A developer's misrepresentation of carpet area in an agreement for sale, coupled with the failure to disclose the sanctioned plan, constitutes a deficiency in service and an unfair trade practice, entitling the consumer to a refund of the consideration paid for the shortfall.

Headnote:(A) Consumer Protection Act, 1986 - Section 2(1)(d), 24A - Maharashtra Ownership Flats Act (MOFA) - Deficiency in service and unfair trade practice - Misrepresentation regarding carpet area in registered agreements - Developers failed to disclose sanctioned plans, leading to inflated area charging - Limitation period - Cause of action arises from the date of discovery of discrepancy in the sanctioned plan - Obligation of promoter to provide true and transparent information. (Paras 12, 13, 21, 25)

Facts of the case:
Complainants, who were tenants in a building undergoing redevelopment, were allotted two flats in the newly constructed building by the builders. The agreements stated a specific carpet area for the flats, based on which consideration was paid. Upon obtaining the sanctioned plan under the Right to Information Act, the complainants discovered that the actual carpet area was significantly less than that mentioned in the registered agreements, reflecting a total shortfall of 83.65 sq.ft.

Findings of Court:
The commission found that the developers had misrepresented the carpet area and suppressed the sanctioned plans to gain wrongful monetary benefits. Since the developers remained ex parte and failed to rebut the evidence, the deficiency in service and unfair trade practice were established. The complainants were entitled to a refund of the value of the missing area based on the original purchase rate.

Issues: 1. Whether the complainants qualified as consumers. 2. Whether the complaint was time-barred. 3. Whether the developer committed deficiency in service and unfair trade practice by misrepresenting carpet area.

Ratio Decidendi: A promoter is under a statutory obligation to disclose true and correct details of a flat including the sanctioned plan. Charging consideration based on inflated area knowingly, while withholding sanctioned plans, constitutes both deficiency in service and unfair trade practice under both MOFA and the Consumer Protection Act.

Result: Complaint partly allowed; developer directed to refund the value of the deficient area with 12% interest, plus compensation and litigation costs.

Table of Content
1. parties' relationship established through redevelopment and sale agreements. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. discovery of area discrepancy as the cause of action. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
3. complainants held to be 'consumers' under the statute. (Para 15 , 16 , 17 , 18)
4. limitation period begins upon discovery of the discrepancy. (Para 19 , 20 , 21)
5. misrepresentation of carpet area is a deficiency in service. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29)

JUDGMENT

(Date: 18-03-2026)

Per: Hon’ble Ms. Poonam V. Maharshi, Presiding Member.

1. The present Consumer Complaint is filed by the Complainants, under the provisions of the Consumer Protection Act, 1986 against the Opposite Party developer M/s. Rachana Projects and its partners, alleging deficiency in service and unfair trade practice.

2. The case of the Complainants, in brief, is that they are purchasers and occupants of Flat Nos. 401 and 402 in the building known as “Rachana Divine”, situated at Dombivli, District Thane. The Complainants submit that they have been residing since the year 1976 in the building known as Parijat Building, occupying Room Nos. 7 and 10, each admeasuring area each about approximately 360 sq. ft. carpet area. The Complainants are lawful tenants of the said premises under the ownership of Mr. Prabhakar Raikar, and they have been regularly paying monthly rent to the said landlord. Owing to the dilapidated condition of the said building, the landlord entered into a redevelopment arrangement with the Opposite Party by executing a Memorandum of Understanding dated 06.07.2012, followed by a Development Agreement dated 14.03.2013, under which the Opposite Party undertook to demolish the old structure and construct a new building on the said land bearing CTS Nos. 7116 to 7120 situated at Village Gajbandhan Patharli, Taluka Kalyan, District Thane. The Opposite Party had undertaken the responsibility of negotiating and settling all terms and conditions with the existing tenants, including the Complainants, and for obtaining their consent letters through proper negotiations, as recorded in the Memorandum of Understanding dated 06/07/2012.

3. Accordingly, the Opposite Party demolished the old building and constructed a new building known as “Rachana Divine”, consisting of stilt, ground floor and upper floors. The Opposite Party, being the promoter, offered residential flats to the tenants and members of the said Housing society by name Rachna Divine Co-operative Housing Society Ltd. on ownership basis. The Complainants submit that, after negotiations and discussions, and in terms of the settlement arrived at with the existing tenants, the Opposite Party agreed to sell/allot flats to the Complainants at a fixed concessional rate of Rs. 2,850/- per sq. ft. of carpet area, as recorded in the Memorandum of Understanding. The Complainants further submit that, relying upon the said assurance and for the purpose of facilitating redevelopment of the Parijat Building, they lawfully waived and surrendered their tenancy rights in respect of the said premises.

4. The Complainants, being tenants, were allotted and agreed to purchase Flat No. 401 admeasuring area 365.98 Sq.ft and 402 admeasuring area 538.77 Sq.ft in the newly constructed building after surrendering there old Room No.7 admeasuring 360 Sq.Ft area and Room no.10 admeasuring 360 Sq.ft. Accordingly, the Complainants executed two separate registered Agreements for Sale dated 19.04.2014 with the Opposite Party. As per the said Agreements, the Complainants agreed to purchase Flat No. 401 admeasuring area 365.98 Sq.ft. for a consideration of Rs. 11,72,600/-, and Flat No. 402 admeasuring area 538.77 sq.ft. for a consideration of Rs. 6,67,312/-, aggregating to Rs. 18,39,912/-, which amount was fully paid by the Complainants to the Opposite Party. The Complainants contend that they also paid additional charges such as legal fees, electricity meter charges, society formation charges a

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