Two homebuyers have secured a refund of approximately Rs 4.09 crore from Bombay Realty and The Bombay Dyeing & Manufacturing Co Ltd following a prolonged dispute over a delayed apartment in the Two ICC project at Island City Centre, Dadar East.
The Maharashtra State Consumer Disputes Redressal Commission directed both companies to jointly and severally pay the amount. The award covers the buyers’ principal deposit of Rs 1.95 crore, annual interest of 9 per cent from the respective payment dates, Rs 1 lakh for mental agony, harassment and deficiency in service, and Rs 50,000 towards legal expenses.
Jamshedpur-based buyers Raj Kumar Agarwal and Rahul Agarwal filed the complaint in August 2022. They had booked Flat No. 801, along with two parking spaces, for Rs 9.94 crore. An initial payment of Rs 25 lakh was made on August 29, 2014, followed by an allotment letter dated October 6 under a 30:70 payment arrangement.
The buyers alleged that construction fell behind schedule by more than a year despite their meeting the initial payment commitments. Discussions subsequently took place to shift to a construction-linked payment plan. However, they claimed that the developers continued raising demands under the original arrangement and issued a pre-termination notice on September 6, 2016, threatening cancellation and forfeiture.
The buyers cancelled the booking in October 2016 and requested a refund with interest. The developers declined to return the money.
Developers’ objections rejected
The companies argued that the complaint was filed beyond the limitation period, that the booking agreement’s arbitration clause barred consumer proceedings, and that the buyers’ payment defaults justified cancellation and forfeiture.
The commission dismissed these objections, holding that homebuyers cannot be made to wait indefinitely for possession. It observed that retaining substantial payments without delivering the property could constitute deficiency in service, unfair trade practice and unjust enrichment.
It also clarified that arbitration provisions do not exclude consumer remedies under Sections 3 and 100 of the Consumer Protection Act.
Earlier criminal proceedings initiated by the buyers were quashed by the Jharkhand High Court on December 9, 2021, and the Supreme Court dismissed their Special Leave Petition on May 13, 2022. However, the buyers retained the right to pursue civil recovery, leading to the consumer complaint.
The ruling reinforces developers’ responsibility to address prolonged delays and refund buyers’ money with reasonable interest when possession is not delivered within a reasonable period.
Source: Urban Acres
