Mumbai: NCDRC orders Rs 33 crore refund, 12% interest to flat buyers

In a significant legal development, the National Consumer Disputes Redressal Commission (NCDRC) has ruled against the developers of the World One project in 'Upper Worli' (Lower Parel), ordering a refund of approximately Rs 33 crore to three flat buyers, along with 12% interest. The commission found the developers responsible for unfair trade practices in promoting a project without the necessary statutory approvals and for a substantial delay in offering possession, TOI reported.

The World One project, touted as an "iconic residential building" and the tallest of its kind worldwide, faced a major setback when construction came to a halt around the 80th floor due to a lack of a No Objection Certificate (NOC) from the Airports Authority of India (AAI).

The case was initiated by Premlata Garg, who received a Rs 13 crore payout. Garg had purchased a three-bedroom flat in 'The World Towers, Upper Worli' in 2014, with possession initially slated for 2015.

The commission's ruling extended to other flat purchasers within the same project. Mukesh Kumar Gupta is set to receive a refund of Rs 10.3 crore with 12% interest, while Agwarwal is entitled to Rs 9.8 crore with similar interest.

According to reports, the developers, Shreeniwas Cotton Mills Ltd. (now merged and incorporated as Macrotech Developers Limited) and The Lodha Group, contested the claims, asserting that the flat buyers were required to terminate the agreement within 90 days of the grace period's expiration. Failure to do so, they argued, implied acceptance of the revised possession date.

However, the commission dismissed this argument, saying, "Considering that the likelihood of a legal offer of possession is remote in view of the absence of the requisite NOC for the proposed height of the building, seeking a refund with compensation for delay is not unjustified". It also said that as "allottees in a premier, iconic project, the complainants cannot be compelled to accept possession and are entitled to seek a refund of the money deposited". The Commission said that no document has been brought on record to explain why the construction of the building was stalled on the 80th floor or why the occupation certificate was only available for up to 43 floors. "In view of there not being any approval regarding the number of floors to be constructed because the AAI's NOC is not available and the offer of possession on the basis of a part-occupation certificate, as per the ATS gives no legal right to the complainants; it cannot be disputed that the complainants were not within their rights to seek a refund of their money with interest by way of compensation along with other reliefs," the commission said.

The developers' assertion that the non-receipt of NOC from the civil aviation department fell under the clause of "factors beyond control" was rejected by the commission, which emphasized that this issue had been known since the project's inception.

In its final assessment, the commission stated, "Unfair trade practice and deficiency in service are writ large on the opposite party," highlighting the seriousness of the developers' conduct.