NCDRC says developer of World One project guilty of unfair trade practice, orders ₹33 crore refund to 3 homebuyers

After the ambitious 'World One' project to develop the “world’s tallest building” in Mumbai's Upper Worli fell short of its initial expectations, the National Consumer Disputes Redressal Commission (NCDRC) recently ordered a refund of about ₹33 crores to three homebuyers..The homebuyers had complained of the developer’s failure to deliver timely possession of the units booked by them in the apartment complex..In a September 6 order, while dealing with three consumer complaints filed by homebuyers Mukesh Kumar Gupta, Anshul Agarwal and Prem Lata Garg, NCDRC Member Subhash Chandra held that Shreeniwas Cotton Mills Limited (real estate developer/ builder) had indulged in unfair trade practices."The opposite party (Shreeniwas Cotton Mills) were clearly deficient in service and guilty of unfair trade practice in not executing the project since they had promoted the project based on “World One” to be the world’s tallest residential building," the order stated. .This is the second such order in recent months. In June, the NCDRC had ordered Shreeniwas Cotton Mills Limited and the Lodha Group, who were the project proponents behind World One, to refund an amount of about ₹ 12 crores to another homebuyer.In the June order, the NCDRC had also concluded that there was a “misrepresentation” in the claims made about the height of the building. In that case, the homebuyer had also told the commission that the claim that World One would become the tallest building in the world was the only reason why a unit was booked at such an expensive price..The World One apartment complex was earlier planned to comprise 117 floors. However, the requisite approvals from the Airport Authority of India (AAI) did not come through to construct the apartment complex at such a height..In the September 6 order, the NCDRC noted that construction was earlier stalled around the 80th floor and that only a “part” Occupation Certificate was secured by the project proponents.The Commission also opined that the builder had failed to adhere to commitments made in the agreement to sell, and instead chose to convey a “rosy picture” to the homebuyers instead of informing them about the true state of affairs.Notably, the NCDRC rejected the builder's contention that the part Occupation (OC) could be construed as a final OC. The Commission opined that the part OC was clearly only for the purpose of “fit outs” and “not for residing.”The Commission added that the builder's attempt to argue for a revised OC system was an attempt by the real estate developer to rewrite the contract with the homebuyers and it amounted to a violation of the Indian Contract Act.Moreover, the NCDRC was unconvinced by the “bald averment” that the homebuyer-complainants had booked multiple units in the project “for speculative purposes” since they were family members. The fact that these complainants had taken bank loans to pay the sale price of the flats and were still paying interest on the same showed that the transaction was not speculative, the Commission said..The NCDRC, therefore, ordered that the lead complainant Mukesh Kumar Gupta be refunded an amount of ₹ 13.06 crores with interest @12% per annum in addition to a litigation cost of ₹50,000.The other complainants were ordered to be paid ₹9.84 crores and ₹10.27 crores, with a 12% interest as well as litigation costs of ₹50,000 each.The amounts have to be paid within 8 weeks, the Commission added, failing which penal interest of 15% would be imposed instead of 12%..The homebuyers were represented by advocates Vimal Kirti Singh, Rahul Singh, Nishant Shokeen and Sumita Singh of Resolute Legal and advocates Varun Lal, Sanjay Ghosh, Rupali Ghosh, Sidharth Singh, Nandita Seth and Aashima ThukralShreeniwas Cotton Mills Limited was represented by Senior Advocate Siddharth Bhatnagar along with advocates Rahul Kriplani, Rea Balla, Supraja V and Aditya Pratap Chauhan. .[Read NCDRC Orders]