Mumbai builder sells same flat twice, couple to get Rs 1.05 crore refund after 13 years

“A builder or developer accepting the entire sale consideration, failing to construct the project, failing to register the statutory agreement, selling the allotted flat to a third party, and subsequently issuing bogus cheques towards an admitted refund liability constitutes a case of deficiency in service and severe unfair trade practice,” said the commission on June 17, adding that the conduct of the developers went far beyond a simple delay in handing over possession.

Instead of refunding the money, the developers initially proposed adjusting the amount paid towards another housing project called ‘Bay View’ in Mazgaon. (AI-generated image)

Deprived of life savings: Court

• Awarding relief, the commission observed that the complainants had been deprived of their life savings for more than 10 years and had suffered continuous financial and emotional hardship.
• The bench noted that the couple had repeatedly travelled over 150 km from Mangaon in Raigad district to Mumbai to pursue the matter, only to be met with false assurances and delays.
• It further observed that a mere refund would not adequately compensate the complainants for the decade-long ordeal, mental agony and harassment they endured.

Dream home booking in 2013

According to the complaint, the dispute began in 2013 when the couple was approached by the developers regarding a residential project at Dongri in south Mumbai.

The builders allegedly represented that construction would commence in November 2013 and possession would be delivered within 36 months after obtaining the required approvals. Relying on these assurances, the complainants booked a 660 sq ft flat for Rs 60 lakh. An allotment letter was executed on November 28, 2013.

Before the allotment letter was signed, the couple had already paid Rs 30 lakh through RTGS on August 7, 2013. They later paid another Rs 10 lakh in cash through three instalments. The commission noted that the buyers arranged part of the money by selling gold ornaments, hoping to secure a permanent home in Mumbai.

However, despite collecting Rs 40 lakh, the developers failed to complete the project and later admitted that they had not obtained the necessary permissions.

Buyers adjust amount against another project

Instead of refunding the money, the developers proposed adjusting the amount paid towards another housing project called ‘Bay View’ in Mazgaon.

The builders also assured the complainants that they would receive Rs 10 lakh as compensation for the failed Dongri project, taking the adjusted amount to Rs 50 lakh. The couple agreed to the arrangement after being left with little choice.

Under the revised agreement, they were promised flat number 503 in the project. The total consideration for the flat was eventually fixed at Rs 90 lakh, with Rs 50 lakh adjusted from the earlier project and the remaining Rs 40 lakh paid between January 2016 and September 2018.

The commission found that despite receiving the entire amount, the developers failed to execute and register an agreement for sale as required under the Maharashtra Ownership Flats Act.

Refund promise, bounced cheques

In September 2019, the developers acknowledged that they could not deliver possession of the Mazgaon flat either.

According to records before the commission, they offered to refund Rs 90 lakh along with Rs 25 lakh as compensation, admitting a total liability of Rs 1.15 crore through a written communication dated September 7, 2019.

Three cheques aggregating Rs 1.15 crore were subsequently issued. But when the complainants presented them for encashment, all three were dishonoured because of insufficient funds.

The developers later executed a Memorandum of Understanding on June 29, 2021, acknowledging liability of Rs 1.25 crore and issued another set of cheques. Those cheques were also dishonoured.

The commission noted that the repeated acknowledgements of liability, followed by issuance of cheques that bounced, established a continuing pattern of unfair conduct.

Flat sold to third party

The complainants eventually discovered that flat, despite being allotted to them and paid for in full, had been transferred to a third party.

The commission said this made it impossible to grant possession and left the buyers with no option except seeking a refund.

“When a developer accepts the full consideration but fails to construct the flat or unlawfully sells it to a third party, the consumer is left with no viable remedy other than to seek the return of their hard-earned money,” the commission said.

Allegations remain unchallenged

• The commission proceeded ex parte after the opposite parties failed to appear despite notices and a public notice published in February 2025.
• After examining allotment letters, payment receipts, bank statements, memorandums of understanding, dishonoured cheques and police complaints, the commission concluded that the allegations remained completely unchallenged.
• It found that the builders had accepted full payment, failed to construct the promised project, shifted the complainants between projects, sold the allotted flat to another buyer and repeatedly issued cheques that were dishonoured due to insufficient funds.

60 days’ time to comply

• Allowing the complaint partly through its June 17, 2026, order, the commission directed the developers and associated parties to jointly and severally refund Rs 1.05 crore to the complainants, along with interest at 10 per cent per annum from June 29, 2021, the date of the Memorandum of Understanding, until actual payment.
• The commission also awarded Rs 50,000 as compensation for mental agony, physical harassment and financial distress, besides Rs 25,000 towards litigation costs.
• The builders have been given 60 days to comply with the order. Failing that, the interest rate on the principal amount will rise to 15 per cent per annum until the entire amount is realised.

Takeaway for homebuyers

The ruling reinforces that developers cannot indefinitely retain buyers’ money while failing to deliver promised homes.

It also underscores that repeated written acknowledgements of liability, bounced refund cheques and sale of an allotted flat to a third party can expose builders to substantial refund orders, interest liabilities and findings of unfair trade practices under consumer law.

Consumers facing similar grievances may contact the consumer helpline in their respective states (Maharashtra contact: 022 22821810, 22821770) or dial the National Consumer Helpline at 1915 for assistance.