Mumbai: Consumer Commission Directs Society to Refund Around ₹1.5 Cr Each to Flat Buyers

Mumbai: The National Consumer Disputes Redressal Commission has directed a Goregaon housing society to refund nearly Rs1.5 crore each to three complainants with interest. The commission held that the society gave the complainants’ allotted flats to society members after its agreement with the developer was cancelled.

The commission said that though the society and developer have approached arbitrators, rights of complainants are not affected by the arbitration proceedings, nor does it exclude the jurisdiction of the consumer forum as per the Supreme Court judgements.

2 Mumbai-based complainants, 1 Kolkata-based

The order was passed on three complaints against the same developer and society. The complainants were Mumbai-based Sandeep and Jyoti Grover, Ram Pyare Yadav and Dropati Rampyare Grover and Kolkata-based Mahendra Agarwal against Sai Siddhi Developers and Goregaon Pearl Co-operative Housing Society Ltd. In all three cases, the directives were only against Goregaon Pearl and not against the developer.

The buyers had booked flats in the redevelopment project. Originally, MHADA had constructed three buildings with 60 flats in 1982. Goregaon Pearl was formed and registered around the same time. In 2006, MHADA leased out the land and building through a lease deed and eventually sold it the same year. The society then decided to redevelop it and entered into an agreement with Sai. Three buildings were to merge into two wings of ground plus 15 floors each.

Redevelopment agreement

As per redevelopment agreement, the developer had to allot 32 flats to the existing flat owners in A-Wing and 28 flats to existing flat owners in B-Wing and sell additional flats to prospective buyers. In the meantime, the Development Control Regulation of Greater Mumbai, 1991 was amended in 2008, wherein permissible FSI was increased from 2.4 to 2.5. The developer deposited Rs8.21 crore and applied for additional FSI, which was approved by MHADA in 2011. The complainants booked flats after advertisements were made following this approval. However, the possession of the flat was not given.

During the hearing, it was stated that after introduction of fungible FSI, FSI of 2.5 was not sufficient to complete the project and only seven floors (12 flats) in A wing and 58 in B wing were constructed. The developer wanted to amalgamate a plot with nearby plots which was rejected by the society. Over a period, disputes arose and the society terminated the agreement and power of attorney with the society. The matter between society and developer eventually went to the Arbitrator, high court and the developer vacated the project premises.

The commission observed that not only was the entire new building being constructed from the sale proceeds of the flats falling in the share of the developer, the entire payment to the flat owners in the old building was also being paid from it. This agreement, it said, was acknowledged in consent terms by the society. On the basis of the agreement and power of attorney, the society appointed the developer as its agent, giving full authority to sell the flats in its share in the new building. Citing court order, commission said that developer acted as its agent and the principal liable for the act of the agent was applicable.

Pointers:

Housing society to refund nearly Rs1.5 cr each

Complainants to get refund with interest

Society gives complainants’ flats to society members

Directives only against Goregaon Pearl and not developer

Buyers booked flats in  redevpt   project

MHADA had constructed 3 buildings with 60 flats in 1982

Leased out land and building in 2006

Developer allotoed 32 flats to existing flat owners in A-Wing

28 flats to existing flat owners in B-Wing

Relief for outside buyers in redevpt project