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Judgment
A complaint was filed in FORM ‘M’ on 25.03.2021 by Mr. Vipul Ahuja and Mrs. Neena Ahuja (hereinafter referred as “Complainants”) stating that in the year 2019 they approached “Godrej Vestamark LLP” (hereinafter referred as “Respondents”) for booking of an apartment in the Respondent’s project namely “Godrej South Estate”, Plot no. B-319, Okhla Industrial Area, Phase-1, New Delhi.
The Respondents allotted them Unit no. 202, 2nd floor, Tower no. SB-1 having 111.24 sq. mts. carpet area and 22.97 sq. mts. exclusive balcony.
The allotment was done by the Respondents as per allotment letter dated 28.12.2020 at a total sale consideration of Rs. 4,30,95,504/- (Rupees Four Crore Thirty Lakh Ninety Five Thousand Five Hundred and Four Only).
The Complainants paid an amount of Rs.42,93,541/- (Rupees Forty Two Lakh Ninety Three Thousand Five Hundred and Forty One Only) to the Respondents towards the cost of flat.
The Complainants submitted that they are now affected by the proposed changes in layout and building plans and intend to withdraw from the project. Therefore, they seek refund of amount deposited with the Respondents along with interest.
A preliminary hearing in this case was held on 27.07.2021 and a notice to the Respondents was issued on 03.08.2021.
The matter was heard in several hearings dated 02.09.2021, 21.10.2021, 01.12.2021, 03.02.2022, 15.03.2022 and 23.03.2022. The Respondents filed their reply on 26.11.2021 and written submission on 21.03.2022. However, no written submission was filed by the Complainants.
We 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 Complainants have failed to fulfill their contractual obligation to execute the ‘Agreement for Sale’ and have committed a material breach as per clause 11 of the application form. The Respondents vide email dated 05.12.2019 sent a reminder to the Complainants to execute the ‘Agreement for Sale’.
After the allotment of the unit, the Complainants vide email dated 11.05.2020 communicated their financial incapacity to make the payment of further installments as per the opted plan incorporated in allotment letter dated 19.10.2019 and requested to convert/revise the existing payment plan to get more time to arrange the funds.
Vide email dated 31.05.2020, the Complainants requested for cancellation of their booking due to major financial loss in the business and also requested for a full refund. The Respondents vide email dated 16.07.2020 informed the Complainants that the entire money (10% of the total cost price) will be forfeited in terms of the application form.
The Complainants vide email dated 17.08.2020 agreed to continue with the unit with the revised payment plan. The revised cost sheet/payment plan was duly accepted by the Complainants vide email dated 16.12.2020 without any protest.
The Respondents vide their email dated 04.01.2021 sent new allotment letter dated 28.12.2020 with revised payment plan and ‘Agreement for Sale’. As per clause 5 of the application form, the Complainants agreed and undertook to pay all amounts due to the Respondents as per the new payment plan.
Clause 11 of the application form clearly stipulates that in case Complainants fail to come forward and register the ‘Agreement for Sale’ of the unit, the Respondents shall without prejudice to any other rights be entitled at their sole discretion reserve the right to cancel Application Form and forfeit booking and non-refundable amount.
As per clause 14 of the application form, the Complainants agreed that in the event of failure on part of the Complainants in complying with obligations as set out in the application form or allotment letter including timely registration of ‘Agreement for Sale’, the Respondents shall be entitled to cancel/terminate the allotment and forfeit the various amounts paid / due from the Complainants.
The Respondents proposed changes in the unlaunched Tower-1 of the project and have initiated the process of taking consent from the allottees. However, there has been no change in the tower where the Complainants have booked their unit.
The Complainants vide emails dated 16.03.2021 sent a notice dated 15.03.2021 seeking cancellation and refund of the amount paid by them on the ground that the modification in building plans proposed by the Respondents is in the contravention of Section 12 of the RE (RD) Act, 20161.
The Respondents vide email dated 18.03.2021 informed that the Complainant is bound by the terms and conditions of the application form. Therefore, if booking is withdrawn for reasons not attributable to the Respondents, the Respondents shall not be able to refund the booking amount along with service tax and interest on delayed payment.
The Complainant submitted that the builder cannot deduct the booking amount/earnest money at the pre-agreement stage (where the Builder Buyer Agreement has not been executed). The Clause 20 of the National Capital Territory of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016 explains binding effect between the allottee and the builder, which is reproduced hereunder :
“20.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.”
Analysis and Consideration:
A perusal of the documents available on record shows that the Respondents have received a sum of Rs.42,93,541/- (Forty-Two Lakh Ninety Three Thousand Five Hundred And Forty-One Only) from the Complainants.
Though the initial complaint in Form ‘M’ was signed by Mr. Vipul Ahuja only, on request Mrs. Neena Ahuja was allowed as Co-Complainant.
The records show that the Respondents had moved an application dated 16.09.2021 before the Authority seeking permission to implement the project as per revised building plans 26.08.2021. The Authority after considering the request as per their order dated 03.06.2022 approved the proposal of Respondents to implement the project as per revised building dated 26.08.2021.
Since, in the present case, no ‘Agreement for Sale’ (builder buyer agreement) has been executed between the parties, the Respondents cannot forfeit earnest money or booking amount in terms of clause 20 of the National Capital Territory of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016. The Respondents to avoid such a situation should have acted in time after booking was made by the Complainants to get ‘Agreement for Sale’ signed or else cancelled the booking on their own following the procedure stated in the clause. In that case Respondents were not liable to pay any interest.
The statement of objects and reasons of RE(RD) Act, 2016 clearly states that the RE(RD) Act, 2016 attempts to balance the interests of consumers and promoters by imposing certain responsibilities on both. It seeks to establish symmetry of information between the promoter and purchaser, transparency of contractual conditions, sets minimum standards of accountability and a fast-track dispute resolution mechanism.
Though, the Respondents can develop their project as per the revised building plans as approved by the Authority, the allottees can seek refund of the amounts deposited with them if they do not agree with the changes proposed subsequent to their booking which is not considered as builder buyer agreement.
Further, we note that the promoters, M/s Godrej Vestamark LLP are seeking 20 percent of the total cost as booking amount from the prospective allottees, which is in contravention of section 13 of RE (RD) Act, 2016. This action of the Respondents make them liable for action under Sections 13 & 61 of RE (RD) Act, 2016. We would take separate action against Respondents on this account.
Further, it is observed that the Respondents have neither deposited the cost of Rs.5000/-imposed upon them for delay in filing reply nor filed any application for condonation of the cost imposed. As such the cost of Rs.5,000/- imposed on the Respondents vide order dated 21.10.2021, the Authority decides that this cost be paid to the Complainant.
In the light of above, we consider it appropriate to direct the Respondents, M/s Godrej Vestamark LLP, to refund the entire amount of Rs.42,93,541/- (Rupees Forty Two Lakh Ninety Three Thousand Five Hundred And Forty One Only) to the Complainants, Mr. Vipul Ahuja and Mrs. Neena Ahuja alongwith 10% (MCLR + 2%) interest per annum within 45 days of issuance of this order and also to pay them Rs. 5,000/- cost imposed on them by the Authority on 21.10.2021 for delay in filing the reply.
The case is disposed of accordingly.
No orders as to costs.
Footnotes
- 1.The Real Estate (Regulation and Development) Act, 2016