NCDRC asks developer to refund homebuyers excess amount taken for 'revised saleable area'

The National Consumer Disputes Redressal Commission (NCDRC) has asked a Gurugram-based developer Experion Developers Pvt Ltd to refund excess money collected from the homebuyers in a luxury project after showing an increased saleable area.

Lawyers representing the homebuyers alleged that the developer collected excess money to the tune of about Rs 50 crore from 500 homebuyers in the Windchants project.

"The developer is directed to refund the amount collected towards the excess sale area within six weeks from the date of the order. The developer is directed to pay a sum of Rs 50,000 towards the cost to each of the complainants," the order dated January 16, 2023, said.

The NCDRC referred to another 2020 order passed by the Commission regarding the excess sale deed in the same project that clarified that any change of the original plan in the residential project should be approved by the competent authority and the developer has to produce a revised plan. However, in this case, the developer has not done it.

The 2020 order quoted by the January 16 judgement said, "The justification given by the developer based on the internal report of the architect that demand was made for the excess area is not acceptable because no such report or any document has been submitted by the developer to prove the excess area."

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The case

Delayed for about 2-3 years, the project was supposed to be handed over from 2015 onwards. However, in 2017, the developer, in a written communication, asked the homebuyers to pay an excess amount for an increased saleable area.

"With the project reaching the handover stage we have got clarity on the overall areas and the subsequent impact on your respective unit. As per the said calculation, the sale area of your apartment has increased by 204 square feet (sq ft) and the revised area of your unit is 439 sq ft," a letter dated April 4, 2017, accessed by Moneycontrol shows.

The saleable area of an apartment is the carpet area of each apartment along with the common amenities offered.

The project in consideration is a luxury project with apartments priced at Rs 2 crore to Rs 5 crore.

The developer had collected about Rs 76 lakh from the six homebuyers who filed the NCDRC complaint. The excess amount charged for each homebuyer goes from Rs 8 lakh to Rs 20 lakh.

Advocate Chandrachur Bhattacharyya, who represented the homebuyers claimed, "Considering 500 homebuyers, the developers have taken at least Rs 50 crore in excess."

After several internal discussions, the homebuyers decided to move to the NCDRC court in 2022.

The complaint has two original buyers and four subsequent allottees who bought the apartment from the other buyers through a resale.

NCDRC finding

The court noted the homebuyers' statement that after the initial communication in 2017, the developer produced an architect's certificate by D-Idea Architect and a report by Knight Frank confirming the increase in saleable areas. However, no documents were filed in the court in the 2020 and 2022 cases.

The court quoted the Commission's 2020 judgment and said, "In respect of the excess area, the homebuyers have made a point that without any basis the developer sent the demand for the excess area and the certificate of the architect was sent to them, which is of a later date."

The NCDRC order further quoted, "This is a common practice adopted by a majority of developers which is basically an unfair trade practice."

"This has become a means to extract money from the allottees at the time when the allottee cannot leave as his substantial amount is locked in the project," the Commission's 2020 judgment stated.

Bhattacharyya claimed, "The initial communication had no materials to support the sudden increase in the saleable area. In fact, we found that carpet area for each homebuyer remained the same even after the change communicated by the developer."

The NDRC said the developer had challenged the 2020 order in the Supreme Court, and the petition seeking the review of the commission's order was dismissed by the apex court in 2022.

Complaints can be filed after conveyance deed execution

The developer maintained that the conveyance deed, which mentions the excess sale area, has been signed by each of the homebuyers without any "protest" and therefore the complaint is not maintainable.

However, NCDRC referred to the Supreme Court judgment of Arifur Rahman Khan vs Dlf Southern Homes Pvt Ltd in 2020 that upturned another NCDRC judgment and clarified, "We are unable to subscribe to the view of NCDRC that flat purchasers who obtained possession or executed deeds of conveyance have lost their right to claim compensation for the delayed handing over of the flat."

Thus, the NCDRC court in this matter directed the developer to execute Supplementary Correction Deeds in favour of the homebuyers within six weeks from the order date.

Rights of subsequent allottees

Himanshu Dewan, a marketing professional, bought the apartment in the project through a resale in September 2020 investing about Rs 3 crore.

"However, I fought for the rights of the original owner of the apartment even after they are no longer parties to the agreement signed with the developer," he added.

The NCDRC referred to the Supreme Court case of Laureate Buildwell Pvt Ltd vs Charanjeet Singh in July 2021, which clarified that subsequent allottees can take over the obligations of the original buyers.

"The contention of the developer that four homebuyers being subsequent purchasers are not 'consumers' have been rejected," the commission concluded.

Bhattacharyya said, "This is a fairly fresh apex court order and paints a larger picture that even after the resale of an apartment, the subsequent homebuyers still have similar rights as the previous buyers in their apartments." They can fight for their own rights at consumer courts or civil courts, he added.

A list of queries has been sent to the developer and Moneycontrol will update the story after receiving a response.