It is obligatory for the builder/developer to execute a sale/purchase deed for a flat even if they receive a small amount of money to book the flat, ruled a city consumer forum last week.
“As per section 4 of the MOFA (Maharashtra Ownership of Flats Act), it is obligatory on part of the builder/developer to execute the sale/purchase deed if they accept even a rupee from the purchaser,” the Mumbai Suburban District Consumer Disputes Redressal Forum observed.
The forum was dealing with complaints filed by four city residents against Kanishka and Company. In September 2005, the quartet had booked flats in Hrishikesh Tower supposed to be constructed by the developer at Padma Nagar in Borivli (West).
They alleged that though they had paid Rs1 lakh each towards the booking amount, the developer had neither cared to execute the sale/purchase deed nor completed the construction work. They approached the consumer forum after they realised that some third party was putting up construction at the site of the proposed Hrishikesh Tower.
They had sought direction to the developer either to hand over possession of ready flats to them after receiving balance payment or pay compensation computed on the basis of the market rate for ready flats in the area.
Before the forum, Kanishka and Company took a stand that they had never accepted any amount from the complainants towards booking of flats, but it was a friendly loan. The forum, however, found the developer had issued receipts against the booking amount received from the complainants and the receipts not only was stamped with their seal but also mentioned the number of flats allotted to the respective complainants.
The forum, therefore, held the developer guilty of deficiency in service for failing to execute a sale/purchase deed and handover promised flats to the purchasers, Prakash Shetty from Goregaon (East), Shashikant Shetty and Bhaskar Shetty from Borivli (West), and Sadanand Pujari from Dahisar (East).
The forum has now directed Kanishka and Company to refund the token amount received from the quartet along with interest at 12% per annum from the date of payment. It, however, rejected their plea for the ready possession of flats or compensation at market rate because some other builder had acquired the development rights of the property.