Mumbai: NCDRC Orders Developer To Compensate ₹49.5 Lakh To Homebuyer For Denial Of Flat Possession After 75% Payment

Mumbai: The National Consumer Dispute Redressal Commission (NCDRC) has granted relief to a Mumbai resident, Subhash Chaurasiya, after a developer denied him possession of a flat despite receiving 75% of the booking amount in 2007.

Upholding a previous order from the State Consumer Dispute Redressal Commission (SCDRC), the NCDRC has directed the developer to compensate Chaurasiya with Rs 44 lakh, the current market value of the flat, along with Rs 5 lakh for mental agony and Rs 50,000 towards litigation costs.

Subhash Chaurasiya, a resident of Kalachowki, had booked a flat on the 6th floor of Om Sai Palace, a project by M/s Sai Krupa Builders in Thane, for Rs 7.5 lakh. He had paid Rs 6 lakh (75% of the total cost) upfront. However, in 2011, while awaiting the final payment of Rs 1.5 lakh, the developer scrapped the registered agreement and sold the flat to a third party.

Feeling aggrieved, Chaurasiya approached the SCDRC and filed a complaint. The commission found that Chaurasiya had made substantial payments and had expressed his willingness to pay the remaining Rs 1.5 lakh. It was also noted that the balance payment was only due upon possession of the flat, not before. Despite this, the developer sold the flat to another buyer, Subhash Pathak, during the pendency of the case.

The developers argued that they were forced to sell the flat due to the complainant’s failure to pay the remaining amount. They also claimed to have offered compensation to Chaurasiya, which was rejected.

However, the SCDRC ruled in February 2024 that the termination of the agreement was illegal, as it was not done through a registered document as required by law. The commission held that the developer’s attempt to cancel the agreement via a letter from their counsel was not a valid legal method.

The NCDRC upheld the SCDRC’s ruling, agreeing that Chaurasiya could not be expected to buy a property at current market rates due to skyrocketing property prices. The developer was thus ordered to either hand over possession of the flat at the original rate or pay Rs 44 lakh, the flat’s current value, along with Rs 5 lakh for mental distress and Rs 50,000 in litigation costs.