Court orders builder to return Rs 3 lakh with 9% interest after buyers cancel flat booking due to delayed construction

A consumer court in Nagpur has directed a real estate company to refund ₹3 lakh to a couple along with 9% interest from October 27, 2017. The Additional District Consumer Disputes Redressal Commission also ordered ₹30,000 compensation for mental harassment and ₹10,000 towards legal expenses. The order came after the couple cancelled their flat booking and did not receive their refund despite repeated assurances.

What the case was about

The couple, both medical practitioners, booked a flat costing ₹79.27 lakh in 2015 in a housing project on Besa-Pipla Road. They paid ₹1 lakh on October 27, 2015, and ₹2 lakh on February 29, 2016.

As per the complaint filed through counsel Ashish Fule, the construction got delayed and the couple cancelled the booking on July 7, 2017, citing "unavoidable circumstances." The developer allegedly assured repayment within three months from July 27, 2017, but did not refund the amount. The couple approached the consumer forum in 2019.

Builder’s argument

The real estate firm argued the cancellation was voluntary and not due to deficiency in service. It claimed the flat was nearly 85-90% complete, ready for possession, and the complainants defaulted in payment and did not execute the sale agreement. The firm also said the complaint was time-barred and only involved money recovery.

Court’s findings

Commission president Satish Sapre and member Milind Kedar rejected the builder’s arguments. They noted that there was no clause allowing the company to forfeit the booking amount.

The order stated, "The opposite party has not produced any evidence of actual loss or any clause permitting such forfeiture. Retaining the entire amount in the absence of written authorisation amounts to unjust enrichment."

The commission observed that non-refund after cancellation showed deficiency in service. It also held the complaint was filed within the two-year limitation period.

The real estate firm has been asked to refund the amount with interest and pay compensation within 45 days. The ruling reinforces that developers cannot hold consumers’ money without legal or contractual basis.

(Source TOI)