Mumbai Realty Firm Ordered to Refund ₹1.95 Crore to 2 Buyers Over Construction Delay

PROPERTY PULSE

Mumbai: Homebuyers who pay large amounts for apartments but face delays in possession or other issues can take legal action against developers. Reaffirming this, a consumer commission has directed a Mumbai-based real estate developer to refund ₹1.95 crore to two homebuyers, along with interest and compensation.

The two buyers, who belong to Jamshedpur in Jharkhand, had booked a 1,941 sq ft apartment in the ‘Two ICC’ project at Dadar East in Mumbai. They had also booked two car parking spaces. The total agreement value of the apartment and parking spaces was ₹9.94 crore.

The developer issued allotment letters between August and October 2014. Under a 30:70 payment plan, the buyers initially paid ₹25 lakh as a booking amount. They subsequently paid a total of ₹1.95 crore in instalments. However, the buyers alleged that despite making payments on time, the construction did not progress as scheduled.

They claimed that the project was delayed by more than a year. In view of the construction delay, the buyers requested a change in the payment schedule. Instead of the original 30:70 plan, they proposed making payments based on the actual progress of construction.

However, while discussions were underway, the developer insisted that payments should continue under the original schedule. In September 2016, the developer issued a pre-termination notice, warning that the apartment allotment would be cancelled and the amount already paid would be forfeited if the outstanding dues were not cleared.

The buyers subsequently cancelled their booking in October 2016 and demanded a refund of the ₹1.95 crore they had paid. However, instead of refunding the money, the developer continued sending payment demands. This forced the buyers to take legal action.

Also Read: Buyer Denied Additional Compensation for Delayed Flat Possession

Consumer Forum Proceedings

The buyers initially pursued criminal proceedings over the dispute. However, the Jharkhand High Court quashed the criminal proceedings, and they also faced a setback before the Supreme Court. Nevertheless, the Supreme Court clarified that the buyers were free to pursue civil legal remedies to recover their money.  Following this, they approached the Maharashtra State Consumer Disputes Redressal Commission.

The developer argued that the complaint was time-barred because the dispute had originated in 2016. However, the commission rejected this argument. It pointed out that the developer had issued another payment demand letter in January 2022.

This indicated that the transaction between the parties was continuing, the commission observed. After hearing both sides, the commission ruled in favour of the homebuyers.

It directed the developer to:

• Refund the principal amount of ₹1.95 crore
• Pay 9% annual interest on each instalment from the respective date of payment until the refund is made
• Pay ₹1 lakh as compensation for mental agony, harassment and deficiency in service
• Pay an additional ₹50,000 towards legal expenses
• The ruling once again highlights that homebuyers can seek legal remedies when developers fail to honour their contractual obligations

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