The Maharashtra Real Estate Appellate Tribunal, Mumbai, on March 17, 2021 set aside the order dated October 3, 2019 (“impugned order”) passed in Complaint No. CC006000000089770 in the matter of Mr. Dinesh R. Humane and Mrs. Ranjana D. Humane (“Appellants/Allottees”) v. Piramal Estate Private Limited (“Respondent/Promoter”) by the Maharashtra Real Estate Regulatory Authority (“MahaRERA”). The order dated March 17, 2021 directed the Promoter to refund the total amount paid by Allottees on the cancellation of flat reservation.

Facts of the Case:

The Allottees agreed to purchase, and the Promoter agreed to sell Flat No. 807 in the project namely Vaikunth Cluster- 2 at Thane. The Allottees submitted form of ‘request for reservation’ of Flat on 29th January 2019 and paid an amount of Rs. 1,12,393/- as booking amount to the Promoter. The Allottees  also paid Rs. 4,49,574/- on March 1, 2019 towards price of the Flat to Promoter. On account of medical emergency in the family of Allottees, they decided to cancel the flat booking. Accordingly, they sent an   e-mail to the Promoter requesting to cancel the flat booking and to refund the total amount of Rs.5,61,967/-. The Promoter replied vide e-mail dated May 20, 2019 that the amount paid by Allottees is forfeited on account of cancellation. The Allottees filed a Complaint before MahaRERA for recovery of amount of Rs. 5,61,967/- from the Promoter. The impugned order was passed by MahaRERA whereby the Promoter/ Respondent was directed to refund the booking amount in accordance with the booking form. The Allottees filed an appeal before MahaRERA Appellate Tribunal challenging the order passed by MahaRERA.

Issues:

Whether the MahaRERA order directing the Promoter to refund the booking amount to Allottees in accordance with booking form signed by both the parties is correct?

Analysis:

The MahaRERA Appellate Tribunal held that:

1. Form of ‘request for reservation’ is signed by Allottees only and not by the Promoter. The terms and conditions recited in Annexure “A” thereto are to be followed and observed by Allottees only. As per the impugned order, amount is to be refunded in accordance with the booking form signed by both the parties. Annexure “A” is not styled as booking form and there is no document having nomenclature as "booking form” which is signed by Allottees or by both the parties. Thus, the impugned order is passed based on such document which does not exist on record.
2. The only document signed by the Allottees is the printed form styled as ‘request for reservation’, which consists of 33 different terms and conditions to be observed by Allottees only. Clause 17 providing forfeiture of 10% amount of the total price of flat or the amount paid till the date, whichever is lesser, in case of withdrawal by Allottees is ex-facie unreasonable, unfair and inequitable. Existence of such a condition in the printed form of ‘request for reservation’ is against the object and purpose of Real Estate (Regulation and Development) Act, 2016 (“RERA”) and the same being against statute of RERA is not binding on the parties and such unreasonable and unfair transaction cannot be enforced.
3. The Supreme Court in the case of Pioneer Urban Land and Infrastructure v. Govindan Raghavan, [Appeal No. 12238 of 2018, decided on April 2, 2019] held that the court will not enforce an unreasonable, unfair contract or an unreasonable and unfair clause in a contract where contracting parties are not equal in bargaining power and where a man has no choice or rather a meaningful choice but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form as a part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rule may be.
4. The agreement for sale was not executed between the parties. Parties never reached to the stage of executing agreement for sale. There was no attempt to execute the agreement on the part of either the Promoter or Allottees. The refund of amount paid to promoter can be demanded as per Section 18 of RERA on the ground that promoter fails to give possession on agreed date or fails to complete the project as per terms and conditions of agreement for sale. However, 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.
5. Regulation 39 of Maharashtra Real Estate Regulatory Authority (General Regulation), 2017 and Regulation 25 of Maharashtra Real Estate Appellate Tribunal Regulation, 2019 are in respect of the inherent powers of the regulatory authority and the appellate tribunal to pass such orders which are necessary to meet the ends of justice.

The MahaRERA Appellate Tribunal, thus, set aside the impugned order and directed the Promoter to refund the full amount paid by Allottees.

Please find attached a copy of the order dated March 17, 2021.

This update has been contributed by Prakash Panjabi (Senior Partner) and Harshita Jagwani (Senior Associate, Designate).