Home buyers won39;t lose money for cancelling delayed flats: NCDRC
Publish on : 2019-06-19 11:28:57
NEW DELHI: The apex consumer commission has held that a home buyer cannot be forced to forfeit
any amount deposited with a builder in case he seeks cancellation of allotment of flat to delay in
construction and directed real estate major Super-tech to refund the entire amount of over Rs 1
crore to a home buyer for delay of two years in delivering the house.
In order to discourage home buyers from cancelling allotment, builders always put stringent clauses
in the agreement on forfeiture of a substantial amount deposited by buyers. But the National
Consumer Disputes Redressal Commission (NCDRC) held that real estate companies cannot invoke
such harsh clauses in cases where the buyers are forced to seek cancellation due to inordinate delay
in completion of any project.
A bench of Justice V K Jain restrained Super-tech from forfeiting 15% of the cost of the unit as
cancellation charges after a buyer sought refund of money as the company failed to deliver the
house in its Noida housing project by December 2016 as per the agreement.
The Commission passed the order in favour of complainant Chandan Gupta who had booked a
residential flat with Supertech’s project ‘ORB Towers’ in Sector 74 of Noida for a consideration of Rs
2.36 crore. As per the agreement, the flat was to be delivered to him by June 2016 or latest by
December 2016 after including the grace period of six months.
As the developer failed to hand over possession within the stipulated period, the home buyer sought
cancellation of allotment and approached the Commission after the developer refused to refund Rs
1.08 cr which he had deposited so far. As the Commission directed that the amount be refunded to
the buyer, the developer contended that it was entitled to forfeit 15% of the cost of the unit as
cancellation charges as per clause 37 of the agreement between the parties.
The Commission, however, rejected its claim saying there was no merit in the contention. “In my
opinion, the aforesaid clause would apply to a case where the allottee, for his own reasons, seeks
cancellation of the allotment and does not apply to a case where he is forced to seek cancellation of
the allotment and refund of the amount paid by him to the developer on account of failure of the
developer to deliver possession of the house within the time period committed. Had the
complainant sought cancellation of the allotment before December 2016, by which the possession
was to be delivered to him even after giving benefit of the grace period to the builder, there could
have been some merit in the contention. But, he having filed the complaint after expiry of the
aforesaid time-line, clause 37 of the agreement would have no application,” it said.
It directed Supertech Ltd to refund the buyer within three months the entire principal amount of Rs
1.08 crore along with compensation in the form of simple interest at 10% per annum from the date
of each payment till the date of refund.
Source :- Economic Times