Lodha Builders, Directors Asked to Pay Rs2.52 crore to Homebuyer by National Consumer Commission
Updated on 29 March 2019 to include response from Lodha Group.
The National Consumer Disputes Redressal Commission (NCDRC) has ordered Lodha Crown Buidlmart Pvt Ltd and its present directors, Ramandas Pandey and Pranav Goel, to refund a homebuyer over Rs2.52 crore with interest, which includes his deposit and other expenses, after they failed to deliver the promised 60th floor flat in Worli.
A consumer complaint had been filed by Jagannath and Baby Hiray on the basis that Lodha had continued to demand payments from them, even after realising the fact that Mumbai Metropolitan Region Development Authority (MMRDA) would not give the permission to construct beyond 55 floors. The complainants had booked a 3BHK flat on the 60th floor of “Lodha Dioro” costing Rs4.46 crore with a duly registered agreement on 9 May 2012. They also claimed to have paid Rs14 lakh as parking charges for two parking spaces.
The Hirays said that on 19 July 2013 they were informed for the first time by Lodha that the building would be constructed with 55 floors, in order to ensure the completion and possession of flats by the end of 2015. However later in 2014, Lodha revealed that the reason for this was that they did not get permission from the competent authority, which was contrary to their earlier reason.
Counsel for the Hirays argued that the commencement certificate was granted by MMRDA on 20 February 2013 in which permission is granted only up to ground plus 53 floors. It was further argued, that the developer was fully aware that no permission would be granted by MMRDA for a building having more than 55 floors prior to accepting the payment for allotment of flat on the 60th floor to the Hirays.
Furthermore, Hirays stated that Lodha continued to demand payments from them, with dishonest intentions, deliberately and knowingly misrepresenting facts with regards to the number of floors in the building and induced them to book a flat on the 60th floor, consequently charging more for floor rise, view premium, VAT, service tax, and stamp duty.
It was claimed in the complaint that even after receiving the commencement certificate, Lodha neglected to inform the buyer on reduction in number of floors and kept demanding balance amount as per agreement for a flat on the 60th floor.
The buyer finally received a cancellation letter in 2015, after which they filed a consumer complaint seeking Rs2.81 crore along with 18% interest, if the flat could not be given and damages of over Rs1 crore.
In this consumer complaint, Lodha had offered to refund the deposit amounts or a new flat in the same building (on the 50th floor) with the same carpet area, without any extra cost, which the complainant refused.
Lodha claimed that they were proactively making their best efforts to provide the complainant equal benefits, which is being repeatedly refused by them. However, it later came to light that the builder did not have sanction for a flat on the 50th floor either and had misguided the Commission by filing false and fabricated written version on record.
Lodha had received permission to build only 45 floors due to a restriction on height placed by the Airports Authority of India (AAI).
The developer had also initially counter argued that the buyers cannot be considered as consumers as they have deposited amounts by way of cheques and payment vouchers issued by Hiray Enterprises Builders and Developers and have the intentions to use the flat for commercial purposes.
In response, Presiding NCDRC member Prem Narain said, “The assertion of the learned counsel for the opposite parties may have some substance in his argument, but the question is whether the said booking was made for commercial purpose. Even, if the amount has been paid by the Hiray Enterprises Builders and Developers, the booking may be and is for the complainants, as the allotment has been made in the name of Jagannath D Hiray.”
“Though the opposite parties state that they are ready to allot some other flat, however, no specific proposal has been given to the complainants or has been indicated before this Commission. In such situation, when the booked flat cannot be delivered by the opposite parties as the opposite parties could not get permission to build the flat, clearly, the opposite parties are guilty of deficiency in service”, the Commission observed.
Accordingly, they ordered that a refund of Rs2.52 crore along with simple interest of 9% per annum be paid by Lodha within 45 days from the date of the order.
On 29 March 2019, Lodha Builders contacted Moneylife.
In a statement, the Lodha group says, "The unit was sold after approval of plans by the concerned authorities. Well after construction started, height was reduced causing immense hardship to us and the affected customers. As a responsible corporate, we have offered all such affected customers alternative units or refund of their moneys with interest. About 99% of customers have accepted the same - Mr Hiray seems to be acting with ulterior motives and moved Court without giving notice to us. Now that we have become aware of these proceedings, we will present the true facts before the Court and authorities and are confident that justice will be done."