Cheque issued under settlement under consent term, dishonoured, tantamount to Unfair Trade Practices

By Dr. Sanjay Chaturvedi LLB, Ph.D.

Jalala Menanon V/s Ayyas Abdul Sayyed (CC006000000000827) Order by Full Bench dated: 13th December 2017

The Complainant alleges that she booked Row house No.1 in Cluster No.6, Spanish Residency situated at Naigaon. On the cancellation of the allotment, the Respondents were liable to refund her money. A settlement was arrived at between the parties and respondents agreed to refund Rs.19,50,000/- by issuing post-dated cheques. The respondents stopped the payment of the cheque dated 19.09.2017 of Rs.3 lakhs and also refused to honour the other cheques. It is her allegation that this practice adopted by the Respondents is an unfair practice and it also amounts to a fraudulent act which attracts Section 7 (f) (c) & (d) of Real Estate (Regulation & Development) Act, 2016.

The Learned Advocate of the Respondents submits that the settlement was arrived at under coercion of the Police in the Police Station and, therefore they issued the cheques. Hence, the Respondents requested to absolve them from honouring the cheques. After considering the submission of the Respondents carefully, it has come to the notice of Maha RERA that there is no dispute between the parties that Rs.19,50,000/- is due from Respondents to the complainant and therefore the Respondents agreed to repay it by issuing post-dated cheques. The Authority does not think it fit to reopen the issue of Respondents’ liability as the Respondents themselves have arrived at the settlement to pay the Complainant Rs.19,50,000/-.

Maha RERA Observed: it is very unfortunate that even after arriving at the settlement and after issuing post-dated cheques, the Respondents want to avoid their liability to honour the cheques on one ground or the other. It also becomes clear from the facts and circumstances of the case that the matter was referred to the Police and then mostly in order to avoid the prosecution and arrest the Respondents agreed to repay the money.

Now they cannot take a somersault and contend that they were under coercion when they settled the matter. They have not complained to any superior officer of police that they were compelled and forced to settle the dispute and issue the cheques. Therefore, Maha RERA does not find any substance in this submission’ Maha RERA is of the opinion that this amounts to unfair practice and fraudulent act also. Section 7 of Act empowers the Authority to revoke the Registration project if such unfair practice or indulgence of the promoter in fraudulent acts are noticed. We feel another opportunity may be given to the Respondents to honour the cheques issued by them and to warn them that if they indulge in such unfair practice or fraudulent acts, Maha RERA shall not hesitate to take stern action against them including the action o{ revocation of registration of their project.

Credits: Landmark Judgements of RERA (Book)

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