MahaRERA Directs Godrej Properties To Refund Senior Citizen Who Canceled Their Booking Within One Month

Background Facts

On 24.04.2017, Homebuyer (Complainant) booked a Suit flat in the builder's project named 'The Trees Origins' located in Kurla, Mumbai. The total sale price of the flat was ₹4,39,11,500/-, out of which an initial payment of ₹15,00,000/- was made by the homebuyer to builder.

On 08.05.2017, the homebuyer emailed the builder to cancel the booking and requested a refund of the booking amount, citing a family emergency as the reason for the cancellation. Despite this cancellation request builder sent a demand letter on 10.05.2017 to homebuyer.

The homebuyer repeated their cancellation request in a follow-up email on 12.05.2017 to which the builder responded saying they would discuss the matter further. However, instead of addressing the cancellation builder sent revised bank details for further payment.

On 31.05.2017, the builder stated in a letter that the ₹15,00,000/- paid by the homebuyer would be forfeited due to the cancellation of the booking.

The homebuyer contended that the builder did not consider their situation and unfairly retained the entire amount based on a one-sided clause in the application form. The homebuyer also mentioned that the builder suffered no loss due to cancellation as they sold the suit flat to a third party within a year for a higher price.

Due to these following reasons, Homebuyer filed complaint before authority seeking full refund of his paid amount along with appropriate interest.

Contentions of Godrej/Builder

The builder contends that the RERA, 2016 does not address issues related to the forfeiture of earnest money, as these matters fall under private contracts between the parties.

They mentioned that Section 19 of the RERA, 2016 focuses on the rights and duties of allottees but does not mention or prohibit the forfeiture of earnest money.

Based on these grounds, builder contended that the authority lacks the jurisdiction to handle or issue orders regarding matters not included in the RERA statutory framework.

Observation and Direction by Authority

The authority referred the Maharashtra Real Estate Appellate Tribunal's ruling in Dinesh Humane and others vs. Piramal Estate Pvt. Ltd. (appeal No. AT006000000041967 of 2019), where it was observed that a refund can only be demanded under Section 18 of RERA if the builder fails to deliver possession or complete the project on time. However, since RERA aims to protect consumer interests and therefore, any amount paid by the homebuyer should be refunded upon withdrawal from the project.

The authority held that although the relief for the homebuyer is not governed under Section 18 of RERA, 2016, the objective of the legislation is to safeguard the interests of homebuyers. Therefore, the homebuyer is entitled to a refund.

Furthermore, authority noted that the builder did not present any evidence showing a significant change in the market price of the flat or any liquidated damages that could justify retaining the amount paid by the homebuyer.

As a result, authority determined that the homebuyer is entitled to a refund of Rs. 15,00,000 without any interest.

Case – Kishore Shamji Chheda Versus Godrej Properties Limited

Citation – Complaint No. CC006000000193718

Date of order – 29.10.2024