AI Structured Summary
Not yet generated for this judgment
Judgment
A complaint was filed in Form ‘M’ on 20.06.2025 bearing Complaint No. COM/15/06/2025 by Vandana Goyal Family Trust (hereinafter referred to as the “Complainant”) under Section 31 of the RE (RD) Act, 2016, stating that the Complainant had booked a 2 BHK apartment bearing No. OMB2708 in the project “ONE Midtown” promoted by DLF Urban Private Limited (hereinafter referred to as the “Respondents or Respondent Company”) at 15, Shivaji Marg, New Delhi-110015.
The Complainant alleged that, upon the launch of the said project, the Complainant approached the Respondent Company and submitted an Application Form for allotment of the said apartment. The Complainant further alleged that, despite repeated requests for registration of the Agreement for Sale (AFS), the Respondent Company failed to respond satisfactorily or take steps for its registration. The Complainant accordingly approached this Authority seeking a restraint against cancellation of the allotment of Apartment No. OMB2708, and against imposition of any delayed payment charges, interest, or penalty during the pendency of the proceedings.
It is averred that the Complainant paid a sum of Rs. 35,21,434/- (Rupees Thirty-Five Lakhs Twenty-One Thousand Four Hundred Thirty-Four Only) towards the purchase of the said apartment, comprising Rs. 10,00,000/- (Rupees Ten Lakhs Only) on 16.03.2022 towards the part booking amount, and Rs. 25,21,434/- (Rupees Twenty-Five Lakhs Twenty-One Thousand Four Hundred Thirty-Four Only) on 29.08.2022 towards the second instalment of booking amount, as evidenced by the receipts issued by the Respondent Company.
A preliminary hearing in the case was held on 21.07.2025. Notice of the complaint was issued to the Respondent Company on 12.08.2025. The Respondent Company filed their reply on 30.01.2026. The Complainant filed the rejoinder to the said reply on 15.05.2026.
For the sake of convenience, the arguments and submissions made on behalf of the Complainant are summarised as under:
a. The Complainant had booked five apartments, including Apartment No. OMB2708, in the “ONE Midtown” project, for a cumulative consideration of Rs. 75,21,434/-. The agreed rate of Rs. 19,500/- per sq. ft., inclusive of Preferential Location Charges (PLC), was intentionally left blank in the Application Form by the Respondent Company’s accounts head, rendering the incomplete Application Form non-binding.
b. The Respondent Company acted with malafide intent by incorporating a higher rate of Rs. 40,345.02 per sq. ft., exclusive of PLC, in the draft AFS.
c. The Complainant is ready and willing to perform its part of the contract by paying the balance amount at the agreed rate of Rs. 19,500/- per sq. ft., inclusive of PLC.
d. The Respondent Company’s claim that the unit was cancelled in November 2022 and subsequently re-allotted on 04.07.2023 is false and frivolous.
e. The Complainant sent letters dated 12.05.2025 and 22.05.2025 to the Respondent Company seeking registration of the AFS, which were duly received but ignored, prompting the filing of the present complaint on 15.06.2025.
The Complainant has accordingly sought a direction to the Respondent Company to execute and register AFS in respect to Apartment No. OMB-2708, Tower/Building B, 27th Floor, having a carpet area of 81.09 sq. mtrs., in “ONE Midtown” situated at 15, Shivaji Marg, New Delhi-110015, in its favour, along with costs/compensation, and a restraint against cancellation of the allotment and imposition of penalties.
For the sake of convenience, the arguments and submissions made on behalf of the Respondent Company are summarised as under:
a. The complaint is not maintainable, having been filed by the Vandana Goyal Family Trust without annexing a valid trust deed, board resolution, or power of attorney. The Complainant is guilty of suppressing the material fact of cancellation of the allotment.
b. The Complainant was a habitual defaulter who delayed payment of the second instalment by over four months. The due date for the said instalment was 15.04.2022, whereas payment was made only on 29.08.2022, after reminders issued on 18.04.2022, 24.04.2022 and 02.05.2022.
c. Upon receipt of 10% of the total price, the Respondent Company forwarded the AFS for execution on 08.09.2022. The Complainant returned the signed copy without protest but failed to take any steps for its registration, inspite of reminders dated 18.10.2022 and 21.11.2022.
d. A final notice was sent to them on 24.11.2022 granting 10 days to register the AFS, failing which the allotment would stand cancelled and the booking amount forfeited. The said notice was duly served upon the Complainant by speed post as well as by email dated 28.11.2022. Owing to the Complainant’s continued failure to act, the allotment was cancelled and, the booking amount was forfeited. Since then, unit has been re-allotted to another buyer on 04.07.2023.
e. The project “ONE Midtown” has since received Completion-cum-Occupancy Certificates (OCC) on 19.05.2024 and 10.12.2024, with 676 allottees having completed formalities, 550 having taken possession, and 20 having registered sale deeds. The Complainant is a speculative investor who remained silent for over two and a half years before sending letters in May 2025, merely to create a record for filing the present complaint.
We have heard the arguments of the Learned Counsels for both parties and perused the records.
Analysis and Considerations
This Authority has carefully examined the facts and circumstances of the case, and the following issues emerge for determination:
a. Whether the cancellation of the allotment by the Respondent Company was justified under the contractual terms and statutory provisions.
b. Whether the Respondent Company is entitled to forfeit any amount from the payments made by the Complainant, particularly in light of the non-registration of the Agreement.
c. What is the appropriate relief to which the Complainant is entitled under the RE (RD) Act, 2016, and the Rules framed thereunder.
Primarily, this Authority shall confine its consideration in the present complaint to the unit in question, namely Apartment No. OMB2708, and the amount paid by the Complainant in respect of the said unit. As set out hereinabove, the said amount comprises of Rs. 10,00,000/- paid on 16.03.2022 towards the part booking amount, and Rs. 25,21,434/- paid on 29.08.2022 as balance booking amount, totalling to Rs. 35,21,434/- (Rupees Thirty-Five Lakhs Twenty-One Thousand Four Hundred Thirty-Four Only), which alone is being considered for the purposes of this order.
The present case necessitates a comprehensive analysis of the statutory framework under the Real Estate (Regulation and Development) Act, 2016, particularly Section 13, Section 88, Section 89, and Rule 20 of the Real Estate (Regulation and Development) Rules, 2017.
Section 13 of the RE (RD) Act, 2016 constitutes the cornerstone of the regulatory framework governing 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 the agreement for sale, 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 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 registering the said agreement for sale, under any law for the time being in force.
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 RERA provisions over inconsistent provisions in other statutes or instruments. This section establishes a clear hierarchy where RERA provisions 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 intent 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, thereby creating enhanced protection for allottees and greater accountability for promoters.
The effect of non-registration of an AFS under the RE (RD) Act, 2016 is significant. Under Section 49 of the Registration Act, 1908, documents required to be registered cannot affect immovable property unless registered.
However, under the specific regime of the RE (RD) Act, 2016, non-registration has more severe consequences. When an AFS is not registered as mandated under Section 13(1) of the Act, it not only fails to create enforceable rights for both the parties in the immovable property and renders very acceptance of advance payments unlawful. This creates a legal disability for the promoter to forfeit the any advance received. The failure to execute or register AFS allows allottees to get their advance back in case they are not satisfied with the conditions of AFS and Promoters to cancel the unit allotted after due notice (as prescribed under Clause 20 of the Model AFS attached as Annexure to Rule 3 of the National Capital Territory of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016 Rules, 2016) in case allottees do not come forward to register the AFS.
Clause 20 of the Model AFS attached as annexure to Rule 3 of the National Capital Territory of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016 deals with the binding effect of agreements and specifically addresses the consequences when agreements are not registered. This 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 AFS was forwarded by the Respondent Company to the Complainants for execution on 08.09.2022, which was returned duly signed by the Complainant, but 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 consequences prescribed under Clause 20 of the National Capital Territory of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016. The failure to register the Agreement, despite it being a mandatory statutory requirement, did not result in a binding contract between the Complainant and the Respondent Company.
The Respondent Company’s contention that it is 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 operates as a statutory override to any contract that may allow forfeiture or retention of amounts.
There exists a clear interplay between the rights and obligations of the promoter and the allottee under this statutory scheme. While Section 13 casts a duty on the promoter not to collect any sum exceeding ten per cent of the total price of the unit without a registered AFS, protecting allottees financial exposure, its Clause 20 operates as a balancing and safeguarding provision, enabling the promoter to cancel the allotment where the allottee fails to come forward to execute or register the AFS. Clause 20 also protects the interest of the allottees in case they do not agree to the terms and conditions of AFS and do not register or execute the AFS, by having the rights for refund without any deduction.
In the present case, while the Respondent Company was well within their right to cancel the allotment on account of the Complainant’s continuous failure to register of the AFS, they were equally obligated, upon such cancellation, to return the amount paid by the Complainant, which they failed to do. The retention of the Complainant’s money beyond the period stipulated in the final notice dated 24.11.2022 cannot, therefore, be sustained, and amounts to unjust enrichment on the part of the Respondent Company.
As regards the relief of registration of the Agreement for Sale sought by the Complainant, the same cannot be granted, since the allotment has already been cancelled in exercise of the Respondent Company right under Clause 20 after sufficient notices placed on record. The only relief that survives, therefore, is the return of the amount paid by the Complainant towards the unit in question.
It is, an admitted position that the Respondent Company forfeited the booking amount in terms of the AFS, which they were not entitled to, since, by virtue of Clause 20 of the AFS, it did not become binding upon the parties prior to its registration.
Accordingly, the Respondents are liable to refund the entire amount paid by the Complainant towards the unit in question, namely Rs. 35,21,434/- (Rupees Thirty-Five Lakhs Twenty-One Thousand Four Hundred Thirty-Four Only), together with interest. Such interest shall be payable with effect from 05.12.2022, being the day immediately following the expiry of ten days from the date of the final notice dated 24.11.2022, since it is from this date that the continued retention of the Complainant’s money ceased to be in accordance with the provisions of the Act. Interest is accordingly granted from the said date, to restitute the Complainant against the unjust enrichment of the Respondents.
FINDINGS AND CONCLUSION
Based on the aforesaid analysis, and considering the statutory provisions under the RE (RD) Act, 2016, and the Rules framed thereunder, this Authority arrives at the following findings:
a. The Agreement for Sale forwarded by the Respondents for execution on 08.09.2022 was never registered, as mandated under Section 13(1) of the RE (RD) Act, 2016.
b. Consequent to such non-registration, Clause 20 of the Model AFS prescribed under the National Capital Territory of Delhi Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016 became applicable, entitling the Respondents to cancel the allotment upon the Complainant’s continued failure to register the Agreement, but prohibiting the Respondents from forfeiting or retaining any amount paid by the Complainant.
c. The relief of execution and registration of title documents sought by the Complainant cannot be granted, the allotment having stood validly cancelled.
d. The Respondents are liable to refund the entire amount of Rs. 35,21,434/-(Rupees Thirty-Five Lakhs Twenty-One Thousand Four Hundred Thirty-Four Only) paid by the Complainant towards the unit in question, without any deduction, together with interest as held above.
In light of the above findings, this Authority holds that the Respondent Company’s forfeiture of the booking amount as legally unsustainable and contrary to the statutory provisions of the RE (RD) Act, 2016 and, directs the Respondents, DLF Urban Private Limited, to refund to the Complainant, Vandana Goyal Family Trust, the entire amount of Rs. 35,21,434/- (Rupees Thirty-Five Lakhs Twenty-One Thousand Four Hundred Thirty-Four Only) paid towards Apartment No. OMB2708, without any deduction, together with simple interest at the rate of 10.75% per annum (MCLR + 2%), calculated with effect from 05.12.2022 till the date of actual payment, within 45 (forty-five) days of the date of this order.
The case is disposed of accordingly.
No order as to costs.
File be consigned to the record room.