Mumbai: Redressal Commission orders refund of booking amount with interest after construction fails to take off

Mumbai: Redressal Commission orders refund of booking amount with interest after construction fails to take off

The Commission also directed Rs 35,000 towards mental agony and towards litigation cost in each of the three orders.

Ashutosh M ShuklaUpdated: Sunday, March 12, 2023, 07:23 PM IST
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Representative Image | Salman Ansari

The State Consumer Disputes Redressal Commission (SCDRC) in three different orders has directed the same developer to refund Rs 2.5 to Rs 3 lakhs with 9 per cent interest to different buyers it had taken for booking of flats that were not even constructed for them to be given.

The Commission also directed Rs 35,000 towards mental agony and towards litigation cost in each of the three orders.

The orders dated March 8, 2023 were passed by S P Tavade, president and A. Z. Khwaja, judicial member of the SCDRC. They were filed on three different complaints but against the same parties - Shree Shubh Enterprise, a partnership firm, Uday Surve and Govind Somani partners in Shubh.

The first complaint was made by Shashikant Gandhi and his nephew Prashant Desai, second by Tejas Sashikant Gandhi, Alka Sashikant Gandhi, Sushma Joshi and Rashmi Gujrathi, and another one by Alka and Tejas Gandhi. The complainants were all relatives of Shashikant who knew Somani. Somani worked as a broker for Shashikant when he was himself a developer.

How developers fooled their clients

Somani approached Sashikant and informed him about an upcoming project 'Astoria 1' in Borivali east. He told Shashikant that he could get a flat that was bigger in size at a reasonable price. Two flats were priced at Rs 68.82 lakhs measuring 1,147 sq. ft. super built up and one at Rs 55 lakhs with 1,100 sq ft. super built area. For these, Shashikant, his family and extended family members paid money at different periods from 2005 to 2010 to Shree Shubh.

Although the money was encashed by Shree Shubh, it did not execute the agreement and maintained throughout that till requisite permissions are in place, they will not be able to execute the agreement for sale with them. As the project was delayed, it promised interest at the rate of 36 percent on quarterly basis to the complainants.

But when follow ups were made on what was promised, the developers gave evasive replies that led to complaints being filed. An ex-parte order was passed as they did not stand before the Commission to give its side.

Commission comes down hard on developers

During the hearing, the Commission observed that the developers refused to refund the booking amount of the complainants. It added that hard earned money of the complainants in the form of booking amount was used by the opponents for the years together and the complainants were deprived of their dream house and instead made to run from pillar to post even for refund of their booking amount. The commission said that since the work has not even started, it amounted to deficiency in service and unfair trade practice by the developers and that they should refund the amount within 30 days of the order.

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