An al­lot­ment can­not be can­celled uni­lat­er­ally

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Since own­ing a home is a dream for ama­jor­parto­four­pop­u­la­tion, there is acon­stant­de­mand­ofres­i­den­tial and com­mer­cial prop­ertyan­dalotof­pro­ject­sare­un­der de­vel­op­ment by builders and de­vel­op­ers who of­fer special fea­tures to at­tract prospec­tive buy­ers. In this re­gard, the first step to­ward­s­the­re­al­i­sa­tiono­fown­ing a dream home is the is­suance of anal­lot­mentlet­ter bythe­builder to the prospec­tive buyer/ al­lot­tee. Sub­se­quently, both the par­ties en­ter into ana­gree­ment­con­tain­ing the termsand­con­di­tions re­gard­ingth­e­p­ay­men­tand­de­liv­ery of the unit booked etc.

How­ever, the dream of be­ing the proud owner of a prop­erty in near fu­ture is of­ten shat­tered when con­sid­er­able de­lays are caused in the com­ple­tion of the project and many times al­lot­mentsare­can­celled uni­lat­er­ally by the builder.

Non delivery of pos­ses­sion on the time agreed at the time of al­lot­ment and the one-sided na­ture of agree­ment of­ten com­pels the ag­grieved party i.e. the prospec­tive buyer/ al­lot­tee to ap­proachthe­court­soflaw­toseek rem­edy for his griev­ance.

Al­though, many times such de­lays are caused­due­to­lat­e­gov­ern­men­tap­provals, de­lay in get­ting raw ma­te­rial, ce­ment and steel pro­cure­ment, man­power de­lay etc. but what­so­ever be the rea­son, in­re­cent­times, the­courts of law have been flooded with such cases of con­flicts/ dis­putes due to the de­lay in com­ple­tion of the project.

Inare­cent­mat­terofDr. Naren P. Sheth& AnothervsM/s. Lodha Group & An­other, that came up be­fore the Na­tional Con­sumer Dis­pute Re­dres­sal fo­rum (NCDRC), a flat was booked by two se­nior ci­ti­zens (“Com­plainants”), in apro­ject that was­be­ing de­vel­oped in Thane, Mumbai.

They had paid nearly 95% of the sale con­sid­er­a­tion to the con­cerned builder and the bal­ance con­sid­er­a­tion was to be paid at the time of hand over of the pos­ses­sion of the flat. How­ever, fur­ther­chargesto­ward­scarpark­ing and main­te­nance were de­manded by the builder to which the Com­plainants protested by­writ­ing ane-mail to the builder but there was no re­sponse.

The Com­plainants first ap­proached the district fo­rum. Since the district fo­rum had no ju­ris­dic­tion to try this case, their com­plaint was dis­missed but they were granted lib­erty to file the same be­fore the ap­pro­pri­ate fo­rum. In the mean­while, the builder­can­celledtheal­lot­mentof the flat in ques­tion and­sol­dit to a third party, be­fore the case was filed be­fore the NCDRC.

The builder in his plead­ings be­fore the NCDRC stated that no con­cluded con­tract was made be­tween­i­tandtheCom­plainants. The Com­plainants had de­sired rec­ti­fi­ca­tion in the agree­ment to sell as the clauses in the agree­ment to sell did not suit the Com­plainants, there­fore, it was not ex­e­cutedand­con­clud­ed­be­tween the par­ties.

TheNCDRC­did­no­tac­cept­this con­tention of the builder and ob­served that al­though they had not ex­e­cuted the agree­ment to sell, the builder had al­ready re­ceived and ac­cepted lion’s share to­wards con­struc­tion and had also de­manded fur­ther amounts­fromtheCom­plainants.

The NCDRCre­ferred to one of its an­other judge­ment in this re­gard­where­init­wa­sopinedthat terms of the agree­ment are pre- pared and framed by the com­pa­nyi.e. the builder uni­lat­er­ally, an­don­cethe­builder hadal­ready re­ceived con­sid­er­able amount from the ap­pli­cants/ buy­ers, the buy­ers/ ap­pli­cants have no op­tion but to sign the agree­ment.

TheNCDRC­fur­ther­ob­served that the al­lot­ment let­ter wasalso is­sued to the Com­plainants uni­lat­er­ally and ex­pressed its sur­prise onob­serv­ing that al­though the builder had re­ceived al­most the en­tire amount, it can­celled the al­lot­ment of the Com­plainants uni­lat­er­ally, without giv­ing delivery of pos­ses­sion.

NCDRC held that Com­plainants should have been warned and a no­tice should have been sent­be­fore­thecan­cel­la­tionofthe flat al­lot­ted to them.

Thus, theNCDRCheldthatthe ac­tion of the builder uni­lat­er­ally can­celling the al­lot­ment was ar­bi­trary, high handed, despotic an­dar­ro­gantin­na­ture­andthere­fore, di­rected the builder to re­fund the en­tire money paid by the Com­plainants along with in­ter­est of 18% p.a. from the date of its de­posit till its re­al­i­sa­tion and also pay a com­pen­sa­tion of ₹1,00,000.

The first step to­wards re­al­i­sa­tion of own­ing a dream home is the is­suance of an al­lot­ment let­ter by the builder to the buyer

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