Holding that one-sided agreement between homebuyers and real estate companies which is totally tilted in favour of the developer cannot be enforced, Supreme Court on Monday said that developers cannot deduct unreasonable amounts if the buyer seeks cancellation and it should not be more than 10% of basic sale price (BSP). A bench of Justices B R Gavai and S V N Bhatt said the contractual terms which are ex facie one-sided, unfair and unreasonable would constitute unfair trade practice as per the aforesaid definition of unfair trade practice and turned down the plea of real estate company Godrej Projects Development Ltd which said it should be allowed to forfeit 20% of the amount which was part of the agreement with a buyer. Section 74 of the Indian Contract Act, 1872, inasmuch as, such a forfeiture does not amount to imposing a penalty, then Section 74 would be applicable. This Court has further held that under the terms of the contract, if the party in breach undertook to pay a sum of money or to forfeit a sum of money which he had already paid to the party complaining of a breach of contract, the undertaking is of the nature of a penalty. NCDRC had allowed the company to deduct only 10% of the BSP i.e. Rs.17.08 lakh only towards cancellation and refund the balance amount.
 

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