Dispute Over Maintenance Deposit: NCDRC Orders Mantri Developers To Compensate Mantri Residency Apartment Owners

NCDRC recently directed Mantri Developers to compensate Mantri Residency apartment owners. The consumer forum sided with the complainants ordering the developers to refund the maintenance deposit within 6 weeks along with penal interest of 6 % for delay from September 1, 2017. The court further made it clear that any further delay in the refund would incur an interest rate of 9 %  per annum.

The complainants. who are the owners of 337 flats in the project, alleged that the developers collected a refundable maintenance deposit of Rs 90 per square foot upon possession of their flats, Additionally, a non refundable deposit of Rs 0.61 per square foot was also charged. The maintenance contract initially established with M/S Propcare was set to last from April 1, 2016 to March, 31, 2019 with clear terms stating that refundable deposit would be returned upon termination or expiration of the agreement.

In February 2017, the General Body of the apartment owners voted to terminate the said maintenance agreement, leading to the handover of maintenance responsibilities to the Mantri Residency Apartment Owners Welfare Association, however, despite numerous reminders and requests for return of deposits, the residents claim that the developers failed to return the disputed amount. This led to the complainants filling their case under the Consumer Protection Act, 1996, seeking not only the return of their maintenance deposits along with interest. Additionally, the complainants had also requested compensation of Rs 10 Lakhs each for mental harassment caused by the delay in the refund process. 

In response, the Opposite Parties argued that the complainants do not qualify as consumers under the Act and that the necessary majority required to terminate the contract was missing. They also contended that the terms of the original agreements must be adhered to and that the complainant lacks a valid cause of action.

Siding with the complainants, NCRDC was of the view that returning this amount has not been contention by the Opposite Parties. So, this amount has to be returned by the Opposite Parties No. 1 to 5 in the circumstances of the case and the matter to be decided whether the delay in return of this refundable de will carry any delay compensation by way of simple interest.