Buyers who cancelled flat purchase to get full refund, MahaRERA tribunal directs developer

A Thane-based couple had booked a flat in a project at Mulund West. Representation pic/Pradeep Dhivar

In a landmark judgment by the MahaRERA appellate tribunal, a developer was ordered to pay a full refund of over Rs 18 lakh with interest to buyers who had cancelled the purchase of a flat. A Thane-based couple who had booked a flat in a Mulund-based project, had to cancel it as they needed money for a medical emergency. But the promoter of the project had claimed that since the couple had cancelled the purchase, they were not entitled to a refund with interest under the RERA Act.

The couple had booked a flat in the Olympia project by Nirmal developers located at LBS Marg, Mulund (W) on June 13, 2014. The promoter had issued a letter of intent on the same date. The promoter had also agreed to sell the flat for a total cost of Rs 87.96 lakh. The duo paid Rs 18.04 lakh to the promoter in return for a letter of allotment which was issued on the same day. The possession of the flat was assured by the promoter on or before December 31, 2017.

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What happened

On July 20, 2017, the couple informed the promoter by letter that they wanted to cancel the booking of the flat due to a medical emergency, and they need the booking money as soon as possible. They demanded the money paid to the developer with interest. The developer gave a form of ‘cancellation of booking' and handed over some post-dated cheques to them and asked them not to encash these for some time. As they did not respond about the cheques for some time, the couple approached the MahaRERA tribunal.

At the MahaRERA tribunal their plea was dismissed, as the promoter claimed they were not allottees on the date of filing the complaint, and the complainant is not maintainable to claim relief of refund with interest under section 18 of RERA. After this the family went to the MahaRERA appellate tribunal, Mumbai.

The observation and order

The appellate tribunal observed that the post-dated cheques were not encashed by them and the transactions didn't reach the logical conclusion, therefore on the date of filing the complaint, they were allottees and refund could be claimed with interest under section 18 of the RERA Act.

The appellate tribunal ordered that the promoter refund the amount of Rs 18,04,548 to the couple along with interest at the State Bank of India's highest marginal cost plus 2% lending charges from the date of payment of the said amount till its realisation.

"This is a landmark order. The appellate tribunal ruled in favour of the buyer directing the promoter to return their money with interest. This judgment will help flat buyers who have been denied refund with interest after they cancel the booking and are not recognised as allottees," said advocate Amita Chaware, who appeared for the complainant.

Despite repeated attempts to speak to them, there was no response from the firm handling the legal proceedings for Nirmal Developers.