The consumer forum has directed a builder to refund a flat buyer Rs9.68 lakh charged as penal interest for defaulting on payment for his flats.
The Maharashtra State Consumer Disputes Redressal Commission has also directed Runwal Developers Private Limited to pay Dinesh Hegde (the complainant) interest at the rate of 9% per annum on the amount and Rs25,000 towards litigation costs.
Hegde had booked two flats in a project at Kurla, proposed by Runwal Developers. The developer and Hegde executed the sale agreement in May 2005.
The developer was to hand over ready flats to Hegde by October 2006, but construction got delayed and the building was completed only by April 2008.
The buyer paid the last installment in December 2008 and sought possession of both the flats. But the developer responded only on November 25, 2009 and demanded Rs9.68 lakh as penal interest for delaying payment.
Hegde got possession of the flats in May 2010 only after he paid this sum.
He then moved the Mumbai Suburban additional district consumer forum contending he had been compelled to pay extra for possession of the flat and this amounted to unfair trade practice.
The developer insisted that Hegde had agreed to pay — in one installment — Rs30 lakh in return for a discount on the overall price under the advance disbursement facility (see box).
According to the developer, the buyer has to pay penal interest at the rate of 21% per year if he defaults in paying this lump sum and Hegde had to pay Rs9.68 lakh because he had defaulted on his payment.
The commission noted that the developer had given Hegde several concessions in making payments at various stages of constructions, and had also raised installment amounts periodically, and hence, demanding penal interest all of a sudden was unjustified.
“It also exhibits unfair trade practice on the part of the builder to make such unlawful demand… and withhold the handing over of possession unless the payment is made,” the consumer commission observed holding the developer guilty of deficiency in service.
It has now given Runwal Developers two months’ time to refund the amount with interest.