Cancelling A Flat Then Do Read This Judgement
This judgement will hold precedent for the forthcoming orders, where homebuyers who cancel their request of reservation of a flat and end up losing the money they had paid to the developer.
By Varun Singh
This is the most important judgement that a homebuyer should read. Many a times people cancel their flats because of several reasons including personal as well as financial.
This judgement will give hope to all those homebuyers who on cancellation of their booking for some genuine reason end up getting their money forfeited.
The appellate tribunal of MahaRERA recently held, in a judgement that allottees cannot be restrained from exercising their right of withdrawing the request. Right to make request for reservation of flat includes the right to withdraw such request for reservation of flat.
The appellate tribunal was hearing an appeal filed by homebuyers Dinesh and Ranjana Humane against an order passed by MahaRERA members 1.
The developer concerned in this appeal was Piramal Estate Private Ltd and the project in concern was Vaikunth Cluster 2 located at Thane.
The homebuyers via a form of request for reservation reserved a flat on January 29, 2019 and paid an amount of Rs 1.12 lakh as booking amount. They also paid Rs 4.49 on March 1, 2019 towards price of the flat to builder.
On account of medical emergency in the family of the homebuyers, they decided to cancel the flat booking. Accordingly, they e-mailed to promoter and requested to cancel the flat booking and to refund the total amount of Rs. 5.61 lakh.
Promoter replied vide e-mail dated May 20, 2019 that the amount paid by thems is forfeited on account of cancellation of booking.
MahaRERA conducted an inquiry and passed impugned order thereby directing the promoter to refund the booking amount to Allottees in accordance with booking form signed by both the parties.
Being dissatisfied with the order Allottees have preferred the Appeal and challenged propriety, correctness and legality of the order.
The appellate tribunal in its judgement noted that, the impugned order of MahaRERA was passed without proper application of mind and without correct appreciation of facts of the dispute.
The judgement noted that the request for reservation form is signed by Allottees. Detailed information of Allottees is mentioned in the said form.
Terms and conditions are to be followed and observed by Allottees only. The request for reservation form is not signed by Promoter.
The order passed by MahaRERA says amount is to be refunded in accordance with the booking form signed by both the parties. The appellate tribunal’s judgement reads, “It may be pointed out that the request for. reservation is not styled as “booking form”. There is no document having nomenclature as “booking form” which is signed by Allottees or by both the parties. Impugned order is passed on the basis of booking form signed by both the parties. The order is based on such document which does not exist on record. Hence, it is incorrect and wrongly passed.”
The tribunal further noted, “It cannot be ignored that agreement for sale between Allottees and Promoter had not taken place yet. Moreover, Promoter had neither issued confirmation letter nor allotment letter to the Allottees. The only document signed by Allottees is the printed form which ls styled as “request for reservation”. So, at the time of making request for reservation of the flat on the part of Allottees, Promoter obtained the signatures of Allottees on such form of request which consists of 33 different terms and conditions to be observed and complied by Allottees only.”
The tribunal noted that, as per clause 17 (of request for reservation), Allottees have no right to withdraw their request for reservation. This is absolutely unfair and unreasonable and one-sided condition imposed on the Allottees. Allottees cannot be restrained from exercising their right of withdrawing the request. Right to make request for reservation of flat includes the right to withdraw such request for reservation of flat.
“Existence of such a condition in the printed form of “request for reservation” to be filed in by Allottees is against the object and purpose of RERA. Promoter cannot take undue advantage of such one sided and unreasonable condition.” Appellate Tribunal.
The appellate tribunal finally ordered, “In our view, the impugned order (by MahaRERA) is not correct, proper and legal and therefore
it deserves to be set-aside.”
The tribunal ordered the developer to pay Rs 5.61 lakh to the homebuyer.
Adv Sunil Kewalramani who represented the homebuyers said, “The Maharashtra Real Estate Appellate Tribunal (MREAT) in this Landmark judgement has by invoking its inherent powers under Regulation 39 of the Maharashtra Real Estate Rules 2017; directed the Developer to refund the booking amount paid by the allottees.”
He further said, “The MREAT has in the judgement held that “The forfeiture clauses in the ‘Said Request for reservation form’ is ex facie unreasonable, unfair and inequitable and it is against the object and purpose of RERA. Such forfeiture clauses is not binding on the parties and the developer is not entitled to forfeit any amount as per the forfeiture clauses of the request form. The MREAT has in the judgement held that “In this peculiar matter, though the claim of refund is not governed by any specific provision of RERA, it cannot be ignored that the object of RERA is to protect the interest of the consumer. So, whatever amount is paid by home-buyer to the Promoter should be refunded to the Allottee on his withdrawal from the project.”