Mumbai Consumer Commission Orders Developer to Refund Homebuyers for Cancelled Flat Allotment
The Maharashtra State Consumer Disputes Redressal Commission has ordered a developer to refund over Rs 45 lakh along with Rs 15 lakh interest to a couple whose flat allotment was cancelled in a housing project.
Real EstateConsumer ProtectionMaharashtraFlat AllotmentRefundReal Estate MaharashtraOct 02, 2025
While the complainants, Wadala-based Sharmistha Ray and Manabendra Nath Ray, initially sought an interest of 18 percent per annum on the amount they paid, they agreed to 9 percent before the commission, the rate initially offered by the developer.
The commission, however, held the developer Vijaykamal Properties Private Limited and its two directors, Jayesh Shah and Ketan Shah, guilty of deficiency in service. 'Opposite Parties (company and directors) admitted they received the part consideration amount from Complainants towards Flat. Due to several litigation and technical difficulties, the project was not completed and the allotment of the subject flat allotted to the complainant was cancelled. Therefore, the opposite party committed deficiency in service and unfair trade practices,' the commission said.
Represented before the commission by advocate Mahesh Menon along with advocates Aakansha Anand and Pranav Chavan, the Rays submitted that the total cost for the flat was Rs 71 lakh. Out of this, they paid a substantial amount of Rs 45 lakh to the developer between the date of booking in 2014 and the cancellation in 2018. The Rays booked the flat in the ‘Gaurav Sarjan' project, proposed to be constructed in Antop Hill, Wadala (East).
According to the complaint, the Rays failed to receive possession of the flat. After sending a legal notice to the developer in March 2018, the developer, through a letter dated August 1, 2018, informed the complainants that the allotment was cancelled due to 'several litigation and technical difficulties.' The developer's subsequent failure to return the advance amount with interest led the Rays to file a consumer complaint in 2019. They sought a refund of the amount paid along with 18% interest, Rs 8 lakh towards mental agony, and Rs 6 lakh as compensation.
During the proceedings, the developer and directors did not dispute receiving the part payment but argued that they were ready and willing to compensate the complainants by refunding the amount along with nine percent per annum interest, as they claimed was agreed upon at the time of booking. The developer's written statement accused the complainants of having a 'greedy attitude,' claiming that the Rays were not ready to accept the offer and were instead trying to 'extract more monies' by settling on their own terms. The developer insisted they were still prepared to refund the money with nine percent interest.
This ruling by the SCDRC highlights the importance of consumer protection in the real estate sector, where homebuyers often face significant risks due to delays, cancellations, and financial mismanagement by developers. The commission's decision is expected to set a precedent for similar cases and provide a measure of relief to homebuyers who have been affected by such issues.
Frequently Asked Questions
What was the main issue in the case?
The main issue was the cancellation of a flat allotment by the developer due to litigation and technical difficulties, leading to the homebuyers not receiving possession of the flat they had paid for.
How much money did the developer have to refund to the homebuyers?
The developer was ordered to refund over Rs 45 lakh along with Rs 15 lakh interest to the homebuyers.
Why did the homebuyers file a consumer complaint?
The homebuyers filed a consumer complaint because the developer failed to return the advance amount with interest after cancelling the flat allotment.
What was the developer's defense in the case?
The developer argued that they were ready and willing to refund the amount with nine percent per annum interest but accused the homebuyers of having a 'greedy attitude' for seeking more compensation.
What does this ruling mean for homebuyers in the real estate sector?
This ruling highlights the importance of consumer protection in the real estate sector and sets a precedent for similar cases, providing a measure of relief to homebuyers affected by such issues.
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