Mr. Sudhir Gangadhar & Anr. v. Windsor Edifices Pvt. Ltd. & Anr.
Forum: KREAT
Facts:
The appellants acquired a residential apartment through a tripartite assignment agreement involving the original allottee and promoter. They later sought cancellation for personal reasons and demanded a complete refund. The promoter relied on a contractual clause permitting deduction of 10% as liquidated damages.
Issue:
Whether the purchasers could claim a complete Section 18 refund despite voluntarily withdrawing for personal reasons and whether the promoter could forfeit 10% of the entire sale consideration.
Held:
KREAT found that the withdrawal was attributable to the purchasers' personal reasons rather than promoter default. It rejected the argument that collection above 10% necessarily violated Section 13 because the assignment agreement was effectively treated as equivalent to an AFS in the circumstances. However, deduction of 10% of the entire sale consideration was excessive; deduction was limited to 10% of the amount actually paid to the promoter.
Ratio:
Section 18's no-deduction refund protection is linked to withdrawal attributable to promoter default. Where purchasers voluntarily withdraw, contractual consequences may apply, but forfeiture must still be proportionate and legally sustainable.
Practical Impact:
Buyers seeking refund should clearly establish promoter default. Promoters should ensure that forfeiture clauses are proportionate and do not operate as punitive deductions.
Relevant RERA Sections:
Section 13 — Agreement for Sale; Section 18 — withdrawal/refund; Section 11 — promoter obligations.
