After 32 years, a man will be compensated for a flat which he booked but was never constructed.
After 32 years, a man will be compensated for a flat which he booked but was never constructed.
Now, the developers have offered to pay damages. Although the man refused the offer, a division bench of justice DK Deshmukh and justice AV Mohta of the Bombay high court asked the developers to pay damages along with interest and earnest amount by the second week of January 2012.
On July 1, 1979, Jamnadas Mathradas came across an advertisement by Baf Hira Builders Private Limited owned by NL Hiranandani and SM Bafna.
Mathradas booked a 2BHK flat at BafHira Nagar in Malad (West). He paid Rs5,500 as earnest money by a cheque on July 2, 1979, to the builders and paid cash to Laxmi Housing Agency, an alleged sole agent. Mathradas was told that the construction would commence by April 15, 1981 and would be completed in 18-20 months.
There was no specific agreement between Mathradas and the developers except the payment/acknowledgment of earnest money based upon the offer.
As the construction did not start, Mathradas sent a notice to the developers in on October 18, 1982. The developers shelved the plan and the property was purchased by Laxmi Developers in August 24, 1984, who began construction.
The developers were willing to offer Mathradas a flat in the new construction based on new terms and conditions, but he insisted that they execute the first agreement. Mathradas filed a suit in November 1986 against Bafna and Hiranandani for breach of contract. The suit was dismissed by the single judge on October, 24, 2008, which Mathradas challenged before the division bench. The division bench, too, refused to give relief to Mathradas.
Laxmi Developers have completed their construction and have created third party rights. The court observed: “There was no question of granting any compensation for the breach as alleged, except refund of earnest money.”
Counsels for the developers — Gaurav Doshi and Vivek Kantawala — offered to pay Rs1.67 lakh towards damages with an interest from the date of the order.
They also said they would repay the earnest amount of Rs5,500 with 10% interest per annum from July 3, 1979.
Though Mathradas refused the offer, the court asked the developers to pay the amount within four weeks.
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