Maharashtra consumer commission orders Mumbai builder to refund Rs 1.95 crore to two Jamshedpur buyers

The Maharashtra consumer commission has ordered a Mumbai real estate company to refund Rs 1.95 crore to two buyers from Jamshedpur. In the case of a stalled housing project in Mumbai, the commission found deficiency in service and unfair trade practice. It also directed the builders to pay Rs 1.5 lakh jointly as compensation and litigation costs.

The bench comprised presiding member Poonam Maharshi and member Nisha Amol Chavan. The bench said builders cannot hold on to buyers' hard-earned money and fail to deliver flats within a reasonable time.

According to the complaint, the two Jamshedpur residents had booked a 1,941 sq ft flat in Dadar East, along with two car parking spaces, at an agreed total price of Rs 9.94 crore. Between August and October 2014 they received an allotment letter under a 30:70 payment plan. They paid Rs 1.95 crore, which included an initial booking amount of Rs 25 lakh.

The buyers alleged that although they had met the initial payment terms, the builders delayed construction by more than a year. They said talks were under way to change the payment schedule to a construction-linked plan, but the builders kept demanding money according to the old plan.

In September 2016, the builders sent a pre-termination notice threatening to cancel the booking and forfeit the amount paid. Citing unfair demands and slow construction, the buyers cancelled the booking in October 2016 and sought a full refund. The builders are alleged to have kept sending demand letters and harsh letters instead of returning the money.

The builders opposed the complaint, saying the dispute began in 2016 and the complaint was therefore time-barred. The commission rejected the objection. It noted that the builders had sent a fresh demand letter in January 2022, which meant they treated the deal as still subsisting.

The commission said that keeping buyers' money without delivering possession is a continuing wrong. It also said the complaint was filed within two years of the end of earlier legal proceedings pursued in good faith. Given the continuing demands, it held the complaint to be within the limitation period.

The buyers had also begun criminal proceedings. The Jharkhand High Court and the Supreme Court eventually dismissed them, but kept the buyers' civil remedies for recovery of the money open.

Citing Supreme Court judgments, the commission said that retaining buyers' hard-earned money without giving possession is an unjust gain. The commission said, "When a builder does not deliver possession within a reasonable time or sits on a large amount of public money and stalls the work, it is clearly a deficiency in service and an unfair trade practice."

On this basis the commission directed the builders to jointly refund the principal amount of Rs 1.95 crore. It also asked them to pay Rs 1.5 lakh as compensation and litigation costs.