Suman Jindal & Anr. v. M/s. Adarsh Developers
Background
The appellants had booked a residential flat with the developer, Adarsh Developers, for about Rs 41 lakhs, with 25% required as the initial booking amount. Through email exchanges, the parties appeared to agree to reduce the booking amount to 15%, which the appellants then paid. The developer later cancelled the allotment, claiming the original 25% had never been paid, and resold the flat to a third party years later. The appellants' consumer complaint was rejected by both the State and National Consumer Disputes Redressal Commissions, prompting this appeal to the Supreme Court.
Decision Breakdown
The Supreme Court examined the email correspondence closely and found that the developer itself had repeatedly acknowledged, in writing, that the booking amount had been reduced to 15%, meaning the appellants had actually paid more than required, so the cancellation was without basis. The Court also held that the developer had a statutory duty under Section 4 of the Karnataka Ownership Flats Act, 1972 to execute a registered sale agreement before accepting advance payments, and the appellants' persistent requests for such an agreement (to enable their bank loan) was not a breach on their part. A later sale of the same flat to a third party, made after the dispute was already pending, could not override the appellants' earlier claim. The Court allowed the appeal, directing the appellants to pay the balance consideration with 9% interest and ordering the developer to execute and register the sale agreement and hand over possession.
Lesson Learnt
In real estate transactions, written communications (including emails) that modify payment terms can be legally binding, and a developer cannot unilaterally cancel a booking or resell a flat to someone else while ignoring its own prior written acknowledgments and statutory obligations to the original buyer.