Consumer Commission Orders Refund in Lonavala Bungalow Plot Dispute

The Maharashtra State Consumer Commission has ordered Emnoy Properties India LLP, its partners, and other real estate entities to refund Rs 12.5 lakh, along with 12 per cent annual interest, to Mumbai residents Mohammed Zain Khan and his mother, Naseema Khan. The Commission also awarded Rs 2 lakh as compensation for mental agony and Rs 50,000 towards litigation costs.

The conflict arose over a bungalow plot in the “Valvan Valley” project in Lonavala. Mohammed Zain Khan, an advocate, and his mother booked the plot in 2012 after being assured that the development had a clear title and would include amenities such as roads, a clubhouse, sports facilities, and other infrastructure.

The complainants paid Rs 12.5 lakh towards the total consideration of Rs 55 lakh and subsequently entered into an agreement for sale in 2014. They alleged that, despite repeated follow-ups, possession of the plot was never handed over. They later discovered that the project land was embroiled in legal disputes and that development work had not progressed as promised.

The complainants further claimed that the developers discussed either refunding the amount or offering alternative plots in another project, “Lions Valley”. However, neither proposal materialized.

The developers contested the allegations, arguing that the buyers were aware of the title disputes from the outset. They also claimed that the booking had been canceled by mutual consent and that part of the amount had already been refunded. However, the Commission found that the developers had accepted Rs 12.5 lakh but failed to hand over possession of the plot.

The Commission observed that the developers were unable to provide satisfactory proof of clear and marketable title to the land. It also noted that although discussions had taken place regarding the allotment of alternative plots, no final or registered agreement had been executed. Holding the developers responsible for deficiency in service and unfair trade practices, the Commission directed them to refund the amount paid by the complainants, along with 12% annual interest from the date of payment until realisation. It further awarded compensation for the harassment suffered by the complainants and ordered payment of litigation costs.

The Commission emphasized that once a developer accepts money from a buyer and promises possession within a specified period, it is bound either to complete the project and hand over the property or refund the amount with appropriate compensation. It held that the prolonged failure to deliver possession, coupled with uncertainty surrounding the project land, had caused financial loss and mental distress to the complainants.

The developers have been directed to comply with the order within 60 days, failing which the awarded amount will attract a higher rate of interest.