Summary
The developer’s cancellation was unjustified because accepted email correspondence reduced the booking requirement from 25% to 15%, which the buyers had exceeded. Their request for a sale agreement to obtain sanctioned loan disbursal accorded with the developer’s statutory duty. A later agreement to sell to a third party could not defeat their prior contractual rights. Completion, registration and possession were directed against payment of the prescribed balance, interest and charges.
Issues
- Whether the booking-payment requirement had been varied and satisfied.
- Whether seeking documentation for loan disbursal constituted buyer default.
- Whether the later third-party agreement defeated the buyers’ claim to completion.
Provisions considered
- Section 4, Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972Required a written, registered sale agreement before acceptance of advance payment; the buyers’ demand for documentation accorded with this duty. (¶ 16–17)
Held
- The developer expressly accepted the email recording a reduction to 15%, also reflected in its later correspondence. Rs.6.5 lakh exceeded that requirement, undermining the stated ground for cancellation. (¶ 15)
- The buyers sought the sale documentation needed to draw their sanctioned loan. That was consistent with Section 4 and could not be treated as unreasonable or a contractual breach. (¶ 16–17)
- The later agreement to sell, made after dismissal by NCDRC, remained subordinate to the buyers’ prior contractual rights and did not justify limiting them to refund. (¶ 17)
- Buyers were to pay the balance calculated from Rs.40,95,801 less Rs.6.5 lakh within four weeks, with 9% annual interest from 20 April 2008 as directed and specified statutory and other charges. Execution, registration and possession were to proceed simultaneously; SCDRC’s Registrar could execute if the developer defaulted. (¶ 18)
Result
Appeal allowed without costs. Completion of sale, registration and possession directed on the prescribed payment and charges; buyers to pay within four weeks. SCDRC Registrar authorised to execute documents on developer default. Interim status quo to continue until completion.