HRERA Affirms Allottee's Right To Refund In Case Of Delayed Possession, Orders Manglam Multiplex To Refund Earnest Money To Buyers

Brief Facts:

Shashi Saha and Nilendu Indu Saha (“Complainants”) booked a specific unit on the 21st floor of Tower 6, of M3M Heights with a super area of 1433 sq. ft. The allotment was confirmed by Manglam Multiplex Pvt. Ltd. (“Promoter/Builder”) through an allotment letter, followed by the execution of a builder-buyer agreement, stating a total sale consideration of Rs.1,69,41,698/-. The Complainants paid Rs. 75,51,467/- towards the total amount. Subsequently, a tripartite agreement was entered between the Complainants and ICICI Bank Limited for a loan of Rs. 1,15,00,000/- to finance the purchase.

Later, the Complainants took formal steps to cancel the booking by issuing a notice dated to the builder, formally communicating the cancellation of the booked unit under Clause 7.9 of the buyer's agreement. Alongside the cancellation, the Complainants requested the builder to provide details regarding deductions and to initiate the refund process for the amount deposited after deductibles. However, the builder did not acknowledge this notice. In subsequent attempts to resolve the matter, the Complainants sent additional notices, followed by multiple emails seeking a refund. Despite these efforts, the Complainants didn't receive any satisfactory reply. Faced with the lack of resolution, the Complainants approached the Haryana Real Estate Regulatory Authority (“HARERA”) and filed a complaint against the builder.

The builder, in response, contested the complaint on several grounds. They claimed that the Complainants approached them for the booking of a residential unit in the "M3M Heights" project, and an apartment was allotted based on the booking amount and compliance with the terms. The builder further contended that the Complainants were chronic defaulters, failing to adhere to the payment plan and receiving reminders from it. Despite executing a tripartite agreement with ICICI Bank Limited and a builder-buyer agreement, the Complainants allegedly continued to default on payments. Reminder letters were issued on multiple occasions to the Complainants, thereafter, the builder argued that it cancelled the unit's allotment under the buyer's agreement. The builder maintained that the cancellation and forfeiture of earnest money were justified due to the Complainants' default in the payment.

Observations by the Commission:

HARERA noted that the builder didn't present any evidence to suggest that the Complainants were chronic defaulters. It noted that the Complainants had paid a substantial amount of Rs. 75,51,467/- against the total sale consideration of Rs. 1,69,47,698/- as per the construction-linked payment plan. HARERA further observed that the Complainants had cleared all their instalments before requesting the cancellation, and there was no evidence of default in the instant case. Therefore, the objection raised by the builder concerning payment delays was rejected.

Moving on to the relief sought by the Complainants, HARERA addressed the issue of directing the builder to refund the paid-up amount along with interest. It noted that the Complainants, through letters and notices, requested the builder to cancel the allotment and refund the amount, but the builder, despite refunding the amount, subsequently cancelled the allotment and forfeited the paid amount. Referring to the possession clause in the agreement, HARERA noted that the clause heavily favoured the promoter and could be misused to evade liability for timely delivery. Considering the significant delay in the construction of the project, it held that the Complainants cannot be expected to wait indefinitely for possession, especially when the occupation certificate/completion certificate had not been obtained by the promoter. Referring to the decision of the Supreme Court in Newtech Promoters and Developers Private Limited Vs State of U.P. and Ors. [2021-2022(1) RCR (c) 357], HARERA held that the allottee has an unequivocal and absolute right to seek a refund if the promoter fails to deliver possession within the stipulated time, regardless of unforeseen events or court orders not attributable to the allottee. Therefore, it held the builder liable for cancellation of the allotment done by the builder after the Complainants approached it.

Taking into account the lack of possession, HARERA directed the builder to refund the paid-up amount of Rs. 75,51,467/- after deducting 10% of the basic sale consideration of Rs. 1,51,26,514/-. The interest was calculated at the rate of 10.75% per annum from the date of withdrawal (04.10.2021) until the actual refund, following the Haryana Real Estate (Regulation and Development) Rules, 2017.

Case Title: Shashi Saha and Another vs Manglam Multiplex Private Limited

Case No.: CC 1106 of 2022

Advocate for the Complainant: Anshul Gupta

Advocate for the Respondent: Shriya Takkar

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