Consumer court orders realtors to refund principal of over Rs 1.5 crore to buyers with interest

A top consumer court has once again ordered real estate developers to refund the entire principal amount worth over Rs 1.5 crore, interest at the rate of 10 percent from the date of payment by the buyer and Rs 25,000 as cost of litigation to two homebuyers who had purchased properties in Gurugram.

In May, the National Consumer Disputes Redressal Commission (NCDRC) had ruled that homebuyers can seek full refund from real estate developers along with 10 percent interest if possession of their flats is delayed beyond one-year from the date of delivery. The Supreme Court also held in the past that buyers cannot be made to wait endlessly to take ownership of their flats.

In the first case, a homebuyer Kiran Chawla and her son Rahul Chawla had booked a residential apartment in a project with Orris Infrastructure Pvt and Three C Shelters Pvt, in a project namely Greenopolis, which they had to develop in  Sector – 89 of Gurugram. They had paid Rs 74.38 lakh to the builder.

The unit was allotted to them on August 28, 2012 and the apartment buyer agreement was executed between the parties on June 28, 2013.

The agreement envisaged completion of construction within 36 months, with a grace period of six months from the date of allotment.  The possession of the unit was due on February 28, 2016 after taking into account the benefit of the grace period to the builder.

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Possession has till date not been offered by the builder, who had argued that there was a state ban on construction and that force majeure conditions would apply. To this, the consumer court said the order by the Haryana High Court was only for not drawing ground water and not a ban on construction activity nor a ban on use of water.

In its order dated November 29, NCDRC noted that the developers could have “brought water from outside and should have used the same for construction activity… (they) should have  taken remedial measures. Once the apartment buyer agreement is signed between the parties, the opposite parties (builders) have to keep in mind the adverse situations that may arise and they should be ready to counter those conditions so that the complainant need not suffer for the same.”

In the second case that was heard by the NCDRC, buyer Anurag Pandey had booked a residential apartment in the same project and a unit was allotted to him on August 21, 2012. An apartment buyer agreement was executed on June 8, 2013. The possession was due on February 21, 2016. The total agreed consideration for the unit was Rs 1,05 crore and the buyer had already paid Rs 85 lakh to the builder, but is still awaiting possession.

The consumer court disposed of the two complaints by directing that Three C Shelters Pvt refund the entire principal amount of Rs 74,38,496 to the first buyer along with interest in the form of simple interest at 10 percent per annum from the date of the payment till the date of refund.

In the second case, it directed Orris Infrastructure to refund the entire principal of Rs 85,71,535 to the buyer along with 10 percent per annum simple interest from the date of the payment till the date of refund.

Both parties have been directed to pay Rs 25,000 as the cost of litigation to each of the buyers. The liability to pay the interest shall be joint as well as several, the order said.

The payments should be made within 45 days of the execution of the order, the court said.

“A stricter and uniform approach is now being taken by courts that if builders are unable to deliver flats within a reasonable time, they will have to refund the money paid by the consumers. In this case, the builder was unable to provide a tentative delivery date despite homebuyers pressing for possession,” said Aditya Parolia, the advocate who fought the case on behalf of the homebuyers.

Reports quoting Noida officials state that Vidur Bhardwaj, a director in defaulting realty firm 3C, has been arrested  by the Noida administration last week. The latter is now looking for Nirmal Singh, another 3C director, who is also absconding.

Three promoters had launched 3C -- Nirmal Singh, Supreet Singh and Vidur Bhardwaj. The company's Noida project launched under the Lotus brand is facing insolvency proceedings. It has two projects in Gurugram’s Sector 89 that are yet to take off.