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Judgment
A complaint was filed in Form ‘M’ on 21.10.2024 by Mr. Avinash Prahlad Ahire & Ms. Pallavi Avinash Ahire (hereinafter referred to as ‘Complainants’) stating that they booked a commercial space/shop no. OCDL/SECOND/A/31R on ground floor having super area admeasuring 45sq. ft. in Multi-Level Car Parking cum Commercial Complex in the name and style of “Omaxe Chandni Chowk” (hereinafter referred to as “project”) promoted by “M/s Omaxe Heritage Pvt. Ltd.” (hereinafter referred to as “Respondents”).
The Complainants booked the said commercial space/shop through an application pursuant to which the Respondents had issued an allotment letter in favour of the Complainants.
The Complainants made a total payment of Rs. 15,00,000/- (Rupees Fifteen Lakhs Only) till date to the Respondents towards the purchase of the above-mentioned commercial space/shop.
The Complainants submitted that due to financial difficulties they now want to cancel the booking of the said Commercial Shop/Space for which they sent a request letter to the Respondents. It is also submitted that the Complainants visited the office of Respondents on various occasions and also written emails to them seeking refund of amount deposited by them with the Respondents along with interest. However, the Respondents failed to refund the amount deposited by the Complainants with them. Accordingly, they are now approaching this Authority to seek refund of amount deposited by them with the Respondents along with interest.
A preliminary hearing in the case was held on 18.11.2024. Notice of complaint was sent to the Respondents on 04.12.2024 via e-mail and on 05.12.2024 via registered post. The matter was subsequently heard on various dates. The Respondents filed their reply on 25.03.2025 and the Complainants thereafter filed the rejoinder on 30.06.2025.
We have heard the arguments and perused the records. For the sake of convenience, the arguments and submissions made on behalf of the Respondents are summarized as under:
a. The Complainants have paid only Rs. 5,00,000/- (Rupees Five Lakh Only) on two occasions vide Cheque No. 029747 dated 26.08.2023 and 029746 dated 14.08.2023, contrary to the claim of Rs. 15,00,000/-(Rupees 15 Lakhs only) paid.
b. Out of the paid amount of Rs. 5,00,000/-, the Respondents remitted Rs. 53,571.44/- to the concerned department towards GST, leaving a receipt amount of Rs. 4,46,428.56/-.
c. The Complaint is wholly erroneous, misconceived and not maintainable.
d. The Complainants have concealed the material fact that he is a co-applicant along with Ms. Pallavi Avinash Ahire for allotment of an undivided, un-partitioned commercial space in the project "Omaxe Chowk, Chandni Chowk" and both had opted for the down payment plan.
e. The allegations in the complaint are false and defamatory, and the Respondents reserve their right to initiate appropriate legal action against the Complainants.
f. The complaint is a clear and apparent abuse of the process of law aimed at taking undue advantage of the legislation and is filed to pressurize the Respondents to meet illegal and unreasonable demands.
g. The Respondents are a well-reputed and renowned real estate developer having developed and constructed various real estate projects across India. The project is registered with RERA vide Registration No. DLRERA2019P0005 dated 19.09.2019. The extension of registration was granted vide Letter dated 05.06.2020 for 09 months beyond the initial completion date of July 2023. The project has been completed within the extended period and the Completion cum Occupancy Certificate dated 16.10.2023 obtained from the Municipal Corporation of Delhi.
h. There is no delay on the part of the Respondents in completing the project. As per the payment plan opted by the Complainants, the payment structure was: Registration Amount of Rs. 2.5 Lakh; within 60 days of booking 90% of Basic Sale Price (BSP) (Less Booking Amount) plus GST; and on offer of possession 10% of BSP plus 100% Additional Charges plus GST.
Pursuant to the Application, the Respondents provisionally allotted Unit No. OCDL/SECOND/A/31R with a BSP of Rs. 66,15,000/-, additional costs of Rs. 97,102.45, totaling Rs. 67,12,102.45.
j. The Respondent requested the Complainants to make payment of the outstanding due amount of Rs. 55,07,071.44 along with GST of Rs. 6,60,848.56 vide letter dated 29.02.2024. As per the Statement of Account dated 08.04.2024, the Complainants had paid only Rs. 4,46,428.56 (after deducting GST of Rs. 53,571.44), leaving an outstanding balance of Rs. 70,16,975.89, which the Respondents requested the Complainants to pay within 10 days vide Letter dated 08.04.2024. The Complainants have defaulted in making timely payments of due amounts as per the payment plan despite repeated requests and reminders from the Respondents.
k. As per Clause 12 of the Application Form, it was agreed between the parties that timely payment of installments is the essence of the booking terms, and the Complainants agreed to make all payments within time as per the payment schedule without the Respondents being obliged to send demand or reminders.
l. As per Clause 13 of the Application Form, it was further agreed that if the Complainants fail to make payments for two consecutive months after notice from the Respondents, the Respondents will be authorized to cancel the allotment and forfeit the Booking Amount along with interest on installments, delayed payment interest, brokerage and ITA Commission. Any amount paid above these deductions would be refunded after compliance of formalities and the Agreement would stand terminated. Despite various repeated requests and reminders to pay the outstanding amount, the Complainants did not come forward with payment.
m. Therefore, the allotment was cancelled by the Respondents vide Cancellation Letter dated 09.05.2024, wherein the Complainants were informed that the Respondents would refund the balance amount, if any, after deducting amounts as per the Application Form terms and upon completion of necessary formalities. After the said cancellation, the Complainants were left with no rights or title to the said Unit and the Respondent was free to deal with the Unit as per choice. The Respondents deny that the Complainants paid Rs. 15 Lakhs in three installments during August-September 2023, or that the booking was cancelled by the Complainants in November 2023 via email, or that a 60-day refund period was given which has been surpassed, or that despite repeated follow-ups the Complainants have not received refund. The Respondents have not received any email for cancellation from the Complainants or any request for refund prior to the filing of this Complaint.
n. The Unit was cancelled by the Respondents due to non-payment of due installments by the Complainants despite various repeated requests and reminders, and therefore the question of the Complainants cancelling the Unit in February 2024 via email does not arise. After issuance of the Cancellation Letter dated 09.05.2024, the Complainants have not approached the Respondents for refund formalities. Instead, the Complainants have filed this false and frivolous Complaint based on totally untrue facts. The Complainants are not entitled to any relief as prayed in the Complaint.
o. Without prejudice, since the allotment has already been cancelled due to the Complainant's persistent default, the Complainants can seek only refund of the refundable amount after deduction as per the Application Form terms from the paid amount of Rs. 4,46,428.56 upon completion of refund formalities.
p. The present complaint is liable to be dismissed with heavy costs in favour of the Respondents and against the Complainants, and it is prayed that the complaint be dismissed with heavy cost in the interests of justice.
In the interregnum, this Authority identified that Ms. Pallavi Avinash Ahire constitutes a necessary party to these proceedings, as the property in question was booked in the joint names of both allottees. Consequently, her inclusion in the case title is essential for the proper adjudication of the matter. To this end, the Complainants filed an application dated 03.12.2025 seeking the formal impleadment of Ms. Pallavi Avinash Ahire as a party to the case.
We have perused the documents available on records and heard the arguments of the Complainants and Respondents.
Analysis and Considerations
At the outset, upon consideration of the application dated 03.12.2025 and the facts on record, this Authority is satisfied that Ms. Pallavi Avinash Ahire is indeed a necessary party whose presence is required for the complete and effective adjudication of the dispute. Accordingly, Ms. Pallavi Avinash Ahire is hereby impleaded as a party to this case, and the case title is amended to reflect her inclusion. Therefore, the application dated 03.12.2025 stands disposed off accordingly.
This Authority has carefully examined the facts and circumstances of the case, and the following issues emerge for determination:
I. Whether the Respondents were justified in raising a demand for more than 10 percent of the cost of unit allotted prior to execution and registration of Agreement for Sale.
II. Whether the Respondents are entitled to forfeit any amount from the payments made by the Complainants, particularly when no Agreement for Sale was executed and registered.
III. What is the appropriate refund mechanism applicable in the present case under the RE (RD) Act, 2016 and Rules framed thereunder?
For the sake of brevity, we shall discuss all these issues together in the paragraphs below.
The present case necessitates a comprehensive analysis of the statutory framework given under the RE(RD) Act, 2016, particularly Section 13, 88 and 89 of the Act, and Clause 20 of the form of Agreement prescribed under Rule 3 of Real Estate (Regulation and Development) (Agreement for sale) Rules, 2016 (hereinafter referred as "Agreement for Sale Rules").
Section 13 of the RE (RD) Act, 2016 provides the regulatory framework for governing the advance payments and agreements in real estate transactions. This provision deals with three crucial and sequential aspects: the 10% rule for advance payments, execution of agreement to sell, and mandatory registration of the said agreement. Each of these requirements is designed to create a structured and transparent framework for real estate transactions while protecting the interests of allottees. The relevant extract of Section 13 reads as follows:
"A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force."
In the present case, it is an undisputed fact that no Agreement for Sale was executed between the parties. The Complainants made the payments to the Respondents without any written Agreement for Sale as mandated under Section 13(1) of the RE (RD) Act, 2016. This non-execution of an Agreement for Sale constitutes a fundamental and more severe violation of the statutory framework than even non-registration of an agreement. The Respondents have failed to comply with the very foundational prerequisite prescribed under the Act before accepting any advance payment from the allottee.
An Agreement for sale does not per se transfer the ownership or title of a property nor it is a compulsorily registrable document under section 17 of the Registration Act, 1908. Therefore, execution and registration of the Agreement for Sale have to be understood in the light of the provisions of RE(RD) Act, 2016.
Section 88 of the RE (RD) Act, 2016 establishes the cumulative nature of the statutory framework, providing that the Act shall be in addition to and not in derogation of other laws. This provision ensures that the protections and obligations under the RE (RD) Act are supplementary to existing legal frameworks, thereby strengthening the overall regulatory mechanism. The relevant provision reads:
"Section 88. Act to be in addition to and not in derogation of other laws
The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."
Section 89 of the RE (RD) Act, 2016 provides the overriding effect of the Act in case of any conflict with other laws, ensuring the supremacy of the provisions of the RE(RD) Act, 2016 over inconsistent provisions in other statutes or instruments. This section establishes a clear hierarchy where provisions of the Act take precedence over conflicting legal frameworks. The provision states:
"Section 89. Act to have overriding effect
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act."
The interplay between Section 89 and Section 13(1) of the Act demonstrates the legislative intention to impose stricter compliance requirements in real estate transactions than those existing under general laws. By virtue of Section 89, the mandatory execution and registration requirement under Section 13(1) overrides the optional registration framework under the Registration Act, 1908. This statutory override ensures that real estate Agreements for Sale cannot escape the regulatory oversight that registration provides, thereby creating enhanced protection for allottees and greater accountability for promoters.
When no Agreement for Sale is executed as mandated under Section 13(1) of the Act, it not only renders the acceptance of any advance payment beyond 10 percent of the cost of the property unlawful, but also creates a legal disability for the promoter. The promoter cannot subsequently rely on any contractual provisions, payment terms, or forfeiture clauses when the foundational requirement of an Agreement for Sale has not been fulfilled. This creates a comprehensive protection for allottees from exploitative or arbitrary actions by promoters who fail to comply with the mandatory statutory requirements.
Clause 20 of form of agreement provided under section 3 of the (Agreement for Sale) Rules, 2016 deals with the binding effect of agreements and specifically addresses the consequences when agreements are not registered. Clause 20 reads as follows:
“BINDING EFFECT:
Forwarding this Agreement to the Allottee by the Promoter does not create a binding obligation on the part of the Promoter or the Allottee until, firstly, the Allottee signs and delivers this Agreement with all the schedules along with the payments due as stipulated in the Payment Plan within 30 (thirty) days from the date of receipt by the Allottee and secondly, appears for registration of the same before the concerned Sub-Registrar __________ (specify the address of the Sub-Registrar) as and when intimated by the Promoter.
If the Allottee(s) fails to execute and deliver to the Promoter this Agreement within 30 (thirty) days from the date of its receipt by the Allottee and/or appear before the Sub-Registrar for its registration as and when intimated by the Promoter, then the Promoter shall serve a notice to the Allottee for rectifying the default, which if not rectified within 30 (thirty) days from the date of its receipt by the Allottee, application of the Allottee shall be treated as cancelled and all sums deposited by the Allottee in connection therewith including the booking amount shall be returned to the Allottee without any interest or compensation whatsoever.”
The entire rationale of Clause 20 is predicated upon the existence of an Agreement for Sale and the steps for its execution and registration. In the present case, since no Agreement for Sale was ever executed, the provisions of Clause 20 operate with greater force to mandate the return of all sums deposited by the allottee. When the foundational requirement is not met, the statutory consequences become even more stringent.
The Respondents' contention that they are entitled to forfeit any amount from the payments made by the Complainants cannot be sustained in law. The Respondents have failed to comply with the basic and mandatory requirement of executing a written Agreement for Sale as stipulated under Section 13(1) of the RE (RD) Act, 2016. Without an Agreement for Sale, there can be no contractual basis for forfeiture, retention of booking amounts, or any other deductions.
The legislative intent behind the mandate to execute and register an Agreement for sale is abundantly clear and purposeful. When a promoter fails to comply with the mandatory requirement of executing a written Agreement for Sale, the law strips away the promoter's right to impose any payment obligations, raise demands, or forfeit any amount received from the allottee. This is a penal consequence imposed on the promoter for non-compliance with statutory obligations, and such consequence cannot be waived or modified by contractual arrangements or unilateral terms prescribed by the promoter, may it be clauses in application form.
In absence of an executed Agreement for Sale, there can be no other contractual obligation between the parties under RE(RD) Act, 2016. The supremacy clause contained in Section 89 of the Act ensures that the provisions of the RE (RD) Act, 2016 override any inconsistent or purported contractual terms.
Regarding the issue of GST payments, it is evident from the record that the Complainants have paid an amount towards GST as part of their total payment of Rs. 15,00,000/-. The nature of GST is such that it is a tax collected by the seller on behalf of the government and is ultimately remittable to the tax authorities. In cases where the underlying transaction fails or is cancelled, the GST component requires special consideration. The GST component collected by the promoter has to be deposited with the tax authorities/government. In case any transaction of immovable property fails to materialise for any reason, then promoter can seek refund of the amount deposited as GST based on the principle that when the said property is actually sold to some other person or entity, GST shall be paid again, and double collection of GST for the same amount would be against the provision of law. The Respondents have not provided any proof of deposit of GST in the subject transaction. But, even if it is deposited, the promoter can seek its refund on proof of cancellation of Agreement for Sale. Thus, any deduction on account of GST cannot be allowed.
The Respondents cannot legitimately take shelter under the provisions of the Application Form, including Clauses 12 and 13 thereof, to justify forfeiture, retention of amounts, or levy of any deductions when the law specifically and categorically prohibits such forfeiture in the absence of an executed and duly registered Agreement for Sale. The Application Form, by itself, does not constitute the written Agreement for Sale mandated under Section 13(1) of the RE (RD) Act, 2016. An Application Form is merely the initial document through which an allottee expresses intent to book a unit and does not fulfil the statutory requirement of entering into a written Agreement for Sale. The forfeiture clauses embedded in the Application Form, namely Clauses 12 and 13, cannot override or circumvent the mandatory statutory framework prescribed under the Act and the rules framed thereunder.
All promoters are required to enter into an Agreement for Sale with the allottees in the format prescribed under the Agreement for Sale Rules, 2016. When no proper Agreement for Sale has been executed as required by law, the entire structure of contractual obligations, including any forfeiture provisions contained in the Application Form, becomes void and unenforceable. The statutory framework enshrined in the RE (RD) Act, 2016 is deliberately designed to penalize promoters who fail to comply with mandatory requirements, and these penalties represent a conscious legislative choice that cannot be circumvented through reliance on clauses in preliminary documents or post-facto justifications.
It is pertinent to note that the RE (RD) Act, 2016 was enacted with the specific objective of protecting the interests of allottees and ensuring transparency and accountability in the real estate sector. The mandatory requirement for execution and registration of agreements and the penal consequences for non-compliance are essential safeguards built into the statutory framework to prevent exploitation of commercial space purchasers and to ensure that promoters do not circumvent the protective provisions of the Act.
Based on the aforesaid analysis and considering the statutory provisions under the RE (RD) Act, 2016 and Rules framed thereunder, this Authority arrives at the following findings:
No Agreement for Sale was executed between the parties, which constitutes a fundamental violation of Section 13(1) of the RE (RD) Act, 2016.
As no Agreement for Sale was executed and registered, the Respondents were not entitled to raise demand of more than 10 percent of the cost of unit, that being in direct contravention of Section 13(1) of the RE (RD) Act, 2016.
Consequent to the non-execution of an Agreement for Sale, the statutory framework prescribes that all sums deposited by the allottee, including the booking amount, shall be returned without any deductions whatsoever. Thus, the unexecuted transaction between the Complainants and the Respondent does not create any binding obligation on the Complainants.
The Respondents are liable to refund the entire amount received from the Complainants without any deductions whatsoever. The Respondent's claim for forfeiture of booking amount, interest on delayed payments, brokerage and commission is legally unsustainable and contrary to the statutory provisions under the RE (RD) Act, 2016.
The Complainants cannot claim any interest or compensation whatsoever in addition to the refund of the principal amount paid.
In light of the above findings, the claim of Respondent for forfeiture of booking amount and other deductions is legally unsustainable and contrary to the statutory provisions under the RE (RD) Act, 2016. The Complainants are entitled to the refund of the entire amount deposited by them with the Respondents, being Rs. 15,00,000/- without any deductions whatsoever. Accordingly, this Authority hereby orders as under:
a. The Respondents M/s Omaxe Heritage Private Limited are directed to refund the amount of Rs. 15,00,000/- (Rupees Fifteen Lakhs Only) to the Complainants, Mr. Avinash Prahlad Ahire and Ms. Pallavi Avinash Ahire, without any deductions and without any interest after the stipulated deadline within 45 days of the date of this order. In case of non-compliance with this order within the stipulated time, the Respondent shall be liable to pay additional interest at the rate of 10.80% per annum till actual payment.
b. Regarding the GST component, the Respondents have not given any proof of deposit of this amount. Even if the promoter has deposited the GST, they can claim the refund as per law because GST cannot be collected twice for the same amount.
c. The office is hereby directed to issue a show cause notice to the Respondents, ‘M/s Omaxe Heritage Private Limited’, calling upon them to show cause as to why action should not be initiated against them for:
violating the mandatory requirements of Section 13 of Act by accepting advance payments of more than 10% of the total cost of the units without executing and registering written Agreements for Sale; and;
allotting and accepting payments for virtual or notional commercial spaces that lack physical existence and substantive demarcation in contravention of the provisions of the Act, which permits allotment only of clearly defined and physically ascertainable units.
The case is disposed of accordingly.
No order as to costs.
File be consigned to record room.