In the Uttar Pradesh Real Estate Appellate Tribunal
Before D.K. Arora, Chairman and Rajiv Misra, Member (Administrative))
Aadi Best Consortium Pvt. Ltd. … Appellant;
Versus
Gita Devi … Respondent.
Appeal No. 81/2020
Decided on June 7, 2021
1. The present appeal has been filed by M/s Aadi Best Consortium Pvt. Ltd., Ghaziabad (the “Appellant/Promoter”) under section 44 of the Real Estate (Regulation and Development) Act, 2016 (the “Act”) aggrieved by the orders dated 09.04.2019 and 16.09.2019 passed by the U.P. Real Estate Regulatory Authority (the “Regulatory Authority”), wherein vide order dated 09.04.2019 the Regulatory Authority has directed the appellant to refund the total deposited amount to the respondent (complainant) along with interest at the rate of MCLR+1% in two installments-the first installment of 50% within 45 days of uploading of the order and second installment of balance 50% within one year or on resale of the flat in question, whichever is earlier. The Appellant was further directed that in case bank loan has been taken by the respondent against the flat, then refund of loan amount along with interest will be paid to the bank first and balance amount will be paid to the respondent (complainant). The Regulatory Authority vide order dated 16.09.2019, rejected the rectification application of the appellant/promoter and reiterated the order dated 19.04.2019.
2. In the instant appeal, the appellant prayed for setting aside of the impugned orders dated 09.04.2019 and 16.09.2019 of the Regulatory Authority passed in complaint no. 9201819756, with a further prayer to direct the respondent to make balance payment along with interest on delayed payment to the appellant and to take possession of the completed unit. The appellant further prayed to issue a direction to the respondent to compensate the appellant for the cost and damages for causing mental harassment and agony.
2.1 The case was registered as Misc. Case No. 597/2019 initially, and subsequently converted as Appeal No. 81/2020.
3. A perusal of the complaint filed by the respondent (complainant) before the Regulatory Authority on 24.09.2018 (complaint no. 9201819756) reveals that the respondent(complainant) has submitted that she had booked flat no. 1706 in Tower L-2 in Cloud-9 Towers Project of the appellant by making full payment of Rs. 35.5 lacs by April 2014, and the date of completion as per builder buyer agreement was 01.01.2016. It was complained that not only the possession was not delivered in time, but also the appellant was demanding more payment from the respondent (complainant). The complainant had sought relief for refund of Rs. 35.5 lacs plus bank interest.
4. The Regulatory Authority vide its order dated 09.04.2019 observed that the appellant is not entitled to get benefit of force majeure for the delay in completion of the Project. Further, it was observed that as per the provisions of Section 18(1) of the Act, the respondent (complainant) is entitled to receive refund of her money deposited, along with interest as the complainant wishes to withdraw from the project on account of delay in completion of the project. The Regulatory Authority has also examined the issue of admissibility of interest on the amount paid by the complainant in detail and relying upon the judgment of Hon’ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India, (2018) 1 AIR Bom R 558 and on clause 9(II) of the U.P. Real Estate (Regulation and Development) (Agreement for Lease/Sale) Rules, 2018 (the “Rules, 2018”) observed that the respondent (complainant) is entitled to get an interest at the rate of MCLR+1% on the amount paid.
4.1 It is noted from the record that the appellant had moved a rectification application before the Regulatory Authority submitting that since the Completion Certificate (C.C.) has been obtained on 07.03.2019, therefore the matter be reconsidered and direction be issued for giving possession to the complainant, and execution of the Regulatory Authority’s order dated 09.04.2019 be stayed. The Regulatory Authority vide order dated 30.07.2019, stayed the execution of order dated 09.04.2019, and directed the office for placing the case before the concerned Bench (Bench No. 1) of the Regulatory Authority for hearing. The Bench No. 1 of the Regulatory Authority rejected the rectification application vide order dated 16.09.2019 and observed that the order dated 19.04.2019 will stand as such.
5. The respondent was initially represented by Shri Prachish Pandey, Advocate, and Shri Sachin Srivastava, Advocate, but in subsequent hearings, the respondent in person argued the case herself.
5.1 Heard Shri V.K. Singh Bisen, learned counsel for the appellant and Ms. Gita Devi the respondent in person.
6. The submissions of the learned counsel for the appellant are summarized as follows:—
6.1 The appellant had completed the project well in time and applied to Ghaziabad Development Authority (GDA) for the Completion Certificate (C.C.) on 01.08.2018, but the GDA raised certain issues relating to compounding, which were resolved by the appellant and thereafter the GDA issued a part Completion Certificate on 07.03.2019.
6.2 In spite of repeated requests, the respondent has not signed Builder Buyer Agreement (the BBA) and for the said purpose, letter was also sent to the respondent on 20.06.2016.
6.3 As Per Builder Buyer Agreements entered between the appellant and some other customers, the timeline for possession was given as 48 months from the date of starting of construction and since the construction was started in December 2014, the 48 months’ time has been completed in December 2018 only.
6.4 The land/plot on which the project is situated was allotted to the appellant by the GDA and later on, on commencement of the construction, the Provincial Armed Constabulary (PAC) raised a dispute with GDA which took about three years to resolve. The appellant had also approached the Hon’ble Allahabad High Court by filing writ-C No. 43343 of 2013 titled as Aadi Best Consortium Pvt. Ltd. v. District Magistrate/Collector, Ghaziabad; and the Hon’ble High Court was pleased to direct the GDA and the PAC to resolve the dispute vide its orders dated 30.08.2013 and 03.12.2014.
6.5 After completion of the project, the appellant had sent offer of possession to the respondent on 28.02.2018 with a request to take possession after clearing the outstanding dues.
6.6 The respondent has deposited only Rs. 29,65,900/= including service tax, but has intentionally and deliberately mentioned the amount as Rs. 35.5 lacs while filing complaint with the Regulatory Authority. Further, the respondent has intentionally and deliberately not signed the Builder Buyer Agreement (BBA) despite repeated request and has also not paid Rs. 1,77,132.87p. as well as fee of electricity connection, one time lease rent, building insurance and maintenance charges etc.
6.7 It is further submitted that when the appellant gave offer of possession in the month of February 2018, the respondent filed complaints with the Regulatory Authority, the GDA and lodged an FIR as crime no. 3261/2018 at Police Station Indira Puram under Sections 354/511 of Penal Code, 1860 on forged and baseless grounds.
6.8 It is further submitted that after 19.07.2015, the respondent has not made any payment to the appellant, and as such respondent has become a defaulter.
6.9 Section 18 of the Act clearly stipulates that a developer is liable to refund the amount to the allottee if he fails to complete or is unable to give possession on the date specified in the agreement. Therefore, in the absence of agreement for sale, Section 18 of the Act has no role to play.
7. The appellant has taken the following grounds in its appeal (Page no. 19 to 24):—
7.1 As the impugned orders dated 09.04.2019 and 16.09.2019 passed by the Regulatory Authority are erroneous both on law as well as on facts.
7.2 As the impugned orders are totally based on conjunctures and surmises and no cogent reasoning has been given by the authority while passing the impugned orders.
7.3 As the impugned order passed for refund of Rs. 35,50,000/= alongwith interest has been granted after receipt of completion certificate.
7.4 As a refund of Rs. 35,50,000/= was ordered even though the respondent had not submitted any evidence for payment of the alleged amount.
7.5 As the impugned order has been passed on the alleged ground that the possession has been delayed even though the respondent has not submitted any evidence for alleged date of possession.
7.6 As the impugned order has been passed without application of mind and without duly appreciating the fact and without sifting the weighing documents available on record.
7.7 As the refund of the amount paid alongwith interest will violate the objective and scheme of RERA Act. The appellant relying on Section 34 and 32 of the Act concluded that the functions of the Regulatory Authority include the development of Real Estate Sector. Granting refund to a few odd home buyers will definitely affect the interest of all other home buyers who are willing to have possession of the unit.
7.8 As the decision of the Regulatory Authority to grant refund in this case is against the spirit, intention and provisions of the Act and settled position of law while relying on the judgment of Hon’ble Supreme Court in the case of Chitra Sharma v. UOI [Writ Petition (Civil) No. 744 of 2017, decided on 09.08.2018].
7.9 As the Regulatory Authority has ignored that there is no builder buyer agreement, and payment receipts have not been filed by the respondent.
7.10 As the respondent herself is in default and has not paid the final demand (Rs. 1,77,133/=) raised by the appellant on 20.02.2018.
7.11 As the Regulatory Authority has not considered that in terms of Section 19 of the RERA Act, every allottee who entered into agreement for sale shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement, failing which, he shall be liable to pay interest.
7.12 As the appellant had completed the project well in time, had applied for the completion certificate on 01.08.2018, and has also received completion certificate on 07.03.2019.
7.13 As the respondent on getting the final demand letter started moving different forums like GDA, U.P. Police, U.P. RERA, etc.
8. The respondent (who argued the case in person) while vehemently opposing the appeal, submitted that:—
8.1 The appellant company has fraudulently obtained money from the respondent on false promise and kept on delaying the possession of the flat.
8.2 The respondent besides giving Rs. 26,60,000/- through cheque and Rs. 3,00,000/- in cash, which has admittedly been shown by the appellant as cheque; the respondent had also given Rs. 5,90,000/- in cash to the appellant company and against the same temporary (Kacchi) receipts have been issued to the respondent which are dated 28.02.2014 and 09.03.2014 for amounts of Rs. 2,50,000/- and Rs. 3,40,000/- respectively.
8.3 The respondent while denying the averments made by the appellant in para 5.5 of the Appeal submitted that in spite of repeated requests of the respondent the appellant’s company did not sign any contract with her and kept on taking money on one pretext or the other. More than 4 years have passed since inception of the project and inspite of taking the entire amount from the respondent the appellant company had the audacity of sending another bill of Rs. 2,93,613/- to the respondent.
8.4 The respondent personally visited on several occasions to the appellant’s office and insisted for registry and possession, but the company again asked for payment of Rs. 1,77,132/-, which was refused by the respondent as the respondent had already been made to suffer since long, inspite of making full payment.
8.5 Despite depositing Rs. 35,50,000/-, when the respondent failed to get possession, she was compelled to raise her grievance before the Regulatory Authority. When the respondent was threatened by the company, she had no other option except to lodge an FIR against the company (appellant).
9. The appellant disputed the two hand written receipts of the cash payments of total Rs. 5.9 lacs and stated that respondent deposited total amount of Rs. 29,65,900/- only (including taxes) by way of cash and cheques, out of which Rs. 3.00 lacs has been deposited by cash and appellant had issued receipts against all payments received through cash and cheques by mentioning customer I.D. on receipts. Mr. B.S. Jain, DGM (Finance and Marketing) of the appellant/promoter was authorized to receive cash and cheques from the customers and in lieu of such payments printed computerized receipts have been issued to all its customers, including the respondent. The company or its authorized officials have never issued any hand written receipts to any customer. It was submitted that the two receipts totaling to Rs. 5.9 lacs annexed by the respondent are forged and fabricated.
9.1 Further submission of the appellant is that the cost of flat was Rs. 31,43,032.88p. (with tax) and respondent deposited Rs. 29,65,900/- (with tax) against which appellant company had issued computerized receipts duly sealed and signed by the authorized signatory, and after adjustment, the amount of Rs. 1,77,132.88p. remained due in the year 2015, and against about Rs. 1.77 lacs, no prudent person will deposit Rs. 5.90 lacs, as is being alleged by the respondent and it shows that respondent has made forgery and has prepared two hand written receipts of Rs. 5.9 lacs for harassing the appellant and nothing else.
10. In order to examine the issues involved in the present appeal, we frame the following questions:—
(i) Whether the Project in question of the appellant is delayed and if yes, on whose account?
(ii) Whether giving offer of possession by the appellant/promoter without obtaining Completion Certificate/Occupancy Certificate, legally justifiable?
(iii) Whether the claim of appellant/promoter seeking benefit of force majeure in giving possession of the flat in question is legally justifiable?
(iv) Whether the order of RERA directing the appellant/promoter to refund of money alongwith interest is in accordance with Scheme of the Act of 2016; Rules, 2016; Rules, 2018 and the U.P. Apartments Act, 2010 (as amended 2016)?
(v) Whether the appellant/promoter can be permitted to rescue the responsibility of completing the project and handing the flat over to the allottee within time, in the absence of Builder Buyer Agreement?
(vi) Whether the Regulatory Authority erred in directing for refund of money to the respondent/complainant after receipt of the Completion Certificate by the appellant/promoter and the order of refund is in violation of the aims & objects as well as against the scheme of the Act of 2016?
(vii) Whether in the absence of builder/buyer agreement, the provisions of the Act of 2016 would be applicable and respondent/complainant is entitled for refund of the amount deposited by her under the Scheme of the Act of 2016?
11. We have examined the submissions of learned counsel for the appellant, and the respondent in person, as well as gone through the documents on record in the Appeal, and the impugned order of the Regulatory Authority dated 09.04.2019, whereby the Regulatory Authority while rejecting the claim of the appellant for delay in completion of the project due to force majeure, and appreciating that there was delay in completion of the project, directed the appellant for refund of the amount deposited by the respondent along with interest at the rate of MCLR+1% in two installments.
12. The appellant moved an application for rectification of the order dated 09.04.2019 with a prayer to direct the complainant to take possession, as the Completion Certificate of the Project in question had been received on 07.03.2019, but the same was rejected by the Regulatory Authority vide its order dated 16.09.2019.
13. In order to examine the issues and rival submissions, we will be examining the relevant provisions of the Act of 2016; U.P. Real Estate (Regulation and Development) Rules, 2016 (the “Rules of 2016”); the U.P. Apartments Act of 2010; Uttar Pradesh Real Estate (Regulation and Development) (Agreement for Lease/Sale) Rules, 2018 (the “Rules of 2018”) as well as Clauses of Allotment Letter, Booking Request Forms, the standard Builder Buyer Agreement etc. at relevant places.
14. The Real Estate (Regulation & Development) Act, 2016 has been enacted to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the Adjudicating Officer and for matters connected therewith or incidental thereto. The Real Estate (Regulation & Development) Act, 2016 delineates functions and duties of promoter in Chapter 3, and rights and duties of allottees in Chapter 4. The Real Estate Regulatory Authority has been assigned functions and have been given powers as detailed out in Chapter 5.
15. A perusal of the statement of objects and reasons of the Act of 2016 makes it clear that the Real Estate Sector had been largely unregulated and the Consumer Protection Act, 1986 was not adequate to address all the concerns of the buyers in the Real Estate Sector, and therefore the present Act of 2016 has been promulgated with a view to protect the interests of the consumers in the Real Estate Sector and to ensure greater accountability towards consumers and to significantly reduce frauds and delays, and also to curb the current high transaction costs.
16. The Act spells out the obligations of the Promoter of a real estate project and the consequences if the Promoter fails to fulfill those obligations. Some of those obligations are enumerated in Section 11,12,13 and 18 of the Act which are as follows:—
“11. Functions and duties of promoter.—
(1) ………………………
(2) ………………………
(3) ………………………
(4) The promoter shall—
(a) be responsible for all obligations, responsibilities and functions under the provisions of this Act or the rules and regulations made thereunder or to the allottees as per the agreement for sale, or to the association of allottees, as the case may be, till the conveyance of all the apartments, plots or buildings, as the case may be, to the allottees, or the common areas to the association of allottees or the competent authority, as the case may be : Provided that the responsibility of the promoter, with respect to the structural defect or any other defect for such period as is referred to in sub-section (3) of section 14, shall continue even after the conveyance deed of all the apartments, plots or buildings, as the case may be, to the allottees are executed.
(b) be responsible to obtain the completion certificate or the occupancy certificate, or both, as applicable, from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be;
(c) be responsible to obtain the lease certificate, where the real estate project is developed on a leasehold land, specifying the period of lease, and certifying that all dues and charges in regard to the leasehold land has been paid, and to make the lease certificate available to the association of allottees;
(d) be responsible for providing and maintaining the essential services, on reasonable charges, till the taking over of the maintenance of the project by the association of the allottees;
(e) enable the formation of an association or society or cooperative society, as the case may be, of the allottees, or a federation of the same, under the laws applicable:
Provided that in the absence of local laws, the association of allottees, by whatever name called, shall be formed within a period of three months of the majority of allottees having booked their plot or apartment or building, as the case may be, in the project;
(f) execute a registered conveyance deed of the apartment, plot or building, as the case may be, in favour of the allottee along with the undivided proportionate title in the common areas to the association of allottees or competent authority, as the case may be, as provided under section 17 of this Act;
(g) pay all outgoings until he transfers the physical possession of the real estate project to the allottee or the associations of allottees, as the case may be, which he has collected from the allottees, for the payment of outgoings (including land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities payable to competent authorities, banks and financial institutions, which are related to the project):
Provided that where any promoter fails to pay all or any of the outgoings collected by him from the allottees or any liability, mortgage loan and interest thereon before transferring the real estate project to such allottees, or the association of the allottees, as the case may be, the promoter shall continue to be liable, even after the transfer of the property, to pay such outgoings and penal charges, if any, to the authority or person to whom they are payable and be liable for the cost of any legal proceedings which may be taken therefor by such authority or person;
(h) after he executes an agreement for sale for any apartment, plot or building, as the case may be, not mortgage or create a charge on such apartment, plot or building, as the case may be, and if any such mortgage or charge is made or created then notwithstanding anything contained in any other law for the time being in force, it shall not affect the right and interest of the allottee who has taken or agreed to take such apartment, plot or building, as the case may be;
(5) …………………..
(6) …………………..
12. Obligations of promoter regarding veracity of the advertisement or prospectus.— Where any person makes an advance or a deposit on the basis of the information contained in the notice advertisement or prospectus, or on the basis of any model apartment, plot or building, as the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under this Act:
Provided that if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, or the model apartment, plot or building, as the case may be, intends to withdraw from the proposed project, he shall be returned his entire investment along with interest at such rate as may be prescribed and the compensation in the manner provided under this Act.
13. No deposit or advance to be taken by promoter without first entering into agreement for sale. –
(1) A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.
(2) The agreement for sale referred to in sub-section (1) shall be in such form as may be prescribed and shall specify the particulars of development of the project including the construction of building and apartments, along with specifications and internal development works and external development works, the dates and the manner by which payments towards the cost of the apartment, plot or building, as the case may be, are to be made by the allottees and the date on which the possession of the apartment, plot or building is to be handed over, the rates of interest payable by the promoter to the allottee and the allottee to the promoter in case of default, and such other particulars, as may be prescribed.
17. A plain reading of Section 11 and 12 of the Act reveals that a promoter has an obligation and responsibility towards the allottees in terms of the Agreement for Sale. The promoter is also responsible for obtaining the C.C. and/or O.C. from the Competent Authority, as well as for execution of the registered conveyance deed in favour of the allottees. Further, in case a person is aggrieved on account of misinformation or false information, he/she has a right to withdraw from the project, and the promoter is liable to return his entire investment alongwith interest and/or compensation. Section 13 imposes responsibilities on the promoter for not accepting a sum of more than 10 percent of the cost of the apartment without first entering into and registering an agreement for sale, which should indicate the payment schedule for the allottees as well as the date on which possession of the apartment is to be handed over to the allottees.
18. Section 18 deals with the issue of return of amount and compensation, the relevant portion of Section 18(1) is extracted as follows:—
“Section 18-Return of amount and compensation-(1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,-
(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or
(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason,
he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act:
Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be presceibed.”
19. Section 18(1) of the Act provides that if an allottee wishes to withdraw from the project on the ground that the promoter has failed to complete or is unable to give possession of the property in accordance with the agreement for sale within the date specified therein, or due to discontinuance of the promoter’s business on account of suspension or revocation of its registration or for any other reason, then the promoter shall return the amount received from the allottee in respect of that property with interest and compensation, on the allottee’s demand. Further, if an allottee does not wish to withdraw from the project, he shall be paid by the promoter interest for every month of delay till the handing over of the possession, at such rate as may be prescribed.
20. As per the provisions of Section 18 of the Act, the option of either withdrawing from the project or staying in the project remains with only the allottee. The intent of the legislature is quite clear that the right of exercising the option of either staying in the project or for withdrawing from it is unqualified and if the option is availed by the allottee to withdraw from the project, the money deposited by the allottee has to be refunded by the promoter alongwith interest at such rate as may be prescribed.
21. Section 19 deals with the Rights and Duties of allottees. Sub-section (4) is relevant for the present case and the same is reproduced hereinbelow:—
“19. Rights and duties of allottees.—
(1) ………………………..
(2) …………………………
(3) ………………………..
(4) The allottee shall be entitled to claim the refund of amount paid along with interest at such rate, as may be prescribed and compensation in the manner as provided under this Act, from the promoter, if the promoter fails to comply or is unable to give possession of the apartment, plot or building, as the case may be, in accordance with the terms of agreement for sale or due to discontinuance of his business as a developer on account of suspension or revocation of his registration under the provisions of this Act or the rules or regulations made thereunder.”
22. From the conjoint reading of these provisions, it is evident that if the Promoter/developer fails to fulfill his obligations to hand over the possession as per terms of the agreement, the allottee is entitled to claim refund, alongwith interest and compensation.
23. In the instant case, though there is no signed document in the nature and style of Builder Buyer Agreement between the parties, the appellant (promoter) has submitted copies of the registered conveyance deeds-dated 04.10.2019 executed between the appellant and some other allottee/buyer, for Flat No. C-103, on first floor, 2 BHK + 2T + Study in favour of Ms. Sarita Gupta; and another registered conveyance deed dated 30.10.2019 for Flat No. L2-1606, on 16th floor, 1 BHK + 1T in favour of Siddharth Gariyali and Promila Gariyali-both for the Project Cloud 9, Vaishali. On perusal of the terms and conditions of the Builder/Buyer Allotment Agreement executed with these other allottees, it is noted that there are clauses for interest to be levied for delay in making payments as well as for construction of the said building/said flat/said complex and for possession. For better understanding, the same are reproduced as follows:—
“Builder/Buyer Allotment Agreement (Cloud 9 Towers Vaishali of M/s Aadi Best Consortium Pvt. Ltd.)
RECITALS
A. WHEREAS the company has been allotted a Residential-Cum-Commercial plot in Sector 1, Vaishali, Ghaziabad, Uttar Pradesh, admeasuring 25,000 Sq. Mts. (in short, “said Plot”) by Ghaziabad Development Authority, a body created under the provisions of the U.P. Urban Planning and Development Act, 1973 (hereinafter referred to as “GDA”) being the successful bidder under bidding/tender process vide allotment letter bearing No. 43/Com.Anu./11 dated 14.11.2011
B. AND WHEREAS subsequently at the time of site plan for the said Plot, the actual area of the ‘said Plot’ was revised to 24462 Sq. Mts. And it was renumbered as Plot No. R.C. ½, Sector 1, Vaishali, Ghaziabad, Uttar Pradesh and is bounded as under:
North : Group housing plot GH 1/1
South : G.D.A. Land & 12 mt. wide road
East : 24 mt. wide road
West : P.A.C. Land
C. AND WHEREAS the Company has made payment of the relevant premium amount, lease rent and freehold charges to the GDA as per the revised area and in terms of the allotment letter and payment schedule.
D. AND WHEREAS in pursuance thereof, the GDA and the Company entered into and executed an agreement to sell dated 22.12.2011 (hereinafter “Agreement to Sell”) for sale of the said Plot by the GDA to the Company on the terms and conditions mentioned therein. The said Agreement to Sell is duly registered with the office of Sub-Registrar, Ghaziabad as document bearing registration No. 31938, in Book No. 1, Volume No. 19419 on pages 235 to 260 on 23.12.2011. As per the terms of the allotment, the permitted user of the said Plot is 65% residential and 35% commercial as per permissible FAR.
E. AND WHEREAS in the aforesaid manner, the Company has acquired right, title and interest in the said Plot, viz., plot of land bearing No. R.C. 1/2, admeasuring approximately 24,462 Sq. Mts. situated as Sector 1, Vaishali, Ghaziabad, Uttar Pradesh.
F. AND WHEREAS the Company had got the layout and building plans sanctioned from the GDA for developing a Residential-Cum-Commercial complex on the said Plot.
G. AND WHEREAS in pursuance thereof, the Company is engaged in the development of a Residential-Cum-Commercial complex on the said Plot, to be known as “CLOUD 9 VAISHALI (hereinafter referred to as the “Project”)” comprising of various residential and commercial components as under:
HABITAT 9 – Residential flats of 1BHK, 2BHK, 2BHK + Study and 3 BHK
ICONIC 9 – Residential flats of 4BHK + servant quarters STUDIO 9 – Service Apartments
TRADE 9 – Shops/commercial units
ORBIT 9 – Offices/Business suites
CLUB 9 – Club with various recreational and other facilities i.e., indoor/outdoor sports
24. It is evident from the above, that the appellant had bid for a plot of land of the Ghaziabad Development Authority (GDA), and on being successful bidder an allotment letter for the plot was issued in the appellant’s favour by the GDA on 14.11.2011. The said plot was bounded by a GDA land in the South and PAC land in the West. An agreement to sell was executed between the GDA and the appellant for the said plot on 22.12.2011 and the same was registered in the office of Sub-Registrar, Ghaziabad on 23.12.2011.
Clause of Possession
9. (i) Construction of the said Building/said Flat/said Complex
The Allottee has seen, selected and accepted the Schedules of Payment, tentative layout plan, tentative typical Flat plan which are subject to change at the sole option and discretion of the Company and the Allottee has accepted and consented to this condition. The construction of the Project shall commence within three months from the date of signing of this Agreement. Upon receipt of sanction of building plans/revised building plans and approvals of all concerned authorities including the Fire Service Deptt., Civil Aviation Deptt. Pollution Control Deptt. etc., as may be required for commencing and carrying on construction, subject to force majeure conditions, including but not limited to restraints or restrictions from any courts/authorities, non-availability of building materials, disputes with contractors/work force etc. and/or any other circumstances beyond the control of the Company and subject to timely payments by the Allottee, the construction shall be completed within a period of Forty Two (42) months from the date of commencement of construction. No claim by way of damages/compensation shall lie against the Company in case of delay in handing over possession of the said Flat on account of the said reasons. It is, however, understood that various buildings comprised in the Complex shall be ready and complete in phases and after the completion of each building/tower, flats shall be handed over to the respective allottees of that building/tower. If the construction of the particular Tower in which the said Flat is located could not be completed within Forty Two (42) months of the date of execution of this Agreement/start of construction thereon, the Allottee acknowledges that the Company shall be entitled to a grace period of Six (6) months to complete the construction. In the event the construction is not completed within the abovementioned stipulated/extended period, the Company shall be liable to pay a sum of Rs. 10/- (Rupees Ten Only) per sq. ft. of super area of the said Flat per month as penalty to the Allottee.
It is evident from Clause 9(i) that the construction was to start within 3 months of signing of the Agreement (the “BBA”) and was to be completed within 42 months with a grace period of 6 months subject to force majeure conditions specified therein.
10. POSSESSION
10.1 Schedule for Possession of the said Flat
The Company upon completion of construction and receipt of occupancy/completion certificate in respect of the said Building in which the said Flat is comprised, shall offer possession of the said Flat to the Allottee provided all dues and demands, payable up to the date of such possession required to be paid under this Agreement by the Allottee have been paid to the Company along with interest for delays and taxes, if any, and execution of the maintenance agreement by the Allottee as per the format annexed herewith as Annexure-III.
PLANWISE PAYMENT DETAIL
• Plan A : Down Payment Plan
| S. No. | Event when payment become due | |
| 1. | At the time of Booking | 20% of the Total Cost |
| 2. | Within 45 days of booking or start of construction | 75% of the Total Cost |
| 3. | At Offer of Possession | 5% of the Total Cost |
• Plan B : Flexi Payment Plan (18th Month Payment Plan)
| S. No. | Event when payment become due | |
| 1. | At the time of Booking | 10% of the Total Cost |
| 2. | Within 30 days of booking | 20% of the Total Cost |
| 3. | Within 3 months of booking | 20%of the Total Cost |
| 4. | Within 6 months of booking | 15%of the Total Cost |
| 5. | Within 9 months of booking | 15%of the Total Cost |
| 6. | Within 12 months of booking | 15%of the Total Cost |
| 7. | At Offer of Possession | 5% of the Total Cost |
• Plan C : Construction Linked Payment Plan
| S. No. | Event when payment become due | |
| 1. | At the time of Booking | 10% of the Total Cost |
| 2. | Within 30 days of booking | 10% of the Total Cost |
| 3. | Within 90 days of booking or start of construction | 10% of the Total Cost |
| 4. | 13 equal installments of 5% each on completion of alternate slab | 65% of the Total Cost |
| 5. | At Offer of Possession | 5% of the Total Cost |
• Extra Allied Charges
| S. No. | Event when payment become due | ||
| a.) | Prime Location Charges | ||
| Floor Charges | |||
| • Ground Floor | Rs. 250/- sq. ft. | As applicable | |
| • 1st & 2nd Floor | Rs. 200/- sq. ft. | As applicable | |
| • 3rd & 4th Floor | Rs. 175/- sq. ft. | As applicable | |
| • 5th & 6th Floor | Rs. 150/- sq. ft. | As applicable | |
| • 7th & 8th Floor | Rs. 125/- sq. ft. | As applicable | |
| • 9th & 10th Floor | Rs. 100/- sq. ft. | As applicable | |
| • 11th & 12th Floor | Rs. 75/- sq. ft. | As applicable | |
| • View PLC | Rs. 50/- sq. ft. | ||
| • Corner Flats | Rs. 50/- sq. ft. | ||
| b.) | Other Charges | ||
| • External Development Charges (EDC) | Rs. 50/- sq. ft. | ||
| • External Electrification Charges (EEC) | Rs. 50/- sq. ft. | ||
| • Interest Free Sinking Fund (IFSF) | Rs. 50/- sq. ft. | ||
| • Fire Fighting Charges (FFC) | Rs. 30/- sq. ft. | ||
| • Power Back-up Installation (PBI) | Rs. 20000/- per 1 KW | ||
| • Club Membership Charges | Rs. 50000/- | ||
| c.) | Reserved Car Parking Charges | ||
| • Covered/Basement | Rs. 2.00 Lacs | ||
| • Open | Rs. 1.25 Lacs |
Note : One reserved covered car parking compulsory with 2BHK + Study & 3 BHK Flat
One reserved open car parking compulsory with 1 & 2BHK Flat”
25. Vide question No. (i) we are to examine as to whether the project in question is delayed, and if yes, then on whose account.
21.1 At the time of filing of the complaint by the respondent/complainant on 24.09.2018, it was submitted by her that the date of completion as per Builder/Buyer Allotment Agreement (the “BBA”) was 01.01.2016 and that not only the possession was not delivered in time, but also the appellant was demanding more payment from the respondent/complainant. The appellant/promoter submitted that the respondent has not signed Builder Buyer Agreement (the BBA) despite repeated requests and a letter was also sent to the respondent for the said purpose on 20.06.2016. The appellant/promoter has submitted that as per the BBA entered between the appellant and other customers, the timeline for possession was given as 48 months from the date of start of construction and since the construction was started in December 2014, the 48 months time has completed in December 2018 only. The appellant/promoter has further claimed that the project was completed well within time and it had applied for the Completion Certificate to the Ghaziabad Development Authority (GDA) on 01.08.2018, but the GDA raised certain issues relating to compounding, which were resolved by the appellant and thereafter the GDA issued a Completion Certificate on 07.03.2019.
21.2 The respondent in person denied the averments made by the appellant and submitted that despite repeated requests of the respondent, the appellant company did not sign any contract (Agreement) with her and kept on taking money on one pretext or the other and more than four years have passed since inception of the project and she has paid the full payment to the respondent.
21.3 On examination of the Builder/Buyer Allotment Agreement for Cloud 9 Tower, Vaishali Project, placed on record by the appellant/promoter for some other buyers indicates that as per Clause 9(i) the construction of the project was to commence within three months from the date of singing of the agreement and subject to force majeure conditions, it was to be completed within a period of 42 months with a grace period of six months. In Clause 10, it is stated that the company upon completion of construction and on receipt of Occupancy Certificate/Completion Certificate (OC/CC) shall offer possession of the flat to the allottees. The payment schedule indicates that under payment Plan A (Down Payment Plan) 20% of the total cost was to be given at the time of booking and 5% at the time of offer of possession. In Plan B (Flexi Payment Plan) 10% of the total cost was to be given at the time of booking and 5% at the time of offer of possession. In Plan C (Construction Linked Payment Plan) 10% of the total cost was to be given at the time of booking and 5% at the time of offer of possession.
21.4 The Recitals of the Builder/Buyer Allotment Agreement (for Cloud 9 Towers), it is evident that the appellant/promoter being the successful bidder was allotted a residential cum commercial plot by GDA vide allotment letter dated 14.11.2011 and in pursuance thereof GDA and the appellant company entered into an Agreement to Sale dated 22.12.2011 which is duly registered with the Sub-Registrar, Ghaziabad on 23.12.2011. Further, the appellant company had got the lay out and building plans signed from the GDA for developing a residential cum commercial complex on the said plot, on which Cloud 9, Vaishali Project was developed which included Tower L-2 in which the flat no. 1706 allotted to the respondent was situated.
21.5 The perusal of the Review Application filed by the appellant/promoter before the Real Estate Regulatory Authority against the order dated 09.04.2019, it reveals that the first payment of Rs. 4,24,000/= was made by the respondent on 24.02.2014 and thereafter a total amount of Rs. 29,65,900/= has been paid by the respondent by 19.07.2015 (placed at page no. 57 & 58 of the Appeal).
21.6 From the submissions made by the appellant/promoter, it is evident that the cost of flat was Rs. 31,43,032.88 p. (with tax) and respondent had deposited Rs. 29,65,900/= (with tax), which is admitted at various places in the pleadings by the appellant/promoter. However, the respondent has submitted that she had paid Rs. 35.5 lacs.
21.7 Without going into the dispute of about Rs. 5.90 lacs which is being claimed to have been paid by the respondent/complainant to the appellant/promoter in cash and for which there are only “kachchi” receipts available, it is an undisputed fact that Rs. 29,65,900/= (with tax) has been paid, out of the total cost of flat i.e. Rs. 31,43,032.88 p. (with tax) by 19.07.2015, which works out to about 94% of the cost of the flat. Therefore, it cannot be said that the respondent/complainant has defaulted in making timely payments for flat in question.
21.8 It is also noted that an amount of Rs. 4,24,000/= has been paid at the time of booking on 24.02.2014, which is about 13% of the cost of the flat, and 94% of the cost by July 2015. A letter for signing the BBA has been sent by the promoter to the allottee on 20.06.2016. In terms of the provisions of Section 13 of the Act of 2016, more than 10% of the total cost of the flat could not have been taken at the time of booking of the flat. Moreover, any amount in excess of 10% of the cost of the flat can be taken by the promoter only after execution of the Builder Buyer Agreement between the buyer and the promoter. Obviously, the action of the appellant/promoter is against the provisions of Section 13 of the Act of 2016.
21.9 As there is no BBA signed between the parties, we examine the conditions of the BBA (Builder/Buyer Allotment Agreement) signed between the appellant/promoter and other buyers of flats of the same Project which have been placed on record by the appellant/promoter itself. From the perusal of the BBA signed between the appellant/promoter and some other buyers, it comes out that had the BBA been got executed between the promoter and the respondent on 24.02.2014, then the 48 months (including 6 months of grace period) would have completed in February 2018, whereas the partial Completion Certificate has been received by the appellant/promoter on 07.03.2019.
21.10 As there is no Builder Buyer Agreement or any other written document executed between the parties on record, the allottee (respondent) cannot be bound by the conditions as mentioned in the BBA executed by some other buyers, however only inference can be drawn from the BBA of the other allottees regarding period of the completion of project and handing over of the possession to the respective allottees.
21.11 The Hon’ble Supreme Court in Fortune Infrastructure (now known as HICON Infrastructure) v. Trevor D’Lima (Civil Appeal No. 3533-3534 of 2017 decided on 12.03.2018) was pleased to observe that a person cannot be made to wait indefinitely for the possession and if there is no delivery period mentioned in the agreement, a reasonable time has to be taken into consideration, and had observed that in such a situation a period of 3 years would have been reasonable for completion of the contract. Since it is being claimed by the appellant/promoter that there is no BBA executed between the parties, drawing light from the judgment of Hon’ble Supreme Court in the case of Fortune Infrastructure v. Trevor D’Lima, we may take the expected date of possession as February 2017, i.e. within 3 years from the date of first payment i.e. taking 24.02.2014 as the date of the booking, when 13% of the cost of the flat was deposited by the allottee read with the provisions of Section 13 of the Act, 2016; and the period of 48 months (which includes 6 months of grace period) as per the provisions of the BBA of the other allottees of the same project, we take the date of possession as February 2018.
21.12 Further, in terms of Sub-Section 5 of Section 4 of the U.P. Apartments Act, 2010, “an apartment may be transferred by the promoter to any person only after obtaining the completion certificate from the presceibed sanctioning authority concerned as per building bye-lays.” Further, SubSection 6 of Section 4 of the U.P. Apartments Act, 2010 mandates that physical possession of the apartments to the allottees is to be given after obtaining the Completion Certificate.
21.13 Evidently, there is a delay in completion of the Project/Tower, in which the flat in question was allotted to the respondent and there has been no default on the part of the respondent/complainant in making regular payments, therefore we conclude that the delay is solely attributable to the appellant/promoter. Question no. (i) is answered accordingly.
26. Question no. (ii) is regarding legal validity of offering possession by the appellant/promoter without obtaining Completion Certificate/Occupancy Certificate.
22.1 In order to appreciate the issue, we examine Section 2(q) and Section 2(zf) of the Act of 2016, which define Completion Certificate & Occupancy Certificate respectively. The same are extracted as follows:—
“Section 2 : – Definitions – In this Act, unless the context otherwise requires,…………………………………………………………………………………… ………………………………………………………
“Section 2(q) “completion certificate” means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws;”
…………………………………………………………………………………… ……………………………… ……………………………..
“Section 2(zf) “occupancy certificate” means the occupancy certificate, or such other certificate by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity;”
On examination of the provisions of Section 2(q) and Section 2(zf), we find that completion certificate is basically a certificate issued by the competent authority certifying that the Real Estate Project has been developed according to the sanctioned plan, lay out plan and specifications, as approved by the competent authority under the local laws. On the other hand, the occupancy certificate is issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity.
22.2 Section 5 of the U.P. Apartments Act, 2010 prescribes for Completion Certificate, which reads as follows:—
“Section (5) of the U.P. Apartments Act, 2010:— An apartment may be transferred by the promoter to any person only after obtaining the completion certificate from the prescribed sanctioning authority concerned as per building bye-laws. The completion certificate shall be obtained by promoter from prescribed authority [within the period specified for completion of the project in the development permit or the building permit as the case may be] Provided that if the construction work is not completed within the stipulated period, with the permission of the prescribed authority;
Provided further that if the completion certificate is not issued by the prescribed sanctioning authority within three months of submission of the application by the promoter complete with all certificates and other documents required, the same shall be deemed to have been issued after the expiry of three months.
Explanation : For the purposes of this sub-section “completion” means the completion of the construction works of a building as a whole or the completion of an independent block of such building, as the case may be.”
As is evident, Section 5 of the U.P. Apartments Act, 2010 clearly lays down that an apartment may be transferred by the Promoter to any person (allottee) only after obtaining the Completion Certificate (C.C.) from the prescribed sanctioning authority concerned as per building by-laws. The C.C. is required to be obtained by the Promoter by submission of an application complete with all certificates and documents, meaning thereby that Allottee has no role to play in obtaining C.C. from the prescribed authority and the promoter is responsible to submit the necessary documents alonwith the application. A Promoter is required to first obtain C.C. from the prescribed authority, only thereafter the conveyance deed of the real estate can be executed in favour of the Allottee(s) and legal possession of the unit can be given.
22.3 The learned counsel for the appellant/promoter had submitted that the project was completed well in time and the appellant/promoter had applied for the Completion Certificate on 01.08.2018, but the GDA raised certain issues relating to compounding, which were resolved by the appellant/promoter and thereafter, the GDA issued a part completion certificate on 07.03.2019. Further submission is that, the appellant had sent an offer of possession to the respondent on 28.02.2018, with a request to takeover possession after clearing the outstanding dues, since the project was complete. It is evident from the above that the offer of possession was made by the appellant/promoter in February 2018, even before applying to the GDA for the Completion Certificate in August 2018, which was finally received in March 2019, due to certain issues of compounding raised by the GDA, which were needed to be resolved by the appellant/promoter. The act of the appellant/promoter of giving offer of possession without obtaining Completion Certificate/Occupancy Certificate is evidently against the provisions of the Act of 2016, and also in clear violation of the provisions of Section 5 of the U.P. Apartments Act, 2010. Question no. (ii) is answered accordingly against the appellant.
27. Question no. (iii) is regarding claim of appellant/promoter seeking benefit of force majeure in completing the project & giving possession of the unit in question.
23.1 Before we examine the issue in hand, we deem it appropriate to examine the definition of force majeure as defined in the explanation of Section 6 of the Act, 2016, which is reproduced as follows:—
“Section 6 : – Extension of registration
………………………………………………………………………… ……………………………………………….
Explanation.- For the purpose of this section, the expression “force majeure” shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project.”
23.2 Recently, in Civil Appeal No. 940/2017 (Vikram Chatterjee v. Union of India), the Hon’ble Supreme Court was pleased to define Force Majeure as under:—
“Force Majeure shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature”.
23.3 In exercise of the powers conferred by Real Estate (Regulation and Development) Act, 2016, the U.P. Government vide Notification No. 1673/Eight-3-18-65Vividh/16 dated 12.10.2018, notified the Rules namely “The Uttar Pradesh Real Estate (Regulation and Development) (Agreement for Lease/Sale) Rules, 2018” (the “Rules, 2018”), wherein under Rule 7.1, the procedure and conditions of possession of the apartment/plot alongwith situation, which can be called as force majeure has been defined and prescribed, whereas Rule 7.2 lays down the procedure of taking over possession. Rule 7.1 and 7.2 are extracted as follows:—
7. POSSESSION OF THE APARTMENT/PLOT
7.1 Schedule for possession of the said [Apartment/Plot] – The Promoter agrees and understands that timely delivery of possession of the [Apartment/Plot] to the Allottee and the Common Areas to the association of Allottees or the competent authority, as the case may be, is the essence of the Agreement. The Promoter assures to hand over possession of the [Apartment/Plot] along with ready and complete Common Areas with all specifications, amenities and facilities of the Project in place on ______________, unless there is delay or failure due to war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature affecting the regular development of the real estate project (“Force Majeure”). If, however, the completion of the Project is delayed due to the Force Majeure conditions then the Allottee agrees that the Promoter shall be entitled to the extension of time for delivery of possession of the [Apartment/Plot]:
Provided that such Force Majeure conditions are not of a nature which make it impossible for the contract to be implemented. The Allottee agrees and confirms that, in the event it becomes impossible for the Promoter to implement the project due to Force Majeure conditions, then this allotment shall stand terminated and the Promoter shall refund to the Allottee the entire amount received by the Promoter from the allotment within 120 days from that date. The Promoter shall intimate the Allottee about such termination at least thirty days prior to such termination. After refund of the money paid by the Allottee, the Allottee agrees that he/she shall not have any rights, claims etc. against the Promoter and that the Promoter shall be released and discharged from all its obligations and liabilities under this Agreement. In case the project is developed in phases, it will be the duty of the promoter to maintain those common areas and facilities which are not complete and handover all the common areas and facilities to the RWA once all phases are completed. The Promoter shall not charge more than the normal maintenance charges from the allottees.
7.2 Procedure for taking possession – The Promoter, upon obtaining the completion certificate/occupancy certificate (as applicable) from the competent authority shall offer in writing the possession of the [Apartment/Plot], to the Allottee in terms of this Agreement to be taken within two months from the date of issue of completion certificate/occupancy certificate (as applicable).
[Provided that, in the absence of Applicable Law the conveyance deed in favour of the Allottee shall be carried out by the Promoter within 3 months from the date of issue of completion certificate/occupancy certificate (as applicable)]. The Promoter agrees and undertakes to indemnify the Allottee in case of failure of fulfillment of any of the provisions, formalities, documentation on part of the Promoter. The Allottee, after taking possession, agrees to pay the maintenance charges as determined by the Promoter/association of Allottees, as the case may be after the issuance of the completion certificate/occupancy certificate (as applicable) for the Project. The Promoter shall hand over the completion certificate/occupancy certificate (as applicable) of the apartment/plot, as the case may be, to the Allottee at the time of conveyance of the same.
Although in the instant case there is no Agreement for sale executed between the parties, we deem it fit to extract the force majeure condition laid down in the standard Builder/Buyer Allotment Agreement prepared by the appellant/promoter and executed with some other buyers of flats of the same project, namely Cloud 9 Towers, Vaishali. The force \majeure defined in Clause 9(i), which reads as follows:—
“…….…subject to force majeure conditions, including but not limited to restraints or restrictions from any courts/authorities, nonavailability of building materials, disputes with contractors/work force etc. and/or any other circumstances beyond the control of the Company and subject to timely payments by the Allottee………….”
23.4 The force majeure has also been dealt with in question no. 1 framed by the Regulatory Authority in its order dated 09.04.2019. After having examined the issue of dispute between GDA and PAC on the allotted land of the project, the Regulatory Authority has not given any benefit of force majeure to the appellant/promoter. In the instant appeal, the appellant/promoter has submitted that on commencement of the construction, the PAC raised dispute with GDA, which took about three years to resolve. The appellant had also approached the Hon’ble Allahabad High Court by filing Writ (C) No. 44343 of 2013 titled as Aadi Best Consortium Pvt. Ltd. v. District Magistrate/Collector, Ghaziabad. It is further submitted that the Hon’ble High Court was pleased to direct the GDA and the PAC to resolve the issue vide its order dated 30.08.2013 and 03.12.2014. It is admitted by the appellant/promoter that the construction could commence only in December 2014. Even if that is taken as true, there has been delay in obtaining the Completion Certificate.
Further Clause 11 of Builder Buyer Agreement (Cloud 9 Towers Vaishali of M/s Aadi Best Consortium Pvt. Ltd.), as signed between the applicant/promoter and other allottees of the Project reads as follows:—
“Clause 11-Delay due to reasons beyond control of the Company
If, however, completion of the said Building/said Complex is delayed by reason of non-availability of steel and/or cement or other building materials or water supply or electric power or slow down, strike or due to dispute with the construction agency(ies) employed by the Company, lock-out or civil commotion, by reason of war or enemy action or terrorist action or earthquake or any act of God or if non-delivery of possession is as a result of any Act, Notice, Order, Rule or Notification of the Government and/or any other Public or Competent Authority or due to delay in sanction of building/zoning plans by any Competent Authority or for any other reasons beyond the control of the Company then the Allottee agrees that the Company shall be entitled to the extension of time for delivery of possession of the said Flat. The Company as a result of such a contingency arising reserves the right to alter or vary the terms and conditions of this Agreement or if the circumstances beyond the control of the Company, so warrant, the Company may suspend the Scheme for such period as it may consider expedient and the Allottee agrees not to claim compensation of any nature whatsoever (including the compensation stipulated in Clause 11.2 of this Agreement) during the period of suspension of the Scheme.”
It is evident that the force majeure conditions mentioned by the appellant/promoter in the standard Builder/Buyer Allotment Agreement under Clauses 9 and 11 are not in accordance with the provisions of the Act, 2016, the Rules, 2018 and Judicial pronouncements.
23.5 On examination of the definition of force majeure as provided in the Act of 2016, the Rules of 2018, as well as in various Judicial pronouncements and the material available on record including the analysis hereinabove, we are of the considered view that the delay in issuance of part C.C. was purely on account of issues pertaining to compounding as pointed out by GDA, and thus responsibility for delay in issuance of part C.C. lies purely on the Promoter and hence the claim of promoter for extension of time in completion/handing over of the possession of the unit to the allottee on account of delay in grant of part C.C. by the Competent Authority by taking shelter of force majeure is not sustainable. Moreover, time spent by the promoter in resolving issues pertaining to compounding in order to obtain part C.C. from GDA does not fall in the categories/definition of force majeure and promoter is solely responsible for delay in issuance of part Completion Certificate by GDA. Accordingly, question no. (iii) is answered against the appellant/promoter.
28. Question no. (iv) is regarding the validity of the order of the Regulatory Authority, directing the appellant/promoter to refund the money alongwith interest.
24.1 Section 18(1) of the Act of 2016 clearly lays down that if an allottee (buyer) wishes to withdraw from the project on the ground that the promoter has failed to complete or is unable to give possession of the property in accordance with the agreement for sale within the date specified therein, then the promoter shall return the amount received from the allottee in respect to that property with interest and compensation on the allottee’s demand.
24.2 The argument made by the appellant/promoter is that an order of refund of amount paid alongwith interest will violate the object and scheme of the RERA Act. It has further been claimed by the appellant/promoter that Section 34 and 32 of the Act of 2016 provide that the functions of Regulatory Authority include the development of Real Estate Sector and granting refund to a few odd home buyers will definitely affect the interests of other home buyers, who are willing to have possession of their units. The learned counsel for the appellant/promoter has relied upon the judgment of Hon’ble Supreme Court in the case of Chitra Sharma v. Union of India [Writ Petition (Civil) No. 744 of 2017 decided on 9th August, 2018], and a para thereof has been quoted as ground no. H of the appeal (placed at page no. 20 of the appeal):—
“………We cannot be unmindful to the interest of 92% of the home buyers many of whom would have obtained loans to secure home, they would have a legitimate grievance if the corpus of Rs………. is distributed to the home buyers who seek a refund”
24.3 Since the appellant/promoter has placed reliance on the judgment of Hon’ble Supreme Court in the case of Chitra Sharma v. Union of India [Writ Petition (Civil) No. 744 of 2017 decided on 9th August, 2018], therefore, we examine the said judgment of Hon’ble Supreme Court in the light of the present case. The proceedings in the Hon’ble Supreme Court were initiated under Article 32 of the Constitution of India for protecting the interest of home buyers, in the project floated by Jaypee Infratech Ltd., who had been left in lurch and faced with a situation of human distress, occasioned by the failure of the developers to meet their contractual obligations and a legal regime as it then stood under the IBC which provided no solace to home buyers. The Hon’ble Supreme Court taking into consideration the fact that an amount of Rs. 750 crores was lying in deposit before the Hon’ble Supreme Court in pursuance to the interim direction along with interest accrued and some home buyers had earnestly sought the issuance of interim direction to facilitate a pro-rata disbursement of this amount to those of the home buyers who sought a refund, declined to accede the request of home buyers for the reason that during the pendency of the Corporate Insolvency Resolution Process (CIRP), it would be a matter of law, be impermissible for the Hon’ble Supreme Court to direct a preferential payment being made to a particular class of financial creditors, whether secured or unsecured. Further, Hon’ble Supreme Court was pleased to observe that directing disbursement of the amount of Rs. 750 crores to the home buyers, who sought refund would be manifestly improper and cause injustice to the secured creditors since it would amount to a preferential disbursement to a class of creditors and once recourse to the discipline of the Insolvency and Banking Code 2016 (IBC) has been taken, it is necessary that its statutory provisions be followed to facilitate the conclusion of the resolution process. Secondly, as per figures available on the web portal opened by the amicus curiae, indicate that 8% of the home buyers have sought refund of their money while 92% would evidently prefer possession of the homes, which they have purchased. They would have a legitimate grievance if the corpus of Rs. 750 crores (together with accrued interest) is distributed to the home buyers who sought a refund. The purpose of the process envisaged by the IBC for the evaluation and approval of a resolution plan is to form a composite approach to deal with the financial situation of the corporate debtor. Allowing a refund to one class of financial creditors will not be in the overall interest of a composite plan being formulated under the provisions of the IBC. Further RBI had moved before the Court seeking permission to initiate an insolvency resolution process, etc.
In our considered view, the observations of Hon’ble Supreme Court in para-40 of judgment rendered in the case of Chitra Sharma (supra) was in a peculiar facts and circumstances of the said case and do not apply to the cases of home buyers seeking refund on account of delay in completion of the Project/giving possession of the apartment/flat to a home buyer in accordance with the terms of the agreement for sale under the scheme of the Act of 2016.
24.4 The instant issue/question is required to be examined in the light of the aforesaid legal propositions. We have examined the complaint dated 24.09.2018 filed by the respondent/complainant before the Regulatory Authority, in which the relief sought is relating to refund of Rs. 35.50 lacs plus Bank interest. The Regulatory Authority in its order dated 09.04.2019 has asked the appellant/promoter to refund the deposited amount alongwith interest at the rate of MCLR+1% in two installments to the respondent/complainant. The first installment of 50% was to be given within 45 days and the second installment of remaining 50% within one year or till the flat in question is resold, whichever is earlier. The Regulatory Authority in its order has relied upon the judgment of Hon’ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India, (2018) 1 AIR Bom R 55, decided on 06.12.2017, in which, the Hon’ble High Court has observed that under Section 18(1), if the promoter fails to complete or is unable to give possession of an apartment, he is liable to refund the amount including compensation.
24.5 The Hon’ble Supreme Court has time and again held that where the buyer has to suffer on account of delay beyond a reasonable time then he/she has to be compensated either by way of interest or penalty and in this connection Hon’ble Supreme Court in Fortune Infrastructure v. Trevor Dlima, (2018) 5 SCC 442 was pleased to observe vide para 15 as follows:—
“15. ………Moreover, a person cannot be made to wait indefinitely for the possession of the flats allotted to them and they are entitled to seek the refund of the amount paid by them, along with compensation. Although we are aware of the fact that when there was no delivery period stipulated in the agreement, a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years would have been reasonable for completion of the contract i.e., the possession was required to be given by last quarter of 2014. Further there is no dispute as to the fact that until now there is no redevelopment of the property. Hence, in view of the above discussion, which draw us to an irresistible conclusion that there is deficiency of service on the part of the appellants and accordingly the issue is answered. When once this Court comes to the conclusion that, there is deficiency of services, then the question is what compensation the respondents/complainants is entitled to?”
24.6 The Hon’ble Supreme Court in Civil Appeal No. 3182/2019 (Kolkata West International City Pvt. Ltd. v. Devashish Rudra), while examining the issue of delay in possession beyond reasonable period and refund of the amount of home buyer, has been pleased to observe as follows:—
“It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified.”
24.7 The Hon’ble Supreme Court in Civil Appeal No. 12238/2018 (Pioneer Urban Land Infrastructure Ltd. v. Govind Raghwan) has observed as follows:—
“We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant – Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent – Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent – Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent – Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent – Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent – Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest.”
24.8 The Hon’ble Supreme Court in Civil Appeal No. 3207-3208/2019 (Marvel Omega Builders Pvt. Ltd. v. Shri Hari Gokhle) has observed as follows:—
“Even assuming that the villa is now ready for occupation (as asserted by the Appellants), the delay of almost five years is a crucial factor and the bargain cannot now be imposed upon the Respondents. The Respondents were, therefore, justified in seeking refund of the amounts that they had deposited with reasonable interest on said deposited amount. The findings rendered by the Commission cannot therefore be said to be incorrect or unreasonable on any count.”
24.9 The Hon’ble Supreme Court, while dealing with the provisions of Section 18 of the Act, 2016, in the case of Imperia Structures Ltd. v. Anil Patni, Civil Appeal Nos. 3581-3590 of 2020, decided on 02.11.2020, in para 23, observed as under:—
“23. In terms of Section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the Promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to withdraw from the Project. Such right of an allottee is specifically made “without prejudice to any other remedy available to him”. The right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed. The proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the Project. In that case he is entitled to and must be paid interest for every month of delay till the handing over of the possession. It is upto the allottee to proceed either under Section 18(1) or under proviso to Section 18(1). The case of Himanshu Giri came under the latter category. The RERA Act thus definitely provides a remedy to an allottee who wishes to withdraw from the Project or claim return on his investment.”
24.10 The only issue remains to be examined is that since no Builder Buyer Agreement was signed between the parties could the Regulatory Authority have given direction for refund. This issue has already been examined by this Tribunal in Appeal No. 295/2019 (U.P. Awas Evam Vikas Parishad v. Devesh Kumar Tiwari), decided on 20.02.2020, in which, we have observed in para 53 that “the Registration Booklet, Letter of Allotment or Agreement for Sale or any written document called by whatever name is kind of an offer of sale and once it is executed or signed or issued or the first payment of booking amount is made by the buyer, it becomes a contract”. It is further our considered view that since the respondent is an “allottee”, therefore in terms of Section 19(4) of the Act, the respondent is entitled to claim the refund of amount paid alongwith interest at such rate, as may be prescribed and compensation from the promoter as the appellant/promoter has been unable to give timely possession of the apartment in question, irrespective of the fact, whether a Builder Buyer Agreement was executed or not. At no stage has the appellant/promoter claimed that the respondent has not been an “allottee” or that the respondent had not paid almost about 94% of the cost of the flat in question by July 2015; whereas the part completion certificate of the building was received only on 07.03.2019 as per the submissions of the appellant/promoter itself. One point of dispute yet to be examined is about non-payment of Rs. 177132.87p. demanded for electricity connection, one time lease rent, building issuance and maintenance charges, etc. at the time of offer of possession made in February 2018.
24.11 It is also noted that the appellant/promoter has admitted that the respondent had by July 2015 deposited Rs. 29,65,900/- (with tax) against the cost of the flat, which was Rs. 31,43032.88 p. (with tax). It is therefore concluded that there had not been any default on the part of the respondent (allottee) in making the payments starting with about 13% in April 2014 and upto about 94% of the cost of the flat by July 2015. The non payment of Rs. 1,77,132.87p. pertains to the payments required to be made on offer of legal possession. The respondent has rightly refused to pay this amount since in February 2018, not only the flat in question was not ready, but the appellant/promoter had not even applied for completion certificate for the Tower in which the said flat was situated. It was almost 4½ years after the first payment the complainant decided to make a formal complaint before the Regulatory Authority in September 2018. The complainant/allottee has legal right to seek refund alongwith interest and compensation as she wants to withdraw from the project due to delay in completion of the project. We do not find any infirmity or illegality in the order dated 09.04.2019 of the Regulatory Authority through which the appellant/promoter has been directed to refund the money alongwith interest. The direction of the Regulatory Authority is in consonance of the Scheme of the Act of 2016; Rules, 2016; Rules, 2018 and the U.P. Apartments Act, 2010 (as amended 2016). Question no. (iv) is accordingly answered against the appellant/promoter.
29. Question no. (v) is regarding the responsibility of the appellant/promoter in completing the project and handing over the unit to the allottee in the absence of Builder Buyer Agreement.
25.1 The learned counsel for the appellant/promoter argued that as there is no Builder Buyer Agreement and payment receipts have not been filed by the respondent as well as the respondent has defaulted in making the payment of the final demand of Rs. 1,77,133/= raised by the appellant/promoter on 20.02.2018 and the Regulatory Authority has not considered that in terms of Section 19 of the RERA Act, every allottee has to make necessary payments within the specified time. The appellant/promoter has tried to make out a case that it is not responsible for completing the project and handing it over to the allottee in the absence of Builder Buyer Agreement as well as due to default in making payments in time by the respondent/allottee.
25.2 We find on record a letter dated 28.02.2018 written by the promoter to the respondent (placed at page no. 40 & 41 of the appeal) in which it is stated that:—
“the project is in final finishing stage and the company is ready to give offer of possession in a phase wise manner”………… “this is in reference to Unit No. 1706, Area 600, on 17th Floor in ‘Cloud-9, (“Said Unit”) provisionally allotted to you in terms of Builder Buyer Agreement executed between you and Aadi Best Consortium Pvt. Ltd. (“the Company”) (“hereinafter referred to as Builder Buyer Agreement”). As per the clause no. 10.2 of Builder Buyer Agreement, the possession of the Said Unit will be given to you in 30 days after the completion of all the above mentioned formalities.”
In the letter dated 28.02.2018, the appellant/promoter has stated that the offer of possession is being made in accordance with the Builder Buyer Agreement (BBA) executed between the respondent and the appellant; and on the other hand the appellant/promoter in its averments has submitted that the flat cannot be handed over in the absence of BBA executed between the parties. There are contradictory submissions made by the appellant with respect to execution of BBA. As regards, delay in payment, we have already concluded that there has been no delay on the part of the respondent in making payments.
The appellant/promoter has asked the respondent/allottee in writing vide letter dated 28.02.2020 to take the possession of the flat in question as the project was ready. However, the appellant/promoter could not have asked for taking the possession without obtaining Completion Certificate/Occupancy Certificate and execution of the sale deed. The responsibility of completing the project, obtaining Completion Certificate/Occupancy Certificate, ensuring handing over of legal and habitable possession of the flat in question was exclusively that of the appellant/promoter. Further about 94% of the payment was made by the allottee way back by July 2015, and once the payment of about 94% amount, which includes the initial about 13% as booking amount, was made by the respondent and accepted by the appellant/promoter in pursuance to the application of respondent, the contract is complete between the parties and the parties are bound to perform their respective obligations, even though no formal BBA is executed between the parties.
Question no. (v) is accordingly answered against the appellant/promoter.
30. Question no. (vi) & (vii) are regarding correctness of the order of Regulatory Authority for refund of money after receipt of the Completion Certificate by the appellant/promoter and applicability of the provisions of the Act, 2016 in the absence of a builder buyer agreement.
26.1 A perusal of the original complaint made by the respondent before the Regulatory Authority on 24.09.2018 (placed at page no. A-5/9 and A-5/10 of the appeal) reveals that the respondent had sought relief for refund of Rs. 35.50 lacs plus bank interest. The Regulatory Authority in its order dated 09.04.2019 in complaint case no. 9201819756 had relied upon the judgment of Hon’ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India (2018) and observed that under the provisions of the Act, the promoter is liable to pay interest on the principal amount, as the promoter has used the money deposited by the allottee in terms of Section 18(1) of the Act. Further the Regulatory Authority has quoted Clause 9 (ii) of the U.P. Real Estate (Regulation and Development) (Agreement for Lease/Sale) Rules, 2018, and has observed that interest at the rate of MCLR+1% to be paid to the allottee appears to be justified.
26.2 The appellant/promoter in its submissions has stressed upon the point that respondent has not made any payment to the appellant after 19.07.2015, and as such respondent has become a defaulter. Further, it is alleged by the appellant/promoter that the appellant gave offer of possession in the month of February 2018, yet the respondent filed complaints with the Regulatory Authority, the GDA and also lodged FIR against the promoter in the police station. The appellant/promoter has also submitted that in accordance with Section 18 of the Act, a developer is liable to refund the amount to the allottee, if he fails to complete or is unable to give possession on the date specified in the agreement. Therefore, in the absence of agreement for sale, Section 18 of the Act has no role to play.
26.3 It is an admitted fact that the appellant had given offer of possession in February 2018, before applying to the GDA for the Completion Certificate on 01.08.2018, but the GDA raised certain issues of compounding, which were resolved by the appellant and thereafter the GDA issued a part completion certificate on 07.03.2019. It is also a fact that the Builder Buyer Agreement has not been signed between the appellant/promoter and the respondent/complainant, though the appellant has placed before the Tribunal a letter dated 20.06.2016, wherein the appellant/promoter had requested the respondent to sign the Builder Buyer Agreement. It is also an admitted fact that the appellant/promoter had received almost 94% of the total cost of the flat in question from the respondent by July 2015. On examination of the entire record and issues, we are of considered view that the project was not progressing as per schedule and there were delays primarily on account of the promoter/builder, therefore, the respondent was well within its rights to withhold the balance 6% of the payment till the legal offer of possession was made after obtaining CC/OC. There is no force in the argument of the appellant/promoter that the respondent has become a defaulter, as no payment was made by her after 19.07.2015. In our opinion, the payment of balance amount of about 6% of the cost of the flat should have been demanded at the time of execution of conveyance deed after obtaining OC/CC.
26.4 The appellant claimed that once the offer of possession was made in the month of February 2018, the respondent filed complaints with the Regulatory Authority, the GDA and lodged an FIR in the police station. These arguments do not have much force and do not affect the present proceedings in any manner, since an aggrieved person can file a complaint before the Regulatory Authority in terms of the provisions of Section 31 of the Act, which is extracted below for the sake of convenience.
“Section 31-Filing of complaints with the Authority or the adjudication officer.-
(1) Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter allottee or real estate agent, as the case may be.
Explanation
(1) For the purpose of this sub-section “person” shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.
(2) The form, manner and fees for filing complaint under sub-section (1) shall be such as may be specified by regulations.”
26.5 The allottee/complainant being aggrieved on account of delay in handing over of the possession was well within her right to approach the GDA and the Regulatory Authority. As regards the FIR lodged with the police station, there is nothing on record to show that it was done with a malafide intention on the part of the respondent, however, if applicant is aggrieved by the same, it is always open for him to challenge it before the appropriate forum.
26.6 The perusal of order dated 09.04.2019 of the Regulatory Authority, does not reveal anything about the dispute regarding non signing of the Builder Buyer Agreement between the parties. The main stand taken by the appellant/promoter before the Regulatory Authority is that the project got delayed on account of the dispute over the land of the project between PAC and GDA and therefore, benefit of force majeure should be given for the delay in completion of the project. The issue of force majeure has already been deliberated upon by us in the earlier part.
26.7 From the above, it is evident that the ground taken by the appellant/promoter that it is not liable to refund the money as there has been no Builder Buyer Agreement between the parties appears to be an afterthought and cannot be accepted as a valid reason for denying refund of the money deposited by the respondent/complainant. It is quite clear from Section 18(1) of the Act that the allottee has a right to ask for the refund of his/her money alongwith interest and compensation in case the promoter fails to deliver the unit in question by the date agreed to between the parties.
26.8 There is no doubt from the aforesaid analysis that the flat in question should have been handed over to the allottee by February 2018, taking 48 months (including 6 months of grace period) period of completion of the project and handing over of the possession mentioned in the BBA of the other allottees of the same project, brought on record by the appellant itself, from February 2014 when first payment was made by the allottee and accepted by the promoter. Further by the time allottee/respondent filed a complaint before the Regulatory Authority in September 2018, the project was badly delayed as partial C.C. was issued to the promoter only on 07.03.2019. The appellant/promoter’s argument that refund cannot be ordered by the Regulatory Authority since there is no BBA executed between the parties is not sustainable in the eyes of law.
26.9 Further, seeking refund of the total amount alongwith interest and compensation in case of delay in project on the part of promoter, is the sole discretion, and unqualified right of the allottee, if he/she wishes to withdraw from the project. The fact that part C.C. was obtained on 07.03.2019, i.e. before passing of the impugned order dated 09.04.2019, is of no consequence as the promoter’s project was undoubtedly delayed, and the allottee had already exercised its option of withdrawing from the project seeking refund of its money alongwith interest.
26.10 We can safely conclude that the Regulatory Authority has rightly ordered for refund of money to the respondent/complainant under the Scheme of Act, 2016 & Rules, 2018, since legal and habitable possession of the flat in question was not offered by the appellant/promoter after obtaining CC/OC of the project from the competent authority within a period of 48 months (including 6 months of grace period) as specified in the BBA of the other allottees of the same project (in the absence of BBA between appellant & respondent). The order of the Regulatory Authority is fully in consonance with the objects and scheme of the Act of 2016, the Rules, 2018 read with the provisions of the U.P. Apartments Act, 2010. Question no. (vi) & (vii) are answered accordingly.
31. At this stage, it is important to observe that the statement of objects and reasons of the Act of 2016 makes it clear that the Real Estate Sector had been largely unregulated and the Consumer Protection Act, 1986 was not adequate to address all the concerns of the buyers in the Real Estate Sector, and therefore the present Act of 2016 has been promulgated with a view to protect the interests of the consumers in the Real Estate Sector and to ensure greater accountability towards consumers and to significantly reduce frauds and delays, and also to curb the current high transaction costs.
32. It is admitted by the appellant (promoter) that the respondent had deposited a sum of Rs. 29,65,900/= (including service tax) with the appellant by July 2015. The only point of dispute between the parties is about Rs. 5,90,000/= allegedly paid in cash by the respondent to the appellant Company against which temporary (kachchi) receipts dated 28.02.2014 and 09.03.2014 had been issued to the respondent. This is a matter of fact which can always be verified by the Regulatory Authority (the executing agency) from records.
33. On the basis of the aforesaid analysis as well as on examining the submissions of learned counsel for the appellant and the respondent in person, and after examining the order of Regulatory Authority dated 09.04.2019 read with order dated 16.09.2019, we do not find any perversity, infirmity or illegality in the impugned orders and the said orders are upheld. Accordingly, the appeal is dismissed.
34. We direct the Registry to transfer the entire amount deposited by the promoter under the provisions of Section 43(5) of the Act to the concerned account of the U.P. Real Estate Regulatory Authority (UP RERA), who will dispose it off in accordance with this judgment/order. We hope and trust that UP RERA will remit the amount to the respondent/buyer after due diligence and proceed for recovery of the balance amount from the appellant/promoter, if necessary. In case the amount being transferred to UP RERA is in excess of what is due to be paid to the respondent/buyer, then the remaining balance amount will be returned to the appellant/promoter. This is being done in order to protect the interests of the real estate allottees/buyers, who have very little bargaining power as against that of the promoter, and also in accordance with the spirit of the Act of 2016.
35. No order as to costs.