GODREJ PROJECTS DEVELOPMENT LIMITED versus ANIL KARLEKAR & ORS.

GODREJ PROJECTS DEVELOPMENT LIMITED versus ANIL KARLEKAR & ORS.

The Supreme Court held that given the one-sided nature of the apartment buyer agreement and consistent NCDRC precedent (supported by Maula Bux), reducing forfeiture to 10% of the Basic Sale Price was reasonable and the NCDRC's direction to refund amounts in excess of 10% was not to be disturbed; however, the NCDRC was not justified in awarding interest on the refunded amount because the buyers had sought cancellation only after possession was offered and may have used the funds elsewhere. The appeal was therefore partly allowed and the appellant was directed to pay the balance refund of Rs.12,02,955 to the respondents within six weeks.

Parties
Appellant: Godrej Projects Development Limited; Respondents: Anil Karlekar & Ors.
Jurisdiction
India
Judgment Date
02 February 2025
Procedural Posture
Civil Appeal Under Section 23 of Consumer Protection Act, 1986 (civil Appeal No. 3334 of 2023) / Judgment on Appeal (final)
Legal Topics
Apartment Buyer Agreement, Cancellation of Allotment, Earnest Money, Refund of Money, Forfeiture of Earnest Money, Unfair and Unreasonable Contract, Unfair Trade Practice, Section 74 of the Contract Act, 1872, Section 2(46) of Consumer Protection Act, 2019, Section 2(1)(r) of Consumer Protection Act, 1986
Consumer Protection Contract Law Real Estate Law Constitutional Law Apartment Buyer Agreement Cancellation of Allotment Earnest Money Refund of Money +6 more

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Parties

Godrej Projects Development Limited

Appellant

Anil Karlekar & Ors.

Respondents

Procedural Posture

Civil Appeal Under Section 23 of Consumer Protection Act, 1986 (civil Appeal No. 3334 of 2023) / Judgment on Appeal (final)

Legal Issues

  1. 1 Whether the NCDRC was justified in reducing the contractual forfeiture (20% BSP) to 10% of BSP
  2. 2 Whether the forfeiture clause in the apartment buyer agreement was enforceable or constituted an unfair contract/unfair trade practice
  3. 3 Whether interest should be awarded on the amount ordered to be refunded

Ratio Decidendi

The Supreme Court held that given the one-sided nature of the apartment buyer agreement and consistent NCDRC precedent (supported by Maula Bux), reducing forfeiture to 10% of the Basic Sale Price was reasonable and the NCDRC's direction to refund amounts in excess of 10% was not to be disturbed; however, the NCDRC was not justified in awarding interest on the refunded amount because the buyers had sought cancellation only after possession was offered and may have used the funds elsewhere. The appeal was therefore partly allowed and the appellant was directed to pay the balance refund of Rs.12,02,955 to the respondents within six weeks.