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Judgment
A complaint was filed in FORM 'M' on [Date] by Smt. Nirmala Gera (hereinafter referred to as "Complainant") under Section 31 read with Section 18 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as "RE(RD) Act, 2016" or "the Act") stating that she booked three commercial units in the proposed commercial project "Delhi Mall" promoted by M/s Raheja Developers Limited (hereinafter referred to as "Respondents"), through agent Mr. Sufiyan of A2 Team, and paid a total of Rs. 16,67,007/- (Rupees Sixteen Lakhs Sixty-Seven Thousand and Seven Only).
The Complainant was allotted three commercial spaces/shops bearing Unit Nos. (i) 001-37, Ground Floor, (ii) 325, 326-17, Third Floor, and (iii) 323, 324-24, Third Floor (hereinafter referred to as "the units") in the project of the Respondent namely "The Delhi Mall, Commercial Complex" situated at Patel Road, New Delhi-110008, registered under RERA No. DLRERA2018P0013. The total cost of the units was Rs. 1,67,82,558/- (Rupees One Crore Sixty-Seven Lakhs Eighty-Two Thousand Five Hundred and Fifty-Eight Only).
The Complainant made payments as follows:
Booking amounts of Rs. 31,000/- each for three shops on 3rd, 5th, and 6th March 2024 respectively (Total: Rs. 93,000/-) through Debit card and UPI via agent Sh. Sufiyan (Respondent No. 2).
Subsequent payments of Rs. 5,24,669/- vide RTGS dated 11.03.2024 and 18.03.2024.
Total amount paid: Rs. 16,67,007/-.
On 20.03.2024, the Complainant received an email from the agent Sh. Sufiyan, containing discrepancies in the allotment details, wherein the location of the booked units was incorrectly stated as two shops on the ground floor and one on the third floor, whereas the actual booking was for one shop on the ground floor and two on the third floor.
Upon discovering this discrepancy and becoming aware of various irregularities, misrepresentations in the project advertisements, and concerns about construction quality and project viability, the Complainant immediately sought cancellation of the booking and refund of the amount paid vide email dated 20.03.2024 as well as compensation.
Despite receiving acknowledgment and assurances from the Respondents regarding processing of the refund, including an email dated 29.01.2025 requesting bank details for refund processing, no refund was made to the Complainant.
During the pendency of the complaint, the Respondents refunded Rs. 5,24,669/- (Rupees Five Lakhs Twenty-Four Thousand Six Hundred and Sixty-Nine Only) on 07.05.2025 for one unit, leaving a balance of Rs. 11,42,338/- for the remaining two units.
A preliminary hearing in the case was held on 08.10.2024. Notice to the Respondents was issued through post and email.
The matter was subsequently heard on multiple dates. The Respondents filed their written statement, and the Complainant filed a rejoinder. Subsequently, both parties filed written submissions/synopsis.
For the sake of convenience, the submissions and arguments made on behalf of the Complainant are as follows:
a. The Complainant submitted that she was fraudulently induced to invest in the project through misleading advertisements and false representations made by the Respondents. The project was marketed as a Public-Private Partnership (PPP) project with Delhi Development Authority (DDA) and Government of India, with false claims including:
the project was situated in the "heart of Central Delhi" when it actually falls in West Delhi.
there were no shopping malls within a 5 km radius, which was demonstrably false.
the project was 60% complete and would be inaugurated soon.
the scheme was oversubscribed and booking would close in March 2024, whereas it was subsequently extended till June 2024.
b. Upon visiting the site, the Complainant found that construction quality did not meet promised standards, progress was extremely slow, and the project appeared unlikely to be completed within the stipulated timeframe.
c. The Respondents violated various provisions of the RERA Act, 2016, including failure to provide complete and accurate information on the project website; use of unregistered agents for marketing and sales; misleading advertisements and prospectus containing false statements; non-adherence to building bye-laws; and; failure to update project status and quarterly reports.
d. Despite payment of 10% of the total consideration, no Agreement for Sale was executed between the parties. The Complainant was pressured to sign the application form without being allowed to read it properly, and no formal agreement was ever provided for execution.
For the sake of convenience, the submissions and arguments made on behalf of the Respondents are as follows:
a. The Respondents denied all allegations of fraud, misrepresentation, and unfair trade practices, claiming that all necessary information was provided to the Complainant and the booking was made voluntarily.
b. The Respondents relied on various clauses of the Application Form, particularly:
Clause 15, which provides for forfeiture of 10% of the total consideration value in case of cancellation by the allottee without fault of the promoter.
Clause 18, which makes timely payment the essence of the contract and provides for deduction of booking amount in case of cancellation.
c. The Respondents submitted that the error in the allotment details was immediately rectified by issuing a clarification letter, and therefore cannot be a ground for cancellation. The Respondents contended that they have the right to modify layout plans and the Complainant had signed an undertaking acknowledging this right.
d. Since the total amount paid by the Complainant (Rs. 16,67,007/-) represents approximately 10% of the total consideration (Rs. 1,67,82,558/-), and the Complainant sought cancellation without any fault on the part of the Respondents, the entire amount paid constitutes forfeitable booking amount and no refund is due.
e. The Respondents submitted that they have already refunded Rs. 5,24,669/-on 07.05.2025, demonstrating their bona fides.
ANALYSIS AND CONSIDERATION
The complainant has claimed compensation and sought refund as well. At the very outset, it is pertinent to shed light on the issue whether damages and compensation can be granted by the Authority. The Hon'ble Apex Court in the case of M/s. Newtech Promoters and Developers Pvt. Ltd vs. State of UP & Ors. (CIVIL APPEAL NO(S). 6745 6749 OF 2021) has categorically held, "when it comes to a question of seeking the relief of adjudging compensation and interest thereon under Sections 12, 14, 18, and 19, the adjudicating officer exclusively has the power to determine, keeping in view the collective reading of Section 71 read with Section 72 of the Act." It is thus clear that the Authority does not have the power to grant the relief of compensation under Section 18 of the Act. As per Section 71, the complainant may approach the Adjudicating Officer for the grant of compensation. In view of the same, we are not considering the relief as to compensation in the present order.
The Statement of Objects and Reasons of the Real Estate (Regulation and Development) Act, 2016 clearly states that it attempts to balance the interests of allottees and promoters by imposing certain responsibilities on both. It seeks to establish symmetry of information between promoters and allottees, enhance transparency of contractual conditions, set minimum standards of accountability, and provide a fast-track dispute resolution mechanism.
The Act was introduced because the Real Estate sector was unregulated and lacked professionalism, standardization, and adequate consumer protection. The Act, therefore, aims at regulation and promotion of the Real Estate sector, uniformity and standardization of business practices and transactions, transparency in sale and contractual conditions, and protection of consumer interests.
The Act lays down the parameters of contractual conditions and standardizes business practices in the real estate sector. Therefore, contractual conditions and financial transactions in the Real Estate sector are 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 allottee and the promoter must conform to the provisions of the Real Estate (Regulation and Development) Act, 2016.
A perusal of the documents available on record reveals that no Agreement for Sale has been executed between the parties. The Complainant had paid Rs. 16,67,007/-, which constitutes approximately 10% of the total consideration of Rs. 1,67,82,558/-, but admittedly had not signed any Agreement for Sale with the Respondents.
Since no Agreement for Sale has been executed between the parties, the matter must be examined in light of Rule 20 of the Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016, which provides:
"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 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."
Rule 20 of the Rules, 2016 therefore clearly provides that until the Agreement for Sale has been executed between the parties, the promoters cannot forfeit earnest money or booking amount. The provision mandates that in case the allottee fails to execute the Agreement for Sale within the stipulated time after notice, all sums deposited including the booking amount shall be returned to the allottee without interest or compensation.
The Respondents, to avoid such a situation, should have acted diligently after booking was made by the Complainant to get the Agreement for Sale executed. However, despite receiving around 10% of the total consideration, the Respondents failed to provide the Agreement for Sale for execution by the Complainant.
The Complainant has stated in her complaint and submissions that she was not provided with the Agreement for Sale for execution, and was pressured to sign the application form in haste without being allowed to read it properly. The Respondents have not provided any evidence to show that they forwarded the Agreement for Sale to the Complainant for execution and that the Complainant failed or refused to execute the same.
Moreover, Clause (2) of Rule 3 of the (Agreement for Sale) Rules, 2016 provides that the rights of the allottees shall not be limited by any document signed prior to the execution of Agreement for Sale, stating:
"(2)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."
This provision clearly protects the rights of allottees from being curtailed by terms and conditions in application forms or allotment letters signed before execution of the Agreement for Sale. The forfeiture clauses relied upon by the Respondents in the Application Form cannot override the statutory protection provided under Rule 3(2) read with Rule 20 of the Rules, 2016.
The National Capital Territory (NCT) of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules 2016 provides that even the 'Agreement for Sale' will not have any binding effect unless it is signed and registered. In case of failure of the allottee to sign the 'Agreement for Sale' and appear for registration of the same before the Sub-Registrar, the promoter has to give notice to the allottee and if within 30 days of receipt of this notice the allottee doesn't rectify the default, then the booking amount shall be returned to the allottee but it will be without any interest or compensation whatsoever.
A collective reading of Clause (2) of Rule 3 and Rule 20 of the National Capital Territory (NCT) of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules 2016 shows that an allottee has the right to cancel or withdraw from the allotment prior to execution of the Agreement for Sale. 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 unit. The rights and interests of the allottees will be protected by the Act or the Rules or the Regulations made thereunder.
The scheme of the RE(RD) 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, envisages that:
a. In cases where the Agreement for Sale has not been executed, the allottee is entitled to withdraw from the project and is entitled to refund of the amount paid.
b. In cases where the allottee has executed the Agreement for Sale but decides to withdraw from the project subsequently without any fault of the promoter, then the promoter shall be entitled to forfeit the booking amount paid by the allottee.
Since in the present case no Agreement for Sale has been executed between the parties, the Complainant is entitled to withdraw from the project and claim refund of the entire amount paid. The perusal of the terms in the application form would show that they are loaded in favour of the promoter and seek to deprive the allottee of statutory rights conferred under the Act and Rules.
The Hon'ble Supreme Court in the case of "Pioneer Urban Land and Infrastructure Ltd. Vs Govindan Raghavan" has observed that a term of the contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder.
For this reason, also the argument of the Respondents that the amount paid by the Complainant has been forfeited in terms of the stipulation of the application form cannot be accepted and is hereby rejected.
This Authority notes that in the case of Manju Gupta Vs Raheja Developers Pvt. Ltd. (COM/02/09/2024) involving the same project "Delhi Mall" and the same Respondents, this very Authority vide Final Order dated 16.07.2025 has dealt with a similar issue. In that case, this Authority, after detailed analysis of the statutory provisions, held that in the absence of executed Agreement for Sale, the application form cannot have binding effect to enforce forfeiture clauses, and directed the Respondents to refund the entire amount of deposited by the Complainant.
Based on the above analysis and consideration, this Authority makes the following findings:
a. No Agreement for Sale has been executed between the Complainant and the Respondents despite payment of around 10% of the total consideration.
b. In the absence of executed Agreement for Sale, the forfeiture clauses in the Application Form cannot override the statutory protection provided under Rule 3(2) read with Rule 20 of the Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016.
c. Rule 20 of the Rules, 2016 clearly provides that in the absence of executed Agreement for Sale, all sums deposited by the allottee including the booking amount shall be returned to the allottee without any interest.
This Authority notes that out of the total amount of Rs. 16,67,007/- paid by the Complainant, the Respondents admittedly have already refunded Rs. 5,24,669/- on 07.05.2025. Therefore, the balance amount payable to the Complainant is Rs. 11,42,338/- (Rupees Eleven Lakhs Forty-Two Thousand Three Hundred and Thirty-Eight Only).
In view of the above findings and analysis, this Authority hereby directs the Respondents, ‘M/s Raheja Developers Limited’ to refund the balance amount of Rs. 11,42,338/- (Rupees Eleven Lakhs Forty-Two Thousand Three Hundred and Thirty-Eight Only) to the Complainant (Smt. Nirmala Gera) within 45 (forty-five) days from the date of issuance of this order.
In case the Respondents fail to pay the refund within the stipulated time, they shall pay interest on the said amount of Rs. 11,42,338/- at the rate of 10.80% per annum (MCLR+2%) till the date of actual payment to the Complainant.
The complaint is disposed of accordingly.
No order as to costs.