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Judgment
A complaint was filed in Form 'M' on 08.08.2025 by Ms. Jogesh Kumari and Ms. Sneh Lata (hereinafter referred to as 'Complainants') stating that they had booked a commercial unit bearing No. MRC-FF-086 measuring 276 Sq. Ft. in project “MIGSUN Rohini Central”, promoted by Yogiraj Promoters Pvt Ltd., 306-308 Square One, C-2, District Centre, Saket, New Delhi (hereinafter referred to as 'Respondents' or „Respondent Company‟).
The Complainants submitted that they had booked the unit at a total cost of Rs. 60,97,592/- (Rupees Sixty Lakh Ninety Seven Thousand Five Hundred Ninety Two Only). Out of which they had paid Rs. 6,34,390/- (Rupees Six Lakh Thirty-Four Thousand Three Hundred and Ninety only) which included Rs. 6,10,000/-as booking Amount and Rs. 24,390/- towards 1% TDS amount.
The Complainants submitted that the Respondents failed to acknowledge the receipt of Booking Amount in the Welcome Letter issued on 31.07.2024. The Respondents have never provided any draft Agreement for Sale to the Complainants for execution and registration of the same, but regularly demanded further payments which was against the spirit of Section 13 of Real Estate (Regulation and Development) Act, 2016 (hereinafter, referred to as „RE (R&D) Act, 2016‟ or „The Act‟) and rules made thereunder. After they failed to provide the same, the Complainants lost faith in Respondents and were left with no option but to seek refund of the amount of Rs. 6,34,390/- (Rupees Six Lakh Thirty-Four Thousand Three Hundred and Ninety only) along with interest. The Complainants, therefore, requested refund of this amount. However, the Respondents have not refunded this amount till date.
A preliminary hearing in the case was held on 08.09.2025. Notice of complaint was sent to the Respondents on 12.09.2025. The Respondents filed their reply on 06.10.2025 and the Complainants thereafter filed the rejoinder on 29.10.2025. The matter was subsequently heard on various dates.
For the sake of convenience, the arguments and submissions made on behalf of the Respondents are summarized as under:
a. The Respondents submitted that the Complainants had booked a commercial unit as per the terms and conditions of the booking form which they had signed of their own free will and consent.
b. The total sale consideration for unit bearing no. FF-086 was Rs. 60,97,592/-. And, out of which the Complainants paid an amount of Rs. 6,10,000/- and Rs. 24,390/- was paid towards 1% TDS.
c. The Complainants had been called multiple times on different intervals to come up for further formalities of the booked units but the Complainants themselves did not turn up for further processing.
d. Despite issuing reminder letters and final call letters, the Complainants did not turn up for any further process. Consequently, the Respondents cancelled the said unit vide Termination Letter dated 20.08.2025.
We have perused the documents available on records and heard the arguments of the Ld. Counsels of both Complainants and Respondents.
ANALYSIS AND CONSIDERATIONS
Based on the pleadings, submissions, and documents on record, the following issue arise for determination by this Authority:
Whether the Complainants are entitled to refund of the amount paid for the commercial unit.
It is a matter of record that the Complainants have paid Rs. 6,34,390/- (Rupees Six Lakh Thirty-Four Thousand Three Hundred and Ninety only) including booking Amount of Rs. 6,10,000/- and Rs. 24,390/- towards 1% TDS amount.
It may be pointed out here that Introduction and statement of Objects and Reasons of the Act, clarifies that the Act 2016 was introduced because the Real Estate sector was unregulated and lacked professionalism, standardization and adequate consumer protection. The Act 2016, therefore, aims at regulation and promotion of Real Estate sector, uniformity and standardization of business practices and transactions in Real Estate sector, transparency in sale and contractual conditions and protection of consumer interests.
The Act 2016 lays down the parameters of contractual conditions and standardize the business practices in real estate sector. Therefore the contractual conditions and financial transactions in Real Estate sector would be governed by provisions of the Act, 2016. The terms and conditions set out in any offer, Application form, Allotment letter, Agreement for Sale or any other related document binding the allotee and the promoter in a real estate relationship must conform to the provisions of the Act.
In the present complaint, the Authority has noted that the Agreement for Sale has neither been executed nor registered. This is against the mandatory provision of Section 13 of the RE (R&D) Act, 2016. Section 13 of the RE (R&D) Act, 2016 constitutes the cornerstone of the regulatory framework governing advance payments in real estate transactions. 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 statutory requirement under Section 13(1) of the Act is mandatory and non-negotiable. It creates two essential and sequential conditions: first, the execution of an agreement for sale, and second, the registration of that agreement. Both conditions must be satisfied simultaneously before any advance payment exceeding 10% can be lawfully accepted. The legislature has deliberately made these conditions sequential and mandatory to protect the interests of allottees and to ensure transparency and accountability in real estate transactions.
The effect of non-execution and non-registration of an Agreement for Sale under the RE (R&D) Act, 2016 is significant and has far-reaching consequences. When an agreement for sale is not executed and 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 exceeding ten percent of the cost unlawful. This creates a legal disability for the promoter who, having violated the prerequisite condition, cannot seek enforcement of any contractual terms that would prejudice the allottee's interests. The non-execution and non-registration thus operate as a statutory shield protecting allottees from exploitative arrangements and ensures that promoters cannot benefit from their own non-compliance with mandatory statutory requirements.
It is a matter of record that the Agreement for Sale has neither been executed nor registered. The Complainants submitted that despite repeated reminders the Respondents didn‟t come forward for the execution of Agreement for sale. Therefore, having no option left, they are seeking refund of the amount paid.
Clause 20 of the National Capital Territory of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016 (hereinafter, referred to as „Agreement for Sale Rules, 2016‟), read with Rule 3 of the Agreement for Sale Rules, 2016, unequivocally stipulates that no binding obligation accrues until mutual execution and registration as intimated by the Promoter. Consequently, where the Agreement for Sale remains unexecuted and unregistered, the allottee will be entitled to refund of the principal amount paid by him to the Promoter. Clause 20 of the Agreement for Sale Rules, 2016 provides as under:
"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 evident from the record that no Agreement for Sale was ever executed and registered between the Complainants and the Respondents. The Respondent Company‟s own pleading confirms this factual position. The Respondents have not provided any evidence that an Agreement for Sale was ever forwarded to the Complainants for execution and registration. The Respondent Company‟s claim that the Complainants did not come forward for execution of Builder Buyer Agreement cannot absolve the Respondents of its statutory obligation under Section 13(1) of the Act. The mandatory requirement to execute and register an Agreement for Sale was the responsibility of the Respondents as a promoter, and such responsibility cannot be delegated or shifted to the allottees.
We note that Clause 7.5 of the Agreement for Sale Rules, 2016 states as under:
“7.5Cancellation by Allottee – The Allottee shall have the right to cancel/withdraw his allotment in the Project as provided in the Act: Provided that where the allottee proposes to cancel/withdraw from the project without any fault of the promoter, the promoter herein is entitled to forfeit the booking amount paid for the allotment. The balance amount of money paid by the allottee shall be returned by the promoter to the allottee within 45 days of such cancellation.”
Further, Clause (2) of Rule 3 of Agreement for Sale Rules, 2016 stipulates as follows:
“Any application letter, allotment letter, agreement, or any other document signed by the allottee, in respect of the apartment, plot or building, as the case may be, prior to the execution and registration of the Agreement for Sale for such apartment, plot or building, as the case may be, shall not be construed to limit the rights and interests of the allottee under the Agreement for Sale or under the Act or the rules or the regulations made thereunder.”
It may be noted here that a collective reading of Clause (2) of Rule 3 of the Agreement for Sale Rules, 2016 and Clause 20 of the draft Agreement for Sale Annexed under Rule 3 of the Agreement for Sale Rules, 2016 would show that the rights of allottees shall not be taken away by any application letter, allotment letter, agreement, or any other document which was signed or executed before the execution and registration of the Agreement for Sale for the allotted flat or unit. Therefore the provisions of Clause 7.5 of the National Capital Territory (NCT) of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules 2016 would be applicable to the cases where the Agreement for Sale has been duly signed and registered.
It may therefore be seen that the scheme of the RE (R&D) Act, 2016, read along with The National Capital Territory of Delhi Real Estate (Regulation and Development) (General) Rules 2016, and National Capital Territory (NCT) of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules 2016, envisage that in cases where the Agreement for Sale has not been executed or registered, the allottee is entitled to withdraw from the project and entitled for refund of the amount paid by them.
Regarding TDS payment, it is evident from the record that the Complainants paid Rs. 24,390/- towards TDS as part of the total payment of Rs. 6,34,390/-. The nature of TDS 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 TDS component requires special consideration.
The TDS 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 TDS. This is based on the principle that when the said property is actually sold to some other person or entity, than TDS shall be paid again and double collection of TDS for the same property would be against the provision of law. Thus, any deduction of TDS will not be allowed.
In light of the above findings, this Authority hereby orders and directs as follows:
a. The Respondents, „M/s Yogiraj Promoters Private Limited‟, are directed to refund to the Complainants, Ms. Jogesh Kumari and Ms. Sneh Lata, the amount of Rs. 6,34,390/- (Rupees Six Lakh Thirty-Four Thousand Three Hundred and Ninety only) within 45 days from the date of this order.
b. In case of non-compliance with this order within the stipulated period of 45 days, the Respondents shall be liable to pay interest at the rate of 10.75% per annum from the date of this order till actual payment of the refund amount.
No order as to costs.
File be consigned to record room.