RIGHT TO MAKE REQUEST FOR RESERVATION OF FLAT INCLUDES TO WITHDRAW SUCH REQUEST FOR RESERVATION OF FLAT

[Mr. M. GOVINDARAJAN]

In ‘MR. DINESH R. HUMANE AND MRS. RANJANA D. HUMANE VERSUS PIRAMAL ESTATE PRIVATE LTD. [2021 (5) TMI 130 - MAHARASHTRA REAL ESTATE APPELLATE TRIBUNAL, MUMBAI], 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 a request form to the promoter for the reservation of flat for them on 29.01.2019.  The allottees paid a sum of ₹ 1,12,393/- as booking amount.  Further they have also paid ₹ 4,49,5741- on 01.03.2019  towards price of the flat to the promoter.  Due to some medical emergency the allottees decided to cancel the request for the flat and requested the promoter to refund the amount paid by them in two occasions to the tune of ₹ 561967/-.  The promoter replied on  20.05.2019 that the amount paid by allottees is forfeited on account of cancellation.

Therefore the allottees filed a complaint before the RERA Authority, Maharashtra.  The Authority enquired the complaint and directed the promoter to refund the amount to the allottees as per the booking form duly signed by both the parties.

Being aggrieved against the order the allottees filed an appeal before the RERA Appellate Authority and challenged propriety, correctness and legality of the order.

The promoter relied on Clause 17 of the request form which provides that the applicant(s) shall not withdraw this request for reservation. If the applicant(s) withdraw this request for reservation, the Company shall be entitled to forfeit 10% of the sale consideration or the amounts paid by the applicant(s) till such date, whichever is less and balance (if any) will be refundable in 60 days without any interest.    However the taxes and outgoings, including GST lf any, already paid (including on the forfeited amount) or due and payable by the applicant(s) in respect of the said residential flat shall be borne by the applicant(s) and the company shall not be liable to refund/reimburse the same. The applicant(s) agrees not to raise any objection in future whatsoever.

The promoter further contended that-

• The Allottees have claimed relief on the basis of clause 18 of model agreement for sale as given under rules of RERA.  
• There is no violation of the provisions of RERA or rules and regulations there under.
• The complaint under Section 31 of RERA is not maintainable unless there is violation.
• The clause of forfeiture is given in model agreement under RERA rules and it is not against the spirit of RERA.
• The allottees cannot cancel the booking on personal ground for claiming the refund.

On hearing both the sides of the appeal the Appellate Authority held that the impugned order is passed without proper application of mind and without correct appreciation of facts of the dispute.  The Appellate Authority observed that-

• The allottees have paid total amount of ₹ 5,61,967/- to the promoter. 
• The allottees informed the promoter on 01.05.2019 that allottees have cancelled the booking due to some reason and requested to return the amount paid to promoter. 
• The form of ‘request for reservation’ is signed by allottees and not by promoters.
• Detailed information of allottees is mentioned in the said form.
• The request form is not styled as ‘booking form’.
• There is no document having nomenclature as ‘booking form’, which is signed by allottees or by both the parties.
• The impugned order is passed on the basis of booking form signed by both the parties.
• The impugned order is passed is based on such document which does not exist on record.
• The Authority wrongly passed by giving reference of signatures of both the parties thereon and it is not executable by the parties.

The Appellate Authority further observed that-

• The agreement for sale between the allottees and the promoter had not taken place yet.
• The promoter had neither issued confirmation letter nor allotment letter to the allottees.
• At the time of making request for reservation of the flat on the part of the allottees, the promoter obtained the signatures of allottees on such form of request which consists of 33 different terms and conditions to be observed and complied by allottees only.
• As per clause 17, Allottees have no right to withdraw their request for reservation which is absolutely unfair and unreasonable and one-sided condition imposed on the allottees.

The Appellate Authority held that allottees cannot be restrained from exercising their right of withdrawing the request. The right to make request for reservation of flat includes the right to withdraw such request for reservation of flat.  Clause 17 providing forfeiture of 10% amount of the total price of flat or the amount paid till 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’ to be filed in by allottees is against the object and purpose of RERA.   In fact, clause 17 being against statute of RERA, it is not binding on the parties. So, the promoter is not entitled to forfeit any amount as per clause 17 of request form.

For this purpose the Appellate Authority relied on the Supreme Court judgment in ‘PIONEER URBAN LAND & INFRASTRUCTURE LTD. VERSUS GOVINDAN RAGHAVAN AND PIONEER URBAN LAND & INFRASTRUCTURE LTD. VERSUS GEETU GIDWANI VERMA & ANOTHER [2019 (4) TMI 231 - SUPREME COURT].  In the said case the Supreme Court held that 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.

The Appellate Authority further held that while applying for the flat, the allottees had no choice but to sign the printed form of request prepared one-sided by the promoter. Therefore the Promoter cannot take undue advantage of such one sided and unreasonable condition.  There is no progress in the transaction and neither allotment letter nor confirmation letter is issued by the promoter.  The agreement for sale is not executed between the parties. The parties never reached to the stage of executing agreement for sale. There was no attempt to execute agreement on the part of either party.

In this peculiar matter, though the claim of refund is not governed by any specific provision of RERA, it cannot be ignored that object of RERA is to protect interest of consumer.  Therefore whatever amount is paid by home-buyer to the promoter should be refunded to the allottee on his withdrawal from the project.

The Appellate Authority held that it has inherent powers to make such order.  Regulation 39 of Maharashtra Real Estate Regulatory Authority (general regulation 2017) is in respect of saving of inherent powers of Authority.  The said regulation provides that nothing in the Regulations shall be deemed to limit or otherwise affect the inherent power of the Authority to make such orders as may be necessary for meeting the ends of justice or to prevent the abuse of the process of the Authority.  Regulation 25(1) of Maharashtra Real Estate Appellate Tribunal Regulation, 2019 also provides that nothing in these Regulations shall be deemed to limit or otherwise affect the inherent powers of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent the abuse of the process of the Tribunal.

The Appellate Authority held that the Regulatory Authority and Appellate Tribunal are having inherent powers under the Regulations framed under RERA to pass such orders which are necessary to meet the ends of justice.  The Appellate Authority in the interest of justice directed the promoter to refund the total amount paid by Allottee.  The Appellate Authority set aside the impugned order passed by the RERA Authority.