An allotment cannot be cancelled unilaterally
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