The Supreme Court has ruled that realtors cannot impose conditions such as forfeiture of 20 per cent of the basic sale price of an apartment if the home buyer cancels the deal, as such a clause would amount to "unfair trade practices" under the Consumer Protection Act.

A bench of Justice B.R. Gavai and Justice S.V.N. Bhatti passed the judgment while dismissing an appeal filed by Godrej Projects Development Limited challenging an order passed in October 2022 by the National Consumer Disputes Redressal Commission (NCDRC) directing the realtor to deduct only 10 per cent, and not 20 per cent, of the BSP which it had done in the case of complainant Anil Karlekar.

The complainant had on January 10, 2014, booked an apartment with the relator, Godrej Summit, in Gurgaon. The complainant sought a refund of ₹51,12,310 on the ground that apartments constructed in the area allegedly cost comparatively less and complained that promises made by the builder were not complied with.

The realtor deducted 20 per cent of the BSP for the cancellation. The NCDRC, vide the impugned order, directed the realtor to deduct only 10 per cent of the BSP, i.e. ₹17,08,140, and refund the balance ₹34,04,170 along with simple interest of 6 per cent per annum from the date of each payment till the refund date. The apex court said even in terms of the amended Consumer Protection Act, 2019, the 20 per cent penalty amounted to an "unfair contract".