Court Orders Refund for Flat Buyer in Dispute with Builder.
05 June 2024
Consumer Protection Act >> Consumer Rights | Property/Real Estate Law >> Property & Real Estate
A consumer court has ruled in favor of a flat buyer who did not receive possession of his apartment due to delayed construction and a payment dispute. The builder is required to refund the buyer's entire deposit with interest, minus a 10% deduction as forfeiture.
The Case:
The dispute involved Bipin Gupta, a flat buyer, and M/s TDI Infrastructure Ltd., the builder. Mr. Gupta had paid Rs. 17,34,768 towards a flat in the builder's project "TDI City." However, he did not receive possession due to delays in construction and disagreements over the payment schedule. The builder ultimately cancelled Mr. Gupta's allotment and withheld the paid amount.
Court's Findings:
The court acknowledged that the buyer and builder had a signed agreement with a payment plan linked to construction milestones. As per the agreement, timely payments were critical. The court upheld the builder's cancellation of the allotment due to the buyer's non-payment.
However, the court found fault with the cancellation process. The agreement mandated the builder to return the remaining balance after deducting the 'earnest money' upon cancellation. In this case, the builder failed to fulfill this obligation.
Court Order:
The court partially allowed the appeal filed by the builder. While the cancellation of the allotment was deemed valid, the court ordered the builder to return the entire amount deposited by Mr. Gupta. The refund will include an annual interest of 9% calculated from the date of each deposit until the refund is completed. The builder can deduct 10% of the basic sale price as 'earnest money' before returning the remaining amount. Importantly, the court mandated the completion of the refund process within two months from the judgement date.