RERA orders Manglam Multiplex to refund earnest money to buyers at M3M Heights in Gurugram

RERA orders Manglam Multiplex to refund earnest money to buyers at M3M Heights in Gurugram

Affirms allottee’s right to refund in case of delayed possession

The Gurugram, Haryana bench of the Real Estate Regulatory Authority (RERA) has held the builder Manglam Multiplex Private Limited liable for forfeiture of earnest money paid by the complainants after they canceled the booking for a unit in Section 65 of Gurugram.

The bench comprising Ashok Sangwan (Member) directed the realtor to refund the earnest money paid by the complainant. It reiterated the allottee’s unequivocal and absolute right to seek a refund if the promoter failed to deliver possession within the stipulated time.

The complainants, Shashi Saha and Nilendu Indu Saha had booked a specific unit on the 21st floor of Tower 6 of M3M Heights with a super area of 1433 sq. ft.

The allotment was confirmed by Manglam Multiplex through an allotment letter, followed by the execution of a builder-buyer agreement, stating a total sale consideration of Rs.1,69,41,698.

The Saha’s paid Rs.75,51,467 towards the total amount. Subsequently, to finance the purchase, a tripartite agreement was entered between the complainants and ICICI Bank Limited for a loan of Rs.1,15,00,000.

Later, the complainants formally canceled the booking by issuing a dated notice to the builder, communicating the cancellation of the booked unit under Clause 7.9 of the buyer’s agreement. The Saha’s also requested the builder to provide details regarding deductions and to initiate the refund process for the amount deposited after deductibles.

However, the notice was not acknowledged by the builder. Thereafter, they sent additional notices, followed by multiple emails seeking a refund. But despite their efforts, did not receive a satisfactory response.

Faced with the lack of resolution, the complainants approached Haryana RERA, filing a complaint against the builder.

In response, the builder contested the complaint on several grounds claiming that the Saha’s approached it for booking a residential unit in the M3M Heights project, and an apartment was allotted to them based on the booking amount and compliance with the terms.

Manglam Multiplex further contended that the Sahas were chronic defaulters, failing to adhere to the payment plan and receiving reminders from it. Despite executing a tripartite agreement with ICICI Bank and a builder-buyer agreement, they allegedly continued to default on payments. Reminder letters were issued to them on multiple occasions. The builder argued that it canceled the unit’s allotment under the buyer’s agreement. It maintained that the cancellation and forfeiture of earnest money were justified due to the default in payment by the complainants.

The RERA noted that the builder did not present any evidence to suggest that the Saha’s were chronic defaulters. It observed that they paid a substantial amount of Rs.75,51,467 against the total sale consideration, as per the construction-linked payment plan.

The officials held that the complainants had cleared all their installments before requesting the cancellation and there was no evidence of default on their part. Thus, RERA rejected the objection raised by the builder concerning payment delays.

The regulatory authority addressed the issue of relief sought by the complainants by directing the builder to refund the paid-up amount along with interest to the Saha’s.

The RERA noted that the complainants, through letters and notices, requested the builder to cancel the allotment and refund the amount, but the latter, despite refunding the amount, canceled the allotment and forfeited the paid amount. Referring to the possession clause in the agreement, RERA held that the clause favored the promoter and could be misused to evade liability for timely delivery.

Considering the significant delay in the construction of the project, the officials held that the complainants could not be expected to wait indefinitely for possession, especially when the completion certificate had not been obtained by the promoter.

It referred to the decision of the Supreme Court in the Newtech Promoters and Developers Private Limited vs State of U.P. and Ors. [2021-2022(1) RCR (c) 357] case.

The RERA held that the allottee had an unequivocal and absolute right to seek a refund if the promoter failed to deliver possession within the stipulated time, regardless of unforeseen events or court orders not attributable to the allottee. It held the builder liable for cancellation of the allotment after the complainants approached it.

Regarding the lack of possession, RERA directed the builder to refund the paid-up amount of Rs.75,51,467 to the Saha’s after deducting 10 percent of the basic sale consideration of Rs.1,51,26,514.

As per the Haryana Real Estate (Regulation and Development) Rules, 2017, the interest was calculated at the rate of 10.75 percent per annum from 04 October 2021 (the date of withdrawal) until the actual refund.