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HIGH COURT OF JAMMU AND KASHMIR
TANVEER AHMAD MALIK – Appellant
Versus
STATE OF J AND K AND ORS. (HOUSING AND URBAN DEVELOPMENT DEPARTMENT) – Respondent
JUDGMENT :
1. Petitioner, through the medium of the present writ petition, filed under Article 226 of the Constitution of India, has prayed for a direction in the name of respondents to release/refund an amount of Rs.3.00 lacs in favour of the petitioner, which amount has been deposited by the petitioner as premium for allotment of Flat of 3BHK (Type-B) 2nd Phase of residential apartment at Shahjar Apartments, Bemina Srinagar, advertised by the respondent-Srinagar Development Authority.
2. The grievance of the petitioner, as projected, is that he had applied for the allotment of the residential flat at the aforementioned Shahjar Apartments, Bemina Srinagar, and respondent No.3-Director Land Management, Srinagar Development Authority, Bemina Bye Pass Srinagar, in terms of Communication No. SDA/DLM/2320-33 dated 13.12.2018, informed the petitioner that his application for allotment of said flat was considered, as such, petitioner was requested to deposit the premium amount, as per the following Payment Schedule:-
1. 15% within 45 days after issuance of letter of intent.
2. 15% after 9 months from the date of issuance of letter of intent.(within 15 days)
3. 15% after 18 months from issuanc
The court affirmed that failure to comply with payment terms in a contract justifies forfeiture of earnest money, and a claim for refund is not valid under such circumstances.
The court upheld the forfeiture of earnest money due to the petitioner's failure to comply with contractual obligations, emphasizing that reliefs sought were not maintainable under Article 226.
Flat Buyer’s Agreement – Only a ‘reasonable amount’ can be forfeited by Opposite Party which cannot exceed 10% of total sale price of unit, in case of delay in payment by Buyer.
Forfeiture of earnest money must be reasonable; 10% of basic sale price upheld as valid.
Authorities must clarify payment structures and ensure timely refunds, as consumer rights are pivotal in contractual agreements.
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