Homebuyer Not Entitled For Refund On Cancellation If Payment Is Less Than 10% Of Sale Consideration: Haryana RERA
Haryana Actual Property Regulatory Authority (Authority) bench comprising of Ashok Sangwan (Member) denied refund to a homebuyer whose allotment was cancelled resulting from non-payment of instalments, holding that the homebuyer had paid lower than 10% of the full sale consideration.
The general rule adopted by Haryana RERA is that if a builder cancels the allotment resulting from non-payment of instalments, the homebuyer is entitled to a refund of the quantity paid after deducting 10% of the full sale consideration as earnest cash.
Background Info
Homebuyer (Complainant) booked two flats within the builder’s (Respondent) challenge named “The Heartsong” positioned in Sector 108, Gurugram and was provisionally allotted two flats particularly Unit No. B5/202 (Unit 1) on 05.04.2013 and Unit No. B4/102 (Unit 2) on 13.05.2013. Nevertheless, no Purchaser’s Settlement was ever signed. Regardless of repeated reminders from the builder to execute the Settlement and make additional funds, the homebuyer did not act.
For Unit 2, the homebuyer paid Rs.7,00,000 however didn’t clear additional dues, resulting in its cancellation on 19.09.2013. The builder adjusted this quantity towards earnest cash and delayed cost curiosity, leaving no refundable quantity.
The homebuyer later expressed incapability to pay resulting from monetary constraints and requested the merger of each models into Unit 1. The builder conditionally agreed however requested the homebuyer to clear excellent dues of Rs. 18,00,000. Because the homebuyer once more did not comply, Unit 1 was additionally cancelled on 28.02.2017 and later offered to a 3rd celebration.
Subsequently, the homebuyer approached the Authority searching for a refund of Rs. 11,36,802 after forfeiture of the reserving quantity of Rs. 7,00,000 together with curiosity on the prescribed charge from the due date of cost until the date of precise refund.
Contentions of Builder
Builder contended that the Purchaser’s Settlement for Unit 1 was despatched on 01.07.2013. Regardless of reminders on 23.01.2015 and 15.05.2015, the homebuyer failed to finish the formalities or make the required funds.
The builder additional contended that for Unit 2, a number of reminders had been issued for cost. As no cost was made, a ultimate discover was despatched on 23.08.2013 and the allotment was terminated on 19.09.2013. Earnest cash was forfeited as per the agreed phrases.
The builder additionally contended that though Unit 2 was already cancelled, the homebuyer requested adjustment of that quantity in the direction of Unit 1. As a goodwill gesture, the builder provided to switch Rs. 5.86 lakhs topic to clearance of dues by 26.11.2013. Because the homebuyer defaulted once more, the supply was withdrawn.
Lastly, the builder contended that Unit 1 was terminated on 28.11.2013 and later reinstated on homebuyer’s request. Nevertheless, no funds had been made thereafter. As a consequence of continued default, the unit 1 was lastly terminated on 28.02.2017.
Commentary and Path by Authority
Authority noticed that the cancellation of each flats was a results of the homebuyer’s continued failure to make well timed funds regardless of a number of reminders and alternatives. The homebuyer neither executed the Purchaser’s Settlement nor cleared the excellent dues.
Authority held {that a} builder can’t be anticipated to maintain an allotment open indefinitely when the homebuyer fails to satisfy contractual obligations.
Authority famous that with respect to Unit 1, the homebuyer had paid solely Rs.12,50,000, which was lower than 10% of the full sale consideration of Rs. 1,28,12,050. Subsequently, held that the quantity was rightly forfeited as earnest cash upon cancellation.
Authority noticed that for Unit 2, the homebuyer’s declare of merger with Unit 1 lacked proof. It relied on the builder’s reply stating that the merger was conditional on clearing dues by 26.11.2013, which was not accomplished. Authority additionally referred to the builder’s electronic mail dated 05.03.2014 whereby the builder rejected the merger request.
Accordingly, the Authority held that each models had been cancelled as a result of homebuyer’s default and homebuyer isn’t entitled to any refund. Therefore, the criticism was dismissed.
Case – Sanjiv Anand Versus M/s. Experion Builders Pvt. Ltd.
Quotation- Grievance no. 2245 of 2025
