Supreme Court imposes cost of Rs. 1 lakh on builder who left buyer high and dry with neither possession nor refund

  • Aishwarya Iyer
  • 07:24 PM, 25 Nov 2021

The Supreme Court has imposed costs of Rs. 1,00,000/- on Runwal Developers Pvt Ltd for compelling the appellant-buyer to approach the Court for redressal of his grievances for the return of the amount deposited particularly, when the flat in question had been sold by the Builder.

"...we find that the appellant is left high and dry as neither the flat is likely to be made available nor the amount deposited by him has been refunded to him, with or without interest...", observed a bench of Justices Hemant Gupta and V Ramasubramaniam.

Ravindra Tukaram Surve, the appellant had booked a flat admeasuring 1830 sq. ft for a total sum of Rs. 11,55,09,750/- in Tower A in a project being developed by the builder.

He had thus paid a sum of Rs. 6 crores in December 2018 and the possession was expected to be delivered by March, 2019 after obtaining Occupation Certificate.

However, since the possession was not delivered, Surve invoked the jurisdiction of Maharashtra Real Estate Regulatory Authority.

Subsequently, the builder also invoked the jurisdiction of the authority claiming specific performance of the Agreement. Both the applications were decided by the authority in May 2021 declining relief of specific performance, but directing the refund of Rs. 6 crores deposited by the appellant but without any interest.

Runwal filed a writ petition before the Bombay High Court inter alia on the ground that the findings recorded by the Authority are in its favour, therefore, there cannot be any order of refund.

The High Court had then stayed the operation, implementation and execution of the impugned order, against which Surve filed the instant appeal.

Noting it to be an admitted fact that the said Flat had since been sold to somebody else, the Court said it was thus that the Builder was not pressing his relief for specific performance as claimed from the Authority in the first instance.

Accordingly, the top court ordered that the absolute stay granted by the High Court be modified with the following conditions: -

(I) That the Builder shall pay a sum of Rs. 6 Crores within a period of 30 days
(II) The Builder shall pay simple interest on the abovesaid amount at the rate of 10% p.a.
(III) The appellant shall furnish his personal security for refund of the amount of interest, if the first respondent succeeds in the writ petition.
(IV) The Builder shall pay costs of Rs. 1,00,000/- (Rupees One Lakh) to the appellant for compelling the appellant to approach this Court for redressal of his grievances for the return of the amount deposited particularly, when the flat in question has been sold by the Builder.
(V) The payment of interest will be without prejudice to the rights of the Builder in the pending writ petition.

Cause Title: Ravindra Tukaram Surve v Runwal Developers Pvt Ltd & Ors