Sunday, July 21, 2024

Supreme Court Upholds NCDRC: Mantri Developers Ordered to Refund Bengaluru Project’s Deposit

In a significant development, the Supreme Court has upheld the National Consumer Disputes Redressal Commission (NCDRC) order mandating Mantri Estate Management Pvt Ltd to refund a refundable maintenance deposit of around Rs 7.1 crore to homebuyers in a Bengaluru project. This decision not only brings relief to affected homebuyers but also sets a precedent for similar cases in other projects.

The SC order, dated October 6 and released in November, stated, “We are of the opinion that the NCDRC has given just and valid reasons for the conclusion arrived at. We see no reason to interfere with the well-reasoned order.”

This legal matter involves Mantri Developers, including Mantri Estate Management, as defendants in a class-action suit, implying that the ruling carries implications for all homebuyers involved. However, it coincides with numerous unresolved cases at the Karnataka Real Estate Regulatory Authority (RERA), where developers are yet to refund maintenance deposits.

Case Overview:

The dispute stems from the Mantri Residency project in south Bengaluru, where Mantri Estate Management collected a lump-sum refundable maintenance deposit from each flat buyer post-project completion. This deposit was transferred to Propcare Private Limited in 2016, responsible for project maintenance. The agreement stipulated that the deposit would be refunded to homebuyers upon contract termination or expiry, valid until 2019.

Despite the termination of the contract in 2017 and the subsequent handover of maintenance responsibilities to the Mantri Residency Apartment Owners Welfare Association, the developer failed to initiate the deposit refund. Subsequently, homebuyers sought recourse through the NCDRC.

NCDRC Decision:

The NCDRC underscored the existence of a 2004 maintenance agreement, explicitly stating that the refundable maintenance deposit would be returned upon the agreement’s termination or expiry. The Commission directed the developer to refund the amount within six weeks, accompanied by a 6 percent delay compensation. Further delays would incur a 9 percent annual interest.

While the developer appealed this order to the Supreme Court, the apex court opted not to interfere, thereby upholding the NCDRC’s decision.


This ruling stands as a watershed moment for homebuyers, underscoring their rights concerning maintenance deposit collections. As many developers adopt similar practices, this precedent could reverberate across ongoing RERA cases in various states, potentially offering relief to affected homebuyers.

Dhananjaya Padmanabhachar, President of Karnataka Home Buyers Forum, emphasized the importance of RERA compliance, specifically highlighting Section 17. This section places the onus on promoters to transfer common areas to the association of allottees and maintain the apartment until such a transfer occurs. Advocates anticipate that the NCDRC and Supreme Court order will serve as a guiding principle for addressing analogous issues in other states.

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