NCDRC Rules Buyers Entitled to Refunds for Delays and Cancellations

Buyers Entitled to Refunds for Delays and Cancellation of Allotments: NCDRC

August 9, 2024

The National Consumer Disputes Redressal Commission, led by Subhash Chandra and AVM J. Rajendra, found Big Banyan Roots at fault for service deficiencies and affirmed that buyers are entitled to a refund in cases of delays or cancellations of allotments.

Case Summary:

The complainant purchased an apartment, including an undivided share in the property, from Big Banyan Roots, agreeing to pay Rs. 80 lakhs for the land under a sale and construction agreement. The builder promised to deliver possession of the flat by a specified date, with an additional six-month grace period. The complainant paid Rs. 75,58,000 via cheque, which was acknowledged by the builder. However, the builder failed to deliver the flat, citing various excuses and repeatedly postponing the possession date, leading to intentional delays. When the complainant sought a refund, the builder provided false assurances and did not return the payment. Displeased, the complainant filed a case with the State Commission of Karnataka, which partially upheld the complaint, ordering the builder to refund Rs. 75,58,000 plus 18% interest. The builder then appealed to the National Commission.

Builder’s Arguments:

The builder claimed the State Commission’s ruling breached natural justice principles, arguing that the complainant had used an outdated address in the complaint, despite the builder having updated their address two years prior. The builder also stated that the contract had been terminated at the complainant’s request via email, and that the complainant had not settled accounts. The builder offered to refund Rs. 40,79,000 but noted that the complainant had already withdrawn Rs. 61,57,876, exceeding the entitled amount.

National Commission’s Observations:

The National Commission noted the builder’s clear delay in delivering the flat and the subsequent cancellation of the allotment. The builder was thus obligated to refund the amount paid by the complainant. Referring to the Emmar MGF Land Ltd. & Ors. Vs. Amit Puri case, the Commission upheld the complainant’s right to either accept possession or seek a refund with reasonable compensation after the promised delivery date. Regarding interest rates on refunds, the Supreme Court’s ruling in Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor stipulated that interest should be compensatory and payable from the date of deposit. The previous 18% interest rate was considered inadequate, so the National Commission adjusted it to 9% per annum.

The Commission revised the State Commission’s order, directing the builder to refund Rs. 75,58,000 with 9% annual interest and an additional Rs. 30,000 for litigation costs.

Posted and reproduced in Public Interest by

Adv. Sulaiman Bhimani Legal Consultant

Expert in RERA & Consumer Matters, Co-operative Scty Matters,

Deem Conveyance, Family Matters, and Property Disputes.

Human and Civil Rights Campaigner

President Citizens Justice Forum https://citizensjusticeforum.in