The Maharashtra State Consumer Disputes Redressal Commission has directed a real estate developer to refund more than Rs 1.95 crore to two homebuyers after finding that their money had been retained without the promised delivery of a residential property. The commission also ordered the company to pay Rs 1 lakh as compensation for mental harassment and deficiency in service, along with Rs 50,000 towards legal expenses.
A bench comprising Presiding Member Poonam V Maharshi and Member Nisha Amol Chavhan observed that withholding buyers’ funds without handing over possession amounted to a “continuing wrong”. In its November 3 order, the commission stated: “Retention of the complainants’ hard-earned money without delivery of possession constitutes a continuing wrong. Hence, the complaint filed within two years of the culmination of prior bona fide legal proceedings and continuing demands is well within limitation,”
The dispute concerns a residential project at Island City Centre in Dadar (East), Mumbai. The complainants had booked a 1,941 sq. ft. apartment with two parking spaces in 2014 for a total consideration of Rs 9.94 crore. They initially paid Rs 25 lakh in August that year and subsequently deposited more than Rs 1.95 crore under a 30:70 payment arrangement.
According to the buyers, construction was delayed by over a year despite their meeting the payment milestones. Discussions followed regarding a shift to a construction-linked payment schedule. However, the developer allegedly continued raising demands under the original plan and issued a pre-termination notice in September 2016, threatening cancellation and forfeiture.
The buyers eventually cancelled the booking and sought a refund of approximately Rs 1.94 crore. The developer, meanwhile, argued that the dispute arose from payment defaults and maintained that the booking terms permitted forfeiture of 19% of the consideration or the amount paid, whichever was lower.
Rejecting the developer’s reliance on standard forfeiture provisions, the commission held that the buyers were entitled to a refund with appropriate interest and compensation. It observed that failure to deliver possession within a reasonable period, while retaining substantial payments, amounted to deficient service and an unfair trade practice.
Source: The Indian Express
