd. liable for deficiency in service. The Commission also referred to the case of Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, 2019 (6) SCALE 462 holding that “seeking refund does not amount to breach of contract on the part of the home buyer”. The Commission thereby directed Godrej Projects Development Pvt Ltd. (opposite party) to refund the amount of Rs. 75,24,953 to the complainants along with interest @ 9% per annum within two months.

Case title- Nitin Sharma and Ors v. Godrej Properties Development Pvt. Ltd. And ors.

Advocates for complainants- Mr. Aditya Parolia, Ms. Sumbul Ismail, Ms. Pranjal Mishra, Ms. Anvita Priyadarshi Advocates

Advocates for opposite parties- Mr. Sudhir Makkar Sr. Adocate, Mr. Kapil Madan, Mr. Akshit Narula, Mr. Amit K, Ms. Aadhya Advocates

Consumer Complaint No.- 873 of 2019