Aishwarya Avant Builders PVT LTD vs. Rajeshwari Ramesh Pillai

Facts

The Appellant, Aishwarya Avant Builders Pvt. Ltd., challenged a judgment of the Maharashtra Real Estate Appellate Tribunal. The Tribunal had partly allowed an appeal by the Respondents, Rajeshwari Ramesh Pillai & Anr., setting aside an order by MahaRERA. The Tribunal directed the Appellant to refund Rs. 13,50,000/- to the Respondents with interest. The Respondents had booked a flat for Rs. 1,04,00,110/- as per an allotment letter dated May 28, 2019, and paid Rs. 13,50,000/-. However, the Appellant failed to execute a formal agreement as required by Section 13 of the RERA Act. The Appellant claimed the actual consideration was lower, with the balance being stamp duty, registration, possession charges, and GST. The Appellant attempted to forfeit 10% of the total sale proceeds as liquidated damages, refunding only Rs. 1,99,989/-.

Held

The Court held that the Appellant was in clear violation of Section 13 of the RERA Act by not executing a written agreement despite receiving Rs. 13,50,000/-. The Court found that the allotment letter clearly stated the 'final price' of the flat was Rs. 1,04,00,110/-, and the Appellant's contention that the balance represented other charges was not supported by the letter. Regarding the second issue, the Court found that the MahaRERA order did not contemplate any forfeiture or deduction. The phrase 'as agreed by the respondent' in the MahaRERA order was not a license for the Appellant to deduct 10% of the refund amount. The Appellant's arbitrary deduction of Rs. 11,50,011/- and refunding only Rs. 1,99,989/- was deemed unjust enrichment. The Court noted the Appellant's lack of interest in executing the agreement and its arbitrary actions that led to prolonged litigation. The Second Appeal was dismissed with costs.

Key Issues

1. Whether the Appellant violated Section 13 of the Real Estate (Regulation and Development) Act, 2016, by failing to execute a registered agreement for sale after receiving a substantial amount from the Respondents? The Appellant argued that the allotment letter itself fixed the final price and that the balance amounts represented charges beyond the flat's base price. The Respondents contended that the Appellant's failure to execute the agreement, despite receiving Rs. 13,50,000/-, constituted a breach. 2. Whether the MahaRERA order, directing either execution of an agreement or refund, permitted the Appellant to deduct 10% of the sale proceeds as liquidated damages? The Appellant relied on the allotment letter's forfeiture clause. The Respondents argued that the MahaRERA order did not authorize any such deduction and that the Appellant's arbitrary deduction led to the appeal before the Appellate Tribunal.