Uncancelled allotment letters can create a binding sale arrangement, supporting refund with interest when possession is delayed.

An allotment letter that remains uncancelled can evidence a concluded agreement for sale, and a later memorandum of understanding for an alternative arrangement will not displace the original transaction if it was never acted upon. On that basis, complaints based on the original allotments were maintainable. Where the project remained incomplete for years, possession was not delivered, and substantial consideration had already been paid, the allottee could withdraw and claim refund with interest and compensation under the real estate framework, with interest to follow the applicable Maharashtra rules. The dismissal of the complaints was set aside and refund with costs directed.

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Issues: (i) Whether the complaints were maintainable and whether the allotment letters evidenced a binding agreement for sale despite the subsequent memorandum of understanding; (ii) whether the allottees were entitled to refund with interest and compensation under the real estate statute.

Issue (i): Whether the complaints were maintainable and whether the allotment letters evidenced a binding agreement for sale despite the subsequent memorandum of understanding.

Analysis: The original transaction concerned two flats in the promoter's project, for which substantial consideration had been paid and allotment letters had been issued. Those allotment letters were not cancelled and, on their terms and surrounding conduct, reflected a concluded arrangement for sale and purchase. The later memorandum of understanding was only a proposed substitute arrangement concerning different flats in another project, and it was never acted upon. Since the later understanding did not supersede the earlier transaction, the complaints based on the original allotments remained maintainable.

Conclusion: The complaints were maintainable, and the allotment letters were treated as evidence of an agreement for sale.

Issue (ii): Whether the allottees were entitled to refund with interest and compensation under the real estate statute.

Analysis: The project remained incomplete for years, the allottees had already paid about ninety per cent of the price, and possession had not been delivered. The statutory scheme protecting allottees was applied to hold that withdrawal from the project and refund of the amount paid, together with interest and compensation, were justified. The rate of interest was directed to be governed by the applicable Maharashtra rules.

Conclusion: The allottees were entitled to refund with interest and compensation.

Final Conclusion: The appellate tribunal set aside the dismissal of the complaints, upheld the allottees' right to withdraw from the project, and directed refund of the amounts paid with interest and costs.

Ratio Decidendi: Where an allotment letter reflects a concluded sale arrangement and remains uncancelled, a later unacted memorandum of understanding for an alternative transaction does not displace the original agreement for sale; if possession is not delivered in an incomplete project, the allottee may seek refund with statutory interest and compensation.

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