Mumbai: A district consumer commission in two separate orders against the same developer has directed it to give flat to the buyers after executing agreement or refund ₹21.64 lakhs with 24 % interest per annum from the date of received of amount to date of realisation with additional ₹1.75 lakh compensation towards mental agony and litigation cost to each.
If the flat is not given, the interest amount alone will be over to ₹55.44 lakhs and each complainant is likely to get over ₹76 lakhs. Activists called the interest rate "unusual and very high".
The order dated January 27, 2023 (uploaded April 4, 2023) was passed by S S Mhare, president and M P Kasar, member District Consumer Disputes Redressal Commission, Central Mumbai on two different complaints by Dadar residents Paras Vira and Mayank Vira against Monarch Universal Lifescapes Pvt. Ltd., its directors Rohan Seth, Gopal Thakur, Hasmukh Thakur, and Ashok Narayani among others.
Neither project was completed nor agreement of sale executed
In their complaints, the complainants stated before the commission that they were allotted flats in the project by opposite parties in their Panvel project in November 2012. Paras on the 25th floor of Monarch Greenspaces and Mayant on 28th floor of Monarch Greenscapes. For their respective flats, both paid ₹21 lakh each and the opposite parties acknowledged the payment. Towards the end of the same month the two paid ₹64,890 each to them towards service tax. However, as neither the project was completed nor agreement of sale executed, the complainants sent several reminders to execute agreement and handover the flats.
Court quotes MOFA Act
When no response came by, the two sent legal notice to the opposite parties. At the Commission, when the opposite parties did not appear, an order to move ex-parte was passed. During the hearing, the commission observed that flats were reserved after receiving the amount so complainants are consumers.
During the hearing, the commission observed as per MOFA Act, opposite parties should have executed and registered agreement with complainants as soon as they received full amount from the complainants. And that they are not entitled to issue a letter of Reservation after accepting full and final payment out of the total consideration towards the said unit from the complainant.
Allegations against the opposing parties unchallenged
It added that opposite parties had violated provisions of MOFA Act, 1963 while doing the transaction with complainant in regard to said flat and applicable law towards transaction arising between complainant and opposite parties as per MOFA Act, 1963. The commission stated that all allegations made by the complainant in complaint against opposite parties remained unchallenged and uncontradicted and that it was proved that there was deficiency in service and unfair trade practice and that it has to comply with its order in 45 days.
Advocate pints out 'Interest rate unusual and very high'
"The interest rate looks unusual and very high. The practice is when you give more than 9% or 12% interest then there has to be some special justification as to why it has been given. In this case there is no proper justification or explanation for it to become a precedent or a case law," said advocate Shirish Deshpande, Chairman, Mumbai Grahak Panchayat (MGP).