Editor's Note: Updated with a scan of one letter written by the Ministry of Overseas Indians Affairs to DLF regarding customer refunds in DLF Chennai project.

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In its communication dated March 25, 2009, Consulate General of India Dubai consul (commerce) Partha Ray has urged DLF Southern Homes MD K K Raman to "kindly take immediate note of the exit notices of these 17 investors and refund their invested amounts in full, at the earliest."

Stating that these set of investors were dissatisfied with the progress of the project especially with regard to certain commitments made at the time of accepting bookings, he said "they have reasons to believe, your company will not be able to deliver."

Mr Ray further said "These investors, having lost faith in your company and the project, have expressed their desire to exit from the project in accordance with the exit route offered by your company. It has been reported that your company has failed to respond to their exit notices."

He also sought from DLF an acknowledgement of the letter and an ‘Action Taken Report’ at the earliest.

For over a year and more, problems for the country’s largest listed developer has only been mounting from onshore as well as offshore customers. If facing ire of domestic customers was not enough, NRI buyers have deployed arm-twisting tactics to ensure that they get their full refund.

The 53-acre project marked the Gurgaon-based realty biggie’s maiden entry in the city for the residential project. The total number of exiters from the project is estimated to be 580 out of its existing base of 1,800 customers. DLF Southern Homes has assured exiters that it would begin the full re-fund process from April 1, 2009, and complete it before 30 September, 2009.

Reaffirming the timeline in its individual communication to customers on Monday, it said "The apartment bookings will be retraded to alternate customers and full refund of money paid by exiting customers will be made. The priority of disbursement of refund shall be based on the order of receipt of the first exit letters."

Outlining the manner in which it would deal with the exit requests, DLF said apart from investment in land, the advance money is used for stocking steel, cement, labour and equipment mobilisation to enable it to complete the project on time.

"Activities in Garden City, DLF OMR, Chennai are in full swing and the customers who have booked will get delivery of their apartments by April-June 2011 quarter. Sustained cash flow is essential for timely completion of the project in overall interest of majority of customers and this needs to be balanced with the needs of some customers who may wish to discontinue for their own reasons. Even though the application form signed by you stipulates forfeiture of earnest money, as a gesture of goodwill, the company proposes to process the refund requests," it said. Meanwhile, DLF has also asked its customers to reconsider its decision to exit on the grounds that the project is on schedule.