Builder can’t have third-party deal after realty rates rise: HC:Hindustan Times

MUMBAI: A builder cannot back out of a flat deal after noticing the realty rates are rising and sell it at a higher price to a third party, the Bombay high court held on Wednesday.

A single judge bench of justice Roshan Dalvi restrained Neptune Ventures and Developers from creating any third-party rights to a flat it had agreed to sell for Rs70.83 lakh, only to back out to try and sell for Rs2.05 crore to a third party.

PV Pullikottil approached the high court seeking specific performance of the agreement for the sale of the flat booked by him in June 2009 in a Neptune Ventures and Developer’s project.

Claiming he had paid a first installment of 15% of Rs70.83 lakh, Pullikottil moved the high court after the developer cancelled his booking and entered into an agreement with a third party.

In his suit, Pullikottil had filed a plea seeking an interim order to restrain the developer from creating any third-party rights in the flat.

The developer responded to the plea claiming the purchaser was supposed to pay a lump sum of Rs70.83 lakh and since he failed to do so, they cancelled the booking.

The high court, however, noticed t hat during a oneyear period, the purchaser had paid Rs10.62 lakh in a few installments and the developer accepted the payments. The next installment was to be paid on putting of plinth.

Justice Dalvi noted t his itself was contrary to the developer’s claim, and therefore came to the conclusion there was no default on Pullikottil’s part, but the developer had sought to cancel the booking after getting offers of more than double the amount.

“Defendant Nos. 1 to 4 [developer] are seen to have committed a breach of contract and backed out of the contract with the plaintiff upon the real estate value rising, which always does,” the judge said in this regard. “Defendant Nos. 1 to 4 cannot in law be allowed to do so.”

The court restrained the developer from creating any third-party rights in the flat booked by Pullikottil and not to part with the possession of the flat to anybody else.