Read how Macrotech Developers has to pay for mis-selling the "World One" Project as the "World's tallest residential tower."
Shreeniwas Cotton Mills Limited, now merged with Macrotech Developers Limited, recently found themselves embroiled in a case surrounding false advertising of their residential project, "World One." In a consumer case filed against them, it was alleged that Macrotech had misrepresented the height of the building, leading to dissatisfaction among buyers. Let's delve deeper into the details of this case and explore the implications it has for both Macrotech and the real estate industry as a whole.
Background of the Case
The case, filed by Damodardas Jewellers, sought multiple reliefs, including the handover of possession of a specific flat in the "World One" project, or alternatively, a refund of the entire amount paid by the complainant. The complainant alleged that Macrotech through it's agent had made false representations about the height and facilities of the building, leading them to book a flat in the project. The claims they made were: “The World’s Tallest Residential Tower”, “Standing Tall Amongst The World’s Most Iconic Tower”, “Paris Gave The World The Eiffel Tower”, “The Burj Khalifa Defines Dubai”, “Presenting The World Towers India’s New”, “Global Icon”, “A Sculptural Statement So Powerful, It will Transform Mumbai’s Skyline Forever.” The Agent further said that “World One” at Mumbai would be the tallest residential building in world i.e. several levels for parking and 117 upper floors with a height of 423 metres. Based on these claims, customer booked Flat No. 3801 on 38th floor in the East Wing of the Project.
Brief timeline
2013 - Airport Authority gave permission for construction upto 284.29 mtrs.
01.12.2014 - Customer decides to buy the property after meeting the agent in November '14.
07.12.2014 - Party deposited the 1st payment with the Developer.
03.06.2015 - Agreement to sell executed.
Sept 2015 - Height restriction revised to 285.06 mtrs. (Still below 423 mtrs)
29.07.2017 - Part OC received upto 50th floor.
Macrotech's Defense
Macrotech, defended that “World One” was initially planned to be the tallest building in the world and the applications for NOCs/approvals were accordingly filed. Macrotech argued that the height restrictions imposed by the Airport Authority of India had prevented them from constructing the building beyond the 89th floor.
They contended that the customer had full knowledge of the height restrictions at the time of booking (through news & media) and that there had been no misrepresentation on their part.
Macrotech had constructed upto 89th floor and the customer had booked flat on the 38th floor and had suffered no loss for not constructing above 89th floor.
The Findings
After considering the arguments presented by both parties, the National Consumer Disputes Redressal Commission (NCDRC) vide Order dated 26.06.2023 found that Macrotech had indeed made false representations about the height of the building in their marketing materials. The NCDRC ruled that Macrotech should refund the entire amount deposited by the complainant, along with 9% interest per annum, within two months of the judgment.
Implications for Macrotech and the Real Estate Industry
The ruling in this case sets a precedent for the consequences of false advertising in the real estate industry. It highlights the importance of transparency and accurate representation of facts to potential buyers. Macrotech's reputation has been tarnished, and they are now legally obliged to compensate the complainant. This ruling serves as a warning to other developers to ensure that their marketing materials align with the actual features and amenities of their projects.
Lessons for Buyers
For buyers, this case serves as a reminder to conduct thorough due diligence before investing in a property. It is essential to verify the claims made by developers and seek legal advice if necessary. Understanding the permissions, approvals, and restrictions associated with a project is crucial to making an informed decision. Buyers should also carefully review the terms and conditions of agreements to protect their interests.
Conclusion
The Macrotech false advertising scandal sheds light on the unethical practices that can occur in the real estate industry. The ruling by the NCDRC holds Macrotech accountable for their misrepresentations and emphasizes the importance of honesty and transparency in dealings with consumers. This case serves as a reminder to developers and buyers alike that accurate representation and due diligence are essential in the real estate market.
As the industry continues to evolve, it is crucial for both developers and buyers to maintain integrity and ensure the highest standards of professionalism. By doing so, they can contribute to a more trustworthy and reliable real estate sector that benefits everyone involved.
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