AI Structured Summary
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Judgment
A complaint was filed in Form „M‟ on 23.06.2025 by Mr. Jagdish Ganpat Budha (hereinafter referred to as „Complainant‟) stating that he booked a commercial space/shop no. OCDL/GROUND/C/86H having carpet area admeasuring 20 sq.fts./1.86 sq. mts. and super area admeasuring 50 sq.fts./4.65 sq. mts. with “M/s Omaxe Heritage Pvt. Ltd.” (hereinafter referred to as “Respondents”) in their project namely “Omaxe Chandi Chowk, Multi-Level Car Parking along with Commercial complex” (hereinafter referred to as “project”) in Chandni Chowk, New Delhi-110006.
The Complainant had entered into an Agreement for Sale with the builder on 19.03.2021 for purchase of the above-mentioned commercial space/shop.
The Complainant made a total payment of Rs. 18,90,000/- (Rupees Eighteen Lakhs Ninety Thousand Only) including GST till date to the Respondents towards the purchase of the above-mentioned commercial space/shop.
The Complainant submitted that to his utter shock the Respondents had cancelled the said allotment of commercial space/shop vide letter dated 10.05.2022 and did not refund the amount paid In spite of several reminders by the Complainant which contravenes the provisions of The Real Estate (Regulation & Development) Act, 2016, (hereinafter referred as The RE (RD) Act, 2016 or “The Act”)
It is also submitted that the Complainant visited the office of Respondents on various occasions and also written emails to them seeking refund of amount deposited by the Complainant with the Respondents along with interest. However, the Respondents kept on delaying the matter on one pretext or the other. Accordingly, the Complainant has approached this Authority to seek refund of amount deposited by him with the Respondents along with interest.
A preliminary hearing in the case was held on 21.07.2025. A notice of complaint was sent to the Respondents on 12.08.2025 via registered post and on 14.08.2025 via e-mail.
The Respondents filed their reply on 28.10.2025 and the Complainant, thereafter, filed the rejoinder on 07.11.2025.
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:
The Complainant approached the Respondents by way of Application Form (hereinafter „said Application form‟) for allotment of a non-lockable, un-partitioned commercial space, being a part of the larger commercial space in the “Omaxe Chandi Chowk, Multi Level Car Parking along with Commercial Complex‟ popularly known as “Omaxe Chowk‟, Chandni Chowk‟ and opted for „Development Linked Payment Plan‟.
That in pursuance of the said application, the Respondents allotted an undivided and un-partitioned Commercial Space bearing No. OCDL/GROUND/C/86H having carpet area admeasuring 20 sq.fts./1.86 sq. mts. and super area admeasuring 50 sq.fts./4.65 sq. mts. being undivided and indivisible part of the larger commercial space.
The Complainant entered into an Agreement for Sale dated 19.03.2021 with the Respondents, whereby the Complainant agreed to pay Rs. 67,87,500/- towards the total cost of the said Unit along with Rs. 8,13,000/- towards GST.
The Complainant/Allottee agreed to abide by the terms and conditions of the said Agreement. As per Clause 4 and 5 of the said Agreement, it was agreed between the parties that:-
“4. Adjustment/Appropriation of Payments:
………Similarly, the allottee (s) is also under obligation to pay the scheduled installments in time for timely completion of the project and any delay/default in timely payment of the scheduled installments shall, apart from other remedies available to the Promoter under RERA Act, 2016, enable the Promoter to extend the period of delivery of possession at its option.”
5. Time is essence:
…… Similarly the Allottee(s) shall make timely payments of the instalments and other dues payable by him/her and meeting the other obligation under the Agreement subject to the simultaneous completion of construction by the Promoter as provided in Schedule C-2 (Payment Plan)”
The said Project is registered with the RERA, NCT of Delhi, vide RERA Registration No. DLRERA2019P0005 dated 19.09.2019. The initial completion period was July 2023.
In gross violation of the above-mentioned clauses of the said Agreement, the Complainant failed to adhere to the payment plan as opted by him and paid only an amount of Rs. 16,87,500/- plus applicable GST of Rs. 2,02,500/- towards the said Unit totalling to Rs. 18,90,000/- till date as against the total cost of Rs 76,00,500.
Despite the reminder Letters dated 29.06.2021, 20.10.2021 and 19.04.2022 to pay the balance due along with interest to the Respondents, the Complainant did not come forward to pay the due amount to the Respondents and chose to ignore the repeated requests and reminders of the Respondents.
Vide Letter dated 05.06.2020, the Competent Authority extended the registration of the said Project for nine months beyond initial completion date of July, 2023.
The said project has been completed in the extended period and, a Completion Cum Occupancy Certificate dated 16.10.2023 has been granted by the Municipal Corporation of Delhi.
As such, there is no delay on the part of the Respondents in completion of the said Project.
The Respondents completed their part of the obligation by completing the said Project and receiving Occupancy cum Completion Certificate from the Municipal Corporation of Delhi on 16.10.2023.
As per the said Application, the Complainant agreed to pay the instalments and additional charges/costs as per the payment plan opted by him and as demanded by the Respondents, failing which the said Application/allotment shall stand cancelled and the part booking amount paid, along with interest, if any, shall be forfeited by the Respondent/Promoter.
Further, as per Clause 9.3 (i) of the Agreement, it was agreed between the parties that;
“In case the Allottee fails to make payments for 2 (two) consecutive demands made by the Promoter as per the Payment Plan annexed hereto, despite having been issued notice in that regard, the Allottee shall be liable to pay interest to the promoter on the unpaid amount at the rate prescribed in the Rules.”
Furthermore, as per Clause 9.3 (iv) of the said Agreement, it was agreed between the parties that,
“(iv)In case of Default by the allottee under the condition listed above continues for a period beyond ninety days after notice from the Promoter in this regard, the Promoter may cancel the allotment of the Unit in favour of the Allottee and refund the money paid to him by the Allottee by forfeiting the booking amount paid for the allotment, interest liabilities and dealer commission and this Agreement shall thereupon stand terminated………..”
The Complainant failed to make the payment of the balance dues in timely manner despite the demand 29.06.2021, 20.10.2021 and 19.04.2022 and the offer of possession of the said Unit by the Respondents. Thus, exercising their rights under the aforementioned Clauses of the said Agreement and the said Application, the Respondents cancelled the Allotment vide Letter dated 10.05.2022. The Complainant was duly informed that the balance sum, if any, will be refunded upon completion of necessary formalities by the Complainant. After the said cancellation, the Complainant was left with no rights or title qua the said Unit and the Respondents were free to deal with the said Unit in any manner as per their choice.
That without prejudice, it is submitted that, the total cost of the said unit is Rs. 76,00,500/-. The Complainant is entitled for refund of amount deposited after deduction of the booking amount i.e. Rs. 6,75,000/- (10% of the total cost of the Unit as per Clause 11 of the Application), in terms of Clause 9.3 (iv) of the said Agreement dated 19.03.2021.
Analysis and Considerations
The Authority has carefully examined the facts and circumstances of the case, and the following issues emerge for determination:
Whether the Respondents were justified in raising demand of more than 10 percent of the cost of unit allotted, prior to registration of the Agreement for Sale dated 19.03.2021.
Whether the Respondents are entitled to forfeit any amount from the payments made by the Complainant, particularly in light of the non-registration of the Agreement for Sale.
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, I discuss all these issues together in following paras:
The present case necessitates a comprehensive analysis of the statutory framework given under the RE (RD) Act, 2016, particularly the Sections 13, 88, 89 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 cornerstone of the regulatory framework for governing the advance payments and agreements in real estate transactions. This provision provides not more than 10% of total payments to be accepted before the registration of the Agreement. Each of the requirements under clause 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 under:
“Section 13: No deposit or advance to be taken by promoter without first entering into agreement for sale.
(1)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.”
The Agreement for Sale is neither per se transfer of ownership or title of a property nor a compulsorily registrable document under section 17 of the Registration Act, 1908. Therefore, the significance and need for registration of Agreement for Sale dated 19.03.2021, has 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, 2016 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 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, by creating enhanced protection for allottees and greater accountability for promoters.
The effect of non-registration of an Agreement for Sale under the RE (RD) Act, 2016 is significant. Under Section 49 of the Registration Act, 1908, the documents required to be registered cannot affect immovable property unless registered. However, under the specific regime of the RE (RD) Act, 2016, non-registration of Agreement for Sale has more severe consequences. When an Agreement for Sale is not registered as mandated under Section 13(1) of the Act, it not only fails to create enforceable rights in the immovable property but also renders the very acceptance of advance payments of more than 10 percent of the cost of payment unlawful. This creates a legal disability for the promoter who, having violated the prerequisite condition, cannot seek enforcement of contractual terms that would prejudice the allottee's interests. The registration thus operates as a statutory shield protecting allottees from exploitative contractual provisions and ensures that promoters cannot benefit from their own non-compliance with 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.”
In the present case, it is an undisputed fact that the Agreement for Sale dated 19.03.2021 executed between the parties was never registered under the provisions of the Registration Act, 1908 as mandated by Section 13(1) of the RE (RD) Act, 2016. This non-registration assumes critical significance in light of the specific consequences prescribed under clause 20 of the Form of Agreement in the Agreement for Sale Rules, 2016. The failure to register the Agreement, despite it being a mandatory statutory requirement will not create a binding contract between the allottee and the promoter.
The Respondents' contention that they are entitled to forfeit 10% of the total consideration as booking amount, along with interest on delayed payments and dealer commission, cannot be sustained in law. Clause 20 of the Form of Agreement in the Agreement for Sale Rules, 2016 operates as a statutory override to any contractual provisions that may provide for forfeiture or retention of amounts when the agreement is not registered as required under Section 13(1) of the Act.
The legislative intent behind mandate to register an Agreement for sale is clear and purposeful. When a promoter fails to comply with the mandatory requirement of registration of the Agreement for Sale, the law strips away the promoter's right to 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. Similarly, if the allottee fails to come forward for the registration of Agreement for Sale, he or she also suffers penal consequences as the application of an allottee shall be treated as cancelled and the deposited amount will be refunded without any interest or compensation.
Furthermore, the Respondents' reliance on various clauses of the unregistered Agreement for justifying forfeiture is legally untenable. An unregistered Agreement does not create any contractual obligation between the parties. The supremacy clause contained in Section 89 of the Act ensures that the provisions of the RE (RD) Act, 2016 override any inconsistent contractual term.
Regarding the issue of GST payment as part of total payment, following observations are made:
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. This is based on the principle that when the said property is actually sold to some other person or entity, than GST shall be paid again, and double collection of GST for the same property would be against the provision of law. To cater to such a situation in sale transaction, specific provisions are provided with the Central Goods and Services Tax Act, 2017 for refund of GST deposited for a sale transaction, which does not materialised.
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' submission regarding Real Estate Agents commission also cannot be sustained as default has occurred on part of the Respondents. The Clause 20 of the Form of Agreement for Sale in Agreement for Sale Rules, 2016 is very specific and categorically mandates that all the deposits made including booking amount shall be refunded without any interest or compensation.
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 of registration of agreements and the penal consequences for non-compliance are essential safeguards built into the statutory framework to prevent exploitation of home buyers and commercial space purchasers.
The Respondents cannot legitimately take shelter under the contractual provisions of an unregistered agreement to justify forfeiture when the law specifically and categorically prohibits such forfeiture. The statutory framework in clause 20 in the Form of Agreement for sale provided in the Agreement for Sale Rules, 2016 is deliberately designed to penalize promoters as well as allottees, who fail to comply with mandatory registration requirements, and this penalty represents a conscious legislative choice that cannot be circumvented through private contractual arrangements or post-facto justifications.
FINDINGS AND CONCLUSION
Based on the aforesaid analysis and considering the statutory provisions made under the RE (RD) Act, 2016 and Rules framed thereunder, this Authority arrives at the following findings:
The Agreement for Sale dated 19.03.2021 between the parties was not registered as mandated under Section 13(1) of the RE (RD) Act, 2016.
The demand of more than 10 percent of the cost of unit by the Respondents, without registration of the Agreement for Sale dated 19.03.2021 was in contravention of Section 13 (1) of the RE(RD) Act, 2016 and not justified.
Consequent to non-registration of the Agreement for Sale, Clause 20 of the Form of Agreement for Sale provided under the National Capital Territory of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016 becomes applicable, which mandates that the promoter shall return all sums deposited by the allottee including booking amount. Thus, the unregistered Agreement for Sale dated 19.03.2021 executed between the Complainant and the Respondent does not create a binding obligation between them.
The Respondents are liable to refund the entire amount received from the Complainant without any deductions whatsoever.
The Complainant also cannot claim any interest or compensation whatsoever.
In light of the above findings, the claim of Respondent for forfeiture of booking amount, interest on delayed payments, and dealer commission is legally unsustainable and contrary to the statutory provisions under the RE (RD) Act, 2016.
In the view of the above analysis and findings, this Authority hereby orders as follows:
The Respondents M/s Omaxe Heritage Private Limited are directed to refund an amount of Rs. 18,90,000/- (Rupees Eighteen Lakhs Ninety Thousand Only) to the Complainant, Mr. Jagdish Ganpat Budha, without any interest within 45 days of the date of this order.
As regards GST component of Rs. 2,02,500/-, the Respondents did not give 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.
In case of non-compliance of this order within the stipulated time, the Respondents shall be liable to pay additional interest calculated at the rate of 10.80% per month till actual payment.
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:
a. violating the mandatory requirement 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;
b. 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.