Delay in handing over flats costs Mumbai builders Rs4 crore

The National Consumer Disputes Redressal Commission has directed Turf Estate JV – a joint venture of DB Realty and Jony Estates – to refund Rs41.12 crores received from four members of a Cuffe Parade-based family.

Delay in completing a proposed project at Worli and handing over four duplex flats to four persons from Cuffe Parade has cost a joint venture of two city developers around Rs3.91 crores.

The builders have been asked to refund Rs41.12 crores received from four members of a Cuffe Parade-based family. (HT File/Representational Image)

The National Consumer Disputes Redressal Commission has directed Turf Estate JV – a joint venture of DB Realty and Jony Estates – to refund Rs41.12 crores received from four members of a Cuffe Parade-based family as part payment for the four duplex flats along with interest at the rate of 9% per annum.

Besides, the National Commission also ordered the joint venture to pay Rs20 lakh as compensation and a further Rs one lakh towards litigation cost from the four complainants.

According to their complaint, in August 2009, they had booked one duplex flat each in ‘Orchid Turf View’ at Worli for a total consideration of Rs32 crores. Initially they made a payment of Rs50 lakh each as booking amount and subsequently paid further instalments, taking the total in each case to Rs10.28 crores by February 2012.

The joint venture issued allotment letters to each of the four clearly mentioning that an agreement for sale of the respective flats would soon be executed with each of them. The agreement was to contain all the terms and conditions of the transaction as well as the deadline for completing the project.

After waiting for a considerable time for seeking the proposed high-rise take shape, the flat purchasers in December 2015 issued notices to the joint venture and demanded refund of the amounts paid by them. They approached the National Consumer Commission after they did not get satisfactory replies.

The joint venture resisted the complaints contending that the complainants were fully aware at the time of booking the flats that requisite approvals were not in place and the project was expected to take longer time to complete. The JV further contended that the project got delayed, as it was compelled to alter the entire layout and plans because of change in development control regulations for Mumbai.

The contention, however, failed to impress upon the National Consumer Commission. The apex consumer court held that the joint venture was at least expected to execute the sale agreements within a reasonable time after receiving huge sums from the complainants.

“Despite making a promise to provide the draft agreement soon after the allotment letter, the opposite party No.1 (JV) failed to provide the same though more than six years had expired by the time the complainants were constrained to terminate the allotment letter,” said justice VK Jain, presiding member of the commission.

He held that the complainants were fully justified in refusing to wait further for the flats allotted to them and in terminating the allotment letter and seeking refund along with compensation and added that the complainants cannot be compelled to wait indefinitely for the possession of the flats.