Can't sit on homebuyers' money without delivering flats: Consumer panel orders ₹1.95 cr refund

Can't sit on homebuyers' money without delivering flats: Consumer panel orders ₹1.95 cr refund

Mumbai, Observing that a developer cannot retain public funds while failing to deliver flats within a reasonable timeframe, the Maharashtra Consumer Commission here has directed Bombay Dyeing and Bombay Realty to refund ₹1.95 crore to two Jamshedpur-based homebuyers.

Can't sit on homebuyers' money without delivering flats: Consumer panel orders ₹1.95 cr refund

A bench comprising presiding member Poonam Maharshi and member Nisha Amol Chavhan directed the developers to jointly and severally refund the principal sum of ₹1.95 crore alongside ₹1.5 lakh towards compensation and litigation costs for "deficiency in service and unfair trade practice".

According to the complaint, the Jameshedpur residents had booked a 1,941 sq ft apartment along with two car parking spaces in Dadar East for a total price of ₹9.94 crore.

Between August and October 2014, the buyers were issued an allotment letter under a 30:70 payment plan, and they paid ₹1.95 crore, including the initial booking amount of ₹25 lakh, the complainants claimed.

They alleged that despite adhering to the initial instalment schedule, the developers, Bombay Dyeing and Manufacturing Co Ltd and Bombay Realty, delayed construction by over a year.

Facing unjustified demands and lackadaisical progress, the complainants cancelled their booking in October 2016 and sought a full refund of the deposit.

However, instead of processing the refund, the realtors continued issuing demands and initiated adversarial communications.

The buyers initiated criminal proceedings, which were eventually dismissed by the Jharkhand High Court and the Supreme Court, while leaving open the civil remedies for recovery of money.

The developers raised technical objections, claiming the complaint was barred by limitation since the dispute arose in 2016.

Rejecting the limitation plea, the commission noted that the developer had issued a fresh demand letter in January 2022 and "thereby acknowledging the subsistence of the transaction and continuous cause of action".

"The retention of the complainants' hard-earned money without delivery of possession constitutes a continuing wrong. Hence, the complaint filed within two years of the culmination of prior bona fide legal proceedings and continuing demands is well within limitation," the commission remarked.

Relying on apex court rulings, the commission asserted that "retaining the hard-earned money of home buyers while failing to deliver the unit amounts to unjust enrichment".

"When a developer fails to deliver possession within a reasonable time or stalls execution while retaining substantial public funds, it constitutes a clear deficiency in service and an unfair trade practice," it added.

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