Haryana RERA Orders Elan Limited To Refund Commercial Unit Buyers, Caps Forfeiture At 10% Of Sale Consideration

“while cancelling the unit, it was an obligation of the respondent to return the paid-up amount after deducting the amount of earnest money.”, the authority noted. 

Complainants booked a commercial unit in the builder's "Elan Epic" project at Sector 70, Gurugram in December 2019. Pursuant to the booking, Unit No. TF-010 (Café) on the third floor, having a super area of 621 sq. ft. was allotted to them. A provisional booking agreement was executed between the parties on March 2, 2020.

According to the complainants they paid Rs. 50.28 lakh towards the unit under the payment plan agreed between the parties. They alleged that despite repeated requests builder neither executed nor registered the Builder Buyer Agreement and failed to provide them with a complete signed copy of the agreement.

Further complainants alleged that builder had assured on verbal basis that possession will be provided around December 2022. However, possession was not provided in the expected time period. In July 2023, builder issued offer of possession and made further demands which were disputed by the complainants.

Subsequently builder issued a cancellation notice in November 2023 and stated that a substantial portion of the amount paid by the complainants stood forfeited. Complainants alleged that even the amount admitted to be refundable had not been paid.

Aggrieved by the cancellation of the allotment and non refund of the deposited amount, they approached authority seeking refund along with interest.

Authority noted that project has received Occupation Certificate on October 31, 2023 and valid offer of possession was issued after that. Authority found that complainants stopped making payments after November 2020. It further observed that several reminders and a final opportunity were given before the allotment was cancelled.

In these circumstances Authority upheld cancellation of unit and held that complainants were in breach of their contractual obligations. However, it found that amount forfeited by developer exceeded permissible limit. Referring to Haryana RERA regulations on forfeiture of earnest money, Authority held that a builder cannot forfeit more than 10% of sale consideration as earnest money.

Accordingly, Authority directed the developer to refund the amount deposited by the complainants after deducting 10% of the sale consideration of Rs. 1.05 crore as earnest money.

Authority further directed payment of interest at the rate of 10.80% per annum on the refundable amount from the date of filing of the complaint till realization.

For Complainant: PK Pandey

For Respondent: Ishaan Dang