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{ GURUGRAM REAL ESTATE }
Tribunal orders realtors to refund money with interest to allottees
CHANDIGARH: Providing relief to real estate buyers, the Haryana Real Estate Appellate Tribunal has ordered Gurugram-based realtors to refund earnest money along with 10.85% interest to the allottees.
The appellate tribunal headed by justice (retd) Rajan Gupta in its October 1 order said that the tendency of the promoters to cheat innocent buyers by adopting clever tac-tics needs to be curbed and stern measures are required for this purpose.
“The respondent promoter would be liable to refund the earnest money along with interest @ 10.85% per annum from the date of deposit till realisation within 90 days of this order. In case refund is not made within 90 days, the provisions of section 64 of the RERA Act will come into play and the promoter would pay a penalty of Rs.10,000 per day till he refunds the amount to the allottees,” the tribunal ordered.
The two promoters in the matter are Roshni Builders Private Limited and Chaahat Homes Infrastructure Private Limited.
ORDER DIRECTS REFUND WITH 10.85% INTEREST, WARNS OF ₹10,000 DAILY PENALTY FOR DELAY
Hearing appeals filed against a March 7, 2024 order of Haryana Real Estate Regulatory Authority, Gurugram, the tribunal said a regulatory mechanism has been put in place to ensure sale of plots, apartments, buildings in an efficient and transparent manner. It said the authority should ensure that provisions of the RERA Act are promptly invoked to ensure justice to the aggrieved party wherever it is found that terms and conditions of advertisement are being violated and allottees are being exploited.
“The Authority has failed to exercise its powers in the instant case. We have thus no option but to set aside the impugned order with a note of caution that every case be eval-uated in its own facts and cir cumstances and cogent evidence is not ignored,” the tribunal said.
What was the case
Applications were invited by the promoter for the M3M Broadway project in sector 71, Gurugram, through an advertisement offering ‘3 deals in one’.
It said the allottee would have to pay only 10% of the amount on booking and bal ance on offer of possession. It also stated that the allottee could exit any time from the project. The allottees applied and were allotted a commercial unit measuring 403 square feet for about 1.20 crore. The allot-tees paid ₹12.06 lakh and an allotment letter of August 7, 2020 was issued to them. The due date of possession was October 31, 2023.
The promoter claims that the allottees were supposed to deposit 80% of the sale consideration when occupation certificate (OC) is applied for.
Citing a Supreme eme Court ruling, the allottees on November 14, 2021, had expressed their desire to exit from the project seeking complete refund of the amount remitted.
The OC was granted on December 13, 2021.
The tribunal said it is evident that the ad allured people to apply for units in M3M Broad-way project while the licence was issued in the name of Roshni Builders, Highrise Propbuild Pvt Ltd.
“The allottees said the promoter did not abide by its commitment and sent demand letters for payment of the balance amount before submitting the application for OC. It also incorporated a different sched-ule of payment in the allotment letter and builder buyer agreement. Both documents were in fine print,” the tribunal observed, stating that perusal of the email sent by allottees leaves no room for doubt that they sought refund well in time before the OC was applied for.
For case specific advice, get in touch with Real Estate Lawyers Punjab and Haryana High Court District Court Chandigarh Panchkula Mohali Derabassi Kharar State Commission
More on 99888-17966
A buyer may get a refund of their earnest money in RERA cases if the builder breaches the agreement, the project is delayed, or if they cancel the booking within a specified period, provided the forfeiture clause in the agreement is not penal or arbitrary. A buyer can typically reclaim the earnest money, plus potential interest, by approaching the RERA authority if the builder is at fault or by filing a complaint if they want to cancel the booking under specific circumstances, according to the RERA Rules of the state. [1, 2, 3, 4, 5]
When a refund is likely:
• Breach by the builder: If the builder fails to adhere to the terms of the agreement or causes delays in the project, the buyer can seek a refund of the earnest money and any other paid amount.
• Cancellation within specified periods: In some states, RERA rules allow for a refund if the buyer cancels the booking within 45 days of receiving the allotment letter, minus a small deduction for the builder’s losses.
• Unreasonable forfeiture: Forfeiture of earnest money is only valid if the clause is reasonable and not punitive. If the forfeiture is excessive, a buyer can appeal to RERA to intervene and ensure fairness. [1, 2, 3, 4, 6]
When a refund might not be possible:
• Buyer’s voluntary cancellation: If a buyer voluntarily cancels the booking and the forfeiture clause in the agreement is reasonable and non-penal, the earnest money may be forfeited as a cost.
• No registered agreement: If no formal, registered agreement for a specific property exists, a builder has no legal right to forfeit the money paid as a booking amount. [1, 2, 7]
How to get a refund:
1. Review the Agreement: Check the builder-buyer agreement for clauses regarding earnest money, cancellation, and forfeiture.
2. Approach RERA: File a complaint with the relevant state’s RERA authority if the builder is at fault or the forfeiture is unfair.
3. Legal Action: If the RERA authority’s decision is not in your favor or the builder fails to comply, you can pursue further legal recourse. [1, 6, 8, 9, 10]
AI responses may include mistakes.
[1] https://mahendrabhavsar.com/forfeiture-of-earnest-money-valid-if-not-excessive-or-penal/
[2] https://shankarlalraheja.com/earnest-money-can-it-be-forfeited-with-respect-to-rera/
[3] https://housing.com/news/what-are-rules-to-get-refund-of-cancellation-amount-under-rera/
[4] https://www.indiafilings.com/learn/cancellation-and-refund-under-rera/
[6] https://www.haryanarera.gov.in/assistancecontrol/viewOrderPdf/NzExNDU=
[7] https://www.youtube.com/watch?v=QzwCxa3RNxQ
[8] https://consumer-voice.org/resources/legal-aspects-of-earnest-money-forfeiture-in-real-estate/
[9] https://housing.com/news/how-does-rera-help-with-project-delays/
[10] https://www.confident-group.com/blog/what-is-rera-everything-you-need-to-know/
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