National Consumer Commission Holds Raheja Developers Limited for Deficiency in service

Brief facts:

The complainants, Satbir Singh residents of Gurugram, Haryana, had booked a residential plot (Plot No. E-85) in "Raheja Aranya City – Phase-2." The dispute arose when the complainants, invoking clause-8 of the memorandum of understanding, sought to cancel their booking within the stipulated timeframe. The clause provided a buy-back scheme with a guaranteed premium compensation of Rs.6350/- per square yard. The complainants, in a mail dated November 6, 2017, formally requested Raheja Developers Limited to cancel the plot, triggering a series of events leading to the legal dispute.

In response to the complainants' request, Raheja Developers Limited cited unfavorable market conditions and the application of the Real Estate (Regulation and Development) Act (RERA) as reasons for rejecting the buy-back proposal. They further expressed their inability to continue paying EMIs under the subvention scheme and requested the complainants to take over the loan and retain the allotted unit.

Raheja Developers Limited contended that the rejection of the buy-back proposal was a result of adverse market conditions that impacted the feasibility of the agreed-upon premium compensation. They argued that economic factors beyond their control necessitated a deviation from the buy-back scheme.

The developers asserted that the implementation of RERA regulations affected the terms of the agreement and their ability to execute the buy-back provision as outlined. They claimed that changes in regulatory requirements constrained their options and justified the denial of the complainants' request.

Raheja Developers Limited proposed transferring the outstanding loan to the complainants and requested them to take over the allotted unit. They argued that this proposal was a reasonable alternative to address the changed circumstances and was in accordance with the revised legal and regulatory framework.

Findings of the Commission:

While recognizing Raheja Developers Limited's assertion of unfavorable market conditions, the Commission emphasized that contractual agreements, once entered into, should be upheld. It questioned the validity of using market dynamics as a ground to deviate from agreed-upon terms, particularly when specific clauses addressing such circumstances were embedded in the contract.

The Commission took note of Raheja Developers Limited's argument regarding the impact of Real Estate (Regulation and Development) Act (RERA) compliance on the agreement. It observed that, regardless of regulatory changes, contractual obligations should be fulfilled, and any adjustment due to regulatory alterations should be within the boundaries of the law.

The Commission acknowledged Raheja Developers Limited's proposal of transferring the outstanding loan to the complainants as an alternative. However, it emphasized that such proposals must align with the rights and entitlements of the consumers as per the original agreement.

The Commission underscored the paramount importance of protecting consumer rights and ensuring that consumers are not unduly prejudiced by contractual breaches or changing circumstances. It reiterated the need for businesses to honor the commitments made in agreements with consumers.

The Commission, in its order, directed Raheja Developers Limited to refund the entire amount of Rs. 1,58,64,750/- to the complainants, along with 18% interest from the date of refusal on April 17, 2018, until the date of actual payment.