MC Explainer: Can a homebuyer seek refund if the number of floors in a real estate project is reduced?

World One Tower in Central Mumbai is among the tallest towers of India. (Picture: Lodha Developers)

The National Consumer Disputes Redressal Commission (NCDRC) has directed listed real estate developer Macrotech Developers, also known as Lodha Group, to refund over Rs 11 crore to a homebuyer in Mumbai, who had a booking in the developer’s luxury project, called World One, in Central Mumbai.

The homebuyer sought a refund after the developer constructed only 89 floors instead of 117 floors in World One, advertised as one of the tallest towers globally. The additional floors could not be built owing to lack of permission.

The case

The homebuyer booked a flat on the 38th floor of the high-rise, with carpet area of 2,044 sqft, for a total consideration of Rs 14.57 crore, in December 2014. The homebuyer was promised fitout possession in September 2016, and there was a grace period of one year, according to the NCDRC judgment.

However, the developer stopped construction beyond the 89th floor, saying that it was awaiting permission from the Airport Authority of India (AAI). According to a copy of the judgment, the developer continued demanding instalments towards the transaction after stopping work.

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Mehul R Thakkar

Special Correspondent|Moneycontrol

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Homebuyer files complaint

The homebuyer filed a complaint against the developer in the NCDRC in April 2019, alleging deficiency in service.

The developer, in its argument, said that the flat booked by the homebuyer was on the 38th floor. All other bookings in this building were below level 89. The homebuyer had not suffered any loss from the stoppage of construction above the 89th floor, the developer argued.

All those who had booked units in the project were aware of all the permissions granted at the time of booking and the same was duly disclosed in the agreement, the developer said. There had been no alteration in any facility, or any amenity offered as part of the project, it added. It was incorrect to say that any false representation had been made to the homebuyer at the time of booking, the developer argued.

The developer added that it was incorrect to say that the homebuyer had booked the flat in the project only because it consisted of 117 floors. The homebuyer had booked the flat in December 2014. At that time the AAI order was very much in place and had been widely reported in the print and electronic media, it noted. As such, the plea by the homebuyer that he was misguided in respect of the 117 floors did not appear to be correct, it contended.

The developer said that it was the duty of buyers to exercise due diligence at the time of buying property.

Also read: Can homebuyers in Mumbai legally convert two apartments into jodi apartments or duplex?

Consumer forum judgment 

In its judgment dated June 26, 2023, the NCDRC said that there was misrepresentation in respect of the height of the building on the part of the developer.

The judgment added that according to the complainants, living in the tallest building in the world was the only consideration in their booking such an expensive flat. Therefore, the complainants were entitled to claim a refund of their money.

“In view of the aforesaid discussions, the complaint is partly allowed. The opposite party-1 (developer) is directed to refund entire amount deposited by complainant-2 (homebuyer) with interest 9 percent per annum from the date of respective deposit till the date of refund, within a period of two months from the date of this judgement,” the judgment concluded.

Also read: Can a homebuyer seek full refund of booking amount in case of job loss?

Responding to an email query, a Macrotech Developers spokesperson said: “The said order has been passed on the basis of wrong representations and facts. We will challenge the order in the appropriate forum.”