PUNE: The National Consumer Disputes Redressal Commission (NCDRC) has mandated a real estate firm and its proprietor to refund the complete principal amount collected from 113 homebuyers, along with interest. This decision follows a 14-year legal battle, with total liabilities expected to surpass Rs7 crore.
The commission discovered that the developer enticed buyers to invest in projects on land that government records indicated had been designated for a public irrigation project since 1978.
The NCDRC panel, including President Justice A.P. Sahi and Member Bharatkumar Pandya, ordered the builder to refund Rs3.16 crore with 9% interest from the payment dates, to be completed within three months. Failure to comply will raise the interest rate to 12% per annum until the full amount is settled.
This ruling, issued on July 1, originated from a complaint by the Akhil Bhartiya Grahak Panchayat, Pune, along with an ad-hoc committee represented by Vijay Shroff and Mukhtar Shaikh on behalf of the 113 buyers of the Shalini project series. “Justice has been served, and we expect the builder to refund the amount promptly, including fines,” stated Vijay Sagar, counsel for the complainants.
According to the complaint, the developer collected funds between 2009 and 2010, despite the land being under the ownership of the state’s minor irrigation department for decades.
The commission highlighted that the homebuyers were kept completely unaware of the land’s acquisition status. The purchase agreements were executed without any disclosure that a 1978 land acquisition award had stated the land was “absolutely vested in government free from all encumbrances.”
Evidence revealed that authorities had declined the developer’s construction approvals as early as 2003, and town planning officials confirmed that the land was in a non-development zone, prohibiting residential use.
The project’s instability was underscored on December 25, 2010, when Zila Parishad authorities demolished the “Sea” building, part of the Shalini Lake View project.
The builder defended its actions by claiming a “bona fide belief” in the property title, asserting that revenue records didn’t reflect the acquisition. However, the commission rejected this argument, noting that the builder continued accepting bookings even after civil courts denied temporary injunctions against government authorities in 2009 and 2010.
Concluding that the developer knowingly accepted funds despite legal barriers, the commission labeled the entire project setup as “a clear eyewash” and a failure to fulfill housing promises. Advocate Shakul R Ghatole, representing the builder, stated, “We are reviewing the order and may contemplate filing an appeal.”
