Consumer Wins Refund and Interest in Landmark Real Estate Dispute.


18 November 2024 Property Law >> Civil & Consumer Law   |   Consumer Protection Act >> Consumer Rights  

In a significant ruling for consumer rights, the National Consumer Disputes Redressal Commission (NCDRC) in the matter of Vivek Gulati & Another Vs Realtech Developments & Infrastructure India Pvt. Ltd., New Delhi & Others., has ordered real estate developers Realtech Developments and Infrastructure (India) Pvt. Ltd. and Homestead Infrastructure Development Pvt. Ltd. to refund substantial amounts with interest to aggrieved homebuyers. This decision stemmed from two related complaints, 1434 of 2018 and 1435 of 2018, both initially filed in Delhi but subsequently addressed by the NCDRC due to jurisdictional issues.

The core of the dispute revolved around the developers' failure to deliver promised residential units and execute necessary agreements, despite receiving significant payments from the complainants. The lead case, complaint no. 1434 of 2018, highlighted that the complainants had booked a 2800 sq. ft. residential unit for a total consideration of Rs. 3,50,00,000, paying Rs. 58,79,841 in installments.


 

 

According to the complainants, after making the payments, they received no concrete progress on the project. Despite repeated inquiries via email regarding the status of construction, allotment letters, and the flat buyer’s agreement, the developers failed to provide satisfactory responses. Furthermore, the excavation work hadn't even commenced. Frustrated by the lack of progress and response, the complainants sought cancellation of their booking and a refund with 18% interest, a request that was ignored by the developers.

The NCDRC, presided over by the concerned authority, noted that the developers failed to appear despite receiving notices, leading to an ex-parte proceeding. The complainants presented evidence, including payment receipts and emails, demonstrating their payments and the developers' lack of action.

The Commission's ruling emphasized the developers' deficiency in service. They had held the complainants' money for nearly ten years without delivering the promised units or executing the necessary agreements. Citing precedents from the Supreme Court, including M/s Nexgen Infracon Pvt. Ltd. Vs Manish Kumar Sinha and DLF Homes Panchkula Pvt. Ltd. vs. D.S. Dhanda, the NCDRC ordered the developers to refund the entire amount of Rs. 58,79,841 with a 9% interest rate per annum from the respective dates of deposit until realization. Failure to comply within eight weeks would result in an increased interest rate of 12% per annum. Additionally, the developers were directed to pay Rs. 50,000 as litigation costs.

Complaint no. 1435 of 2018, which was initially dismissed as withdrawn due to jurisdictional issues, was also addressed in line with the lead case, ensuring consistency in the ruling.

This decision underscores the NCDRC's commitment to protecting consumer rights and holding developers accountable for their commitments. The ruling serves as a vital precedent for future consumer disputes within the real estate sector, reinforcing the importance of timely delivery and transparent communication between developers and homebuyers.


Section 21, Consumer Protection Act - 1986  

Consumer Protection Act, 1986