In a landmark decision, the Maharashtra Real Estate Regulatory Authority (Maha RERA) has directed Godrej Properties to refund a Rs 15 lakh booking amount to a homebuyer who canceled a booking within days for a luxury project in Mumbai’s Kurla area. The project, valued at Rs 4.3 crore, was part of Godrej’s “The Trees Origins” and was initially booked by senior citizen Kishore Shamji Chheda, who soon after sought to cancel due to personal reasons. This ruling reflects Maha RERA’s commitment to safeguarding homebuyers’ interests, even for pre-RERA projects.
Case Background: Dispute Over Booking Cancellation and Refund
In April 2017, Chheda booked an apartment in The Trees Origins project by Godrej Properties, paying an advance of Rs 15 lakh. Within 10 days, however, he decided to cancel the booking, communicating this to the developer. By late May 2017, Godrej Properties informed Chheda that the booking amount would be forfeited. After multiple requests for a refund, with no favorable outcome, Chheda sought intervention from Maha RERA.
Godrej Properties argued that Maha RERA did not have jurisdiction over the matter, as the booking was canceled before the project was registered under the RERA Act. The developer contended that it had applied for promoter status only in July 2017, which they believed removed this transaction from Maha RERA’s oversight.
Maha RERA’s Stand: Citing Section 3 of the RERA Act
Refuting Godrej’s jurisdiction argument, Maha RERA referenced Section 3 of the Real Estate (Regulation and Development) Act, 2016. The regulator pointed out that, as of the Act’s enactment, the project in question was ongoing and lacked a completion certificate, making it subject to RERA’s protections. The regulator stated that forfeiting the entire booking amount without proof of damages or loss contravenes the RERA Act’s objective of protecting homebuyers.
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“The forfeiture of the amount paid by the homebuyer is erroneous and against the purpose of the Act, which is enacted as beneficial legislation to lessen the hardship of homebuyers,” the Maha RERA order stated. As per Maha RERA’s directive, Godrej Properties must refund the full Rs 15 lakh, along with a 2 percent interest rate, by November 30, 2024.
Previous Rulings Against Godrej Properties: A Pattern of Disputes
This case is not the first instance in which Godrej Properties has been asked to refund booking amounts to homebuyers by Maha RERA. In August 2024, the regulator intervened in a case involving an NRI buyer whose Rs 97 lakh booking for the same project was withheld upon cancellation. Maha RERA concluded that Godrej’s actions constituted unfair trade practices and directed the company to refund the entire booking amount.
In a separate instance in March 2024, Maha RERA also intervened on behalf of Ajit Dabhade, who had booked a property in the Godrej Emerald project in Thane, paying Rs 5 lakh in June 2019. Upon canceling due to financial challenges in securing a home loan, Dabhade’s refund request was initially denied, with Godrej forfeiting the amount. Maha RERA later ruled that Godrej should retain only 2 percent of the total property cost, reimbursing Dabhade for the remaining balance.
Implications of the Maha RERA Order: Increased Accountability for Developers
Maha RERA’s decision underscores its authority over ongoing projects and its commitment to protecting homebuyers, especially when terms are unfairly enforced. The ruling sends a clear message to developers regarding transparency and fair trade practices. Maha RERA has reaffirmed that the RERA Act’s protections are applicable even to pre-RERA projects that are still ongoing, thus expanding consumer rights in real estate.
As Maha RERA continues to act on behalf of homebuyers, developers are reminded of the importance of complying with regulatory standards, enhancing accountability, and ensuring that consumer interests are upheld.