INTRODUCTION

There are several times when individuals put down all their deposits out of their savings account to book a flat. However, due to either the hardship in their business and families or non-fulfilment of the promises made by the builder i.e. using poor quality of construction etc., the prospective buyers try to cancel the booking at the initial stage, which is before entering into a sale agreement or before they were send the confirmation letter.

Now, whenever they try to cancel the booking, the builder, many times gets reluctant to refund the booking amount or even if they agreed to do so, they wanted them to forfeit a certain percentage of the flat amount or the amount paid. This, leads to more hardship for the prospective buyers of flats, as they are burdened, with the judgement of feel like they have no other option, but to buy the flats.

The order in Mr Dinesh R. Humane and Mrs Ranjana Humane V. Piramal Estate Ltd., case, which came recently in year 2021, brought a sigh of relief to them.

FACTS

The prospective buyer and the promoter have agreed to sell and purchase the flat, in the project called "Vaikunth Cluster 2" Thane.

To purchase the flat, the allottee has submitted a request form/booking to the promoter for the reservation of the flat and paid Rs. 1,12,393/- as the booking amount. Moreover, they have paid a further paid Rs. 4,49.5741, towards the price of the flat to the promoter.

However, they had to cancel the request for the flat due to some medical emergency and therefore, requested the promoter to refund the amount paid by them.

The promoter replied that the amount paid by the allottee is forfeited on the account of cancellation.

Hence, the allottee filed a complaint before the RERA Authority, Maharashtra

CONTENTIONS OF PROMOTER

1. He relied on Clause 17 of the request/booking form, which mentions that the applicant shall not withdraw this request for reservation/cancellation. Suppose the applicant withdraws this request for reservation/booking. In that case, the company shall be entitled to forfeit 10% of the sale consideration or the amount paid by the applicant till such date, whichever is less. Also, taxes and outgoings, including GST, if any, already paid in respect of the residential flat will be borne by the applicant and therefore, the promoter will not be liable for such refund.

2. The promoter has further claimed the relief based on Clause 18 of the model agreement for sale as given under the rules of RERA i.e. the clause of forfeiture is given there. Therefore, contended that there have been no violations of the provisions of RERA or rules and regulations made there under.

3. The promoter further contended that the complaint Under Section 31 of RERA is not maintainable unless there has been a violation. As, per the section, the aggrieved person may file the complaint with the authority or the adjudicating officer, when there have been violations of the Act, rules or regulations made thereunder.

CONTENTIONS OF ALLOTTEES

1. The couples contended that the cancellation of the transaction is made at the initial stage i.e. within the four months after booking the flat, while the agreement of sale has not been signed.

2. The request for reservation/booking form was signed only by the allottee and not by the promoter and therefore, contending that the form was not valid.

OBSERVATIONS OF APPELLATE AUTHORITY

1. The agreement of sale between the allottee and promoter has not taken place yet. Furthermore, neither the confirmation letter nor the allotment letter was issued by the promoter.

2. At the time of requesting the reservation of the flat, only the signature of the allottees was obtained by them on 33 different terms and conditions, which have to be complied with by the allottee.

THE JUDGEMENT OF APPELLATE AUTHORITY

1. It held that Clause 17, which mentions that the applicant shall not withdraw this reservation request. Suppose the applicant withdraws this reservation request. In that case, the company shall be entitled to forfeit 10% of the sale consideration or the amount paid by the applicant till such date, whichever is less in case of withdrawal by the allottee is ex facie unreasonable, unfair and inequitable. The conditions manifested under the said clause are against the object and purpose of RERA i.e. to protect the consumers.

2. In the present case, the appellant authority held that the allottees had no choice but to sign the printed form of request prepared one-sided by the promoter. Therefore, promoters cannot take advantage of such one-sided and unreasonable conditions.

3. Furthermore, Clause 18 of the model agreement for sale as given under the rules of RERA, would not be applicable, as it was in the initial stage itself when the parties are requesting for the cancellation and therefore, they have never reached the stage of executing the agreement of sale.

4. Consequently, it denied the contention of a promoter that the complaint is not maintainable under Section 31 of the RERA Act, by stating that Regulation 39 of the Maharashtra Real Estate Regulatory Authority is in respect of saving inherent powers of the authority. As, per the regulation, nothing in the regulations shall be deemed to limit or otherwise affect the inherent powers of the authority to make such orders as it is necessary for meeting the ends of the justice.

5. Thus, in the interest of the justice, the appellate authority directed the promoter to refund the total paid by the allotted.

Conclusion of the Article:

1) Make sure you read all the clauses of the Booking form and avoid unreasonable conditions in the booking form.
2) Cancellation if not in the initial stages, the RERA model agreement provides for 10% forfeiture as loss of opportunity cost.
3) RERA Jurisdiction is not limited to the clauses and is for consumer protection.

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