Can an Allottee complain for lack of amenities if possession already taken? No!

Harish GovindramBulchandani V/s Satra Properties (India) Ltd

(CC006000000000417)

Order by Maha RERA dated 27th Oct 2017

The complainant stated that he has taken the possession of the apartment on 20th April 2017 but the apartment lacks many facilities that were to be provided as agreed in the agreement. Therefore, he prayed that Respondent may be directed to provide the said facilities to the complainant. The Respondent submitted that the complainant has, in writing, taken the possession of his apartment on 20th April 2017 without raising any issues at the time of accepting the possession. He further argued that since the complainant has taken possession of the apartment prior to the Real Estate (Regulation and Development) Act 2016, coming into effect, this matter, on issues relating to possession, does not fall in the jurisdiction of the Real Estate Regulatory Authority.

Maha RERA Order: I agree with the arguments made by the respondent. The complaint is, therefore, dismissed.

Is RERA Retrospective?

RERA

WRIT PETITION NO. 2737 OF 2017,

Bombay High Court. Judgment pronounced on

6th December 2017

 

The Writ transferred from Supreme Court to Bombay High Court has answered many important questions. The Judgment had specifically said that the provisions of Section 18 is not having penal provisions but compensatory in nature. Read the various para of the judgment.

 

Para 181. There was no accountability as to entity or persons responsible and/or liable for delivering on several projects that were advertised and in respect of which amounts had been collected from individual purchasers.

 

What was promised in advertisements/broachers, such as amenities, specifications of premises etc. was without any basis, often without plans having been sanctioned, and was far from what was finally delivered. Amounts collected from purchasers were either being diverted to other projects, or were not used towards development at all, and the developer would often be left with no funds to finish the project despite having collected funds from the purchasers. For a variety of reasons including lack of funds, projects were stalled and never completed and individual purchasers who had invested their life-savings or had borrowed money on interest, were left in the lurch on account of these stalled projects.

 

Individual purchasers were often left with no choice but to take illegal possession of premises offered to them under the guise of fit-outs etc., and without the developer having obtained an occupation/completion certificate, which in turn would be on account of a range of different acts of omission and commission such as non-adherence to the sanctioned plans, excess construction, lack of having obtained the requisite permissions etc. Agreements entered into with individual purchasers were invariably one sided, standard-format agreements prepared by the builders/developers and which were overwhelmingly in their favour with unjust clauses on delayed delivery, time for conveyance to the society, obligations to obtain occupation/completion certificate etc. Individual purchasers had no scope or power to negotiate and had to accept these one-sided agreements. 182. The real estate sector has largely been opaque, with consumers often unable to procure complete information, or enforce accountability against builders and developers in the absence of effective regulation. The biggest fallout affecting the sector has been (1) the delay in project completion; (2) diversion of funds collected from buyers, (3) one-sided contracts due to power asymmetry; (4) reneging on contractual commitments by both the developers and the buyers; and (5) constraints in financing and investment options available to the sector, thereby affecting its long-tern growth.

 

Para 253. The learned Counsel for the petitioners submitted that the first proviso to Section 3(1), Sections 18, 38, 59, 60, 61, 63 and 64 are retrospective/retroactive and are penal in nature. First proviso to Section 6, Section 7(4)(a) and Section 8 are penal in nature. They are violative of Articles 19(1)(g) and 20(1) of the Constitution of India. As against this the learned Counsel for the respondents submitted that first proviso to Section 3(1), Sections 18, 38, 59, 60, 61, 63 and 64 are prospective in nature. They submitted that first proviso to Section 3(1), first proviso to Section 6, Sections 7(4)(a) and Section 8 are not penal in nature.

 

Para 254. I have already held that Sections 3, 4, 5, 7 and 8 are required to be construed harmoniously. These provisions cannot be said to be violative of Articles 14, 19(1)(g), 20(1) and 300-A of the Constitution of India. These provisions cannot be construed as penal in nature. They impose reasonable restrictions on the promoter in larger public interest. These provisions regulate the construction activities in the planning area.

 

Para 255. Section 18 provides for refund of amount and compensation on account of – (a) failure of the promoter to complete or his inability to give possession of an apartment, plot or building either 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 revocation or suspension of the registration under the Act or for any other reason. The plain language of Section 18(1)(a) shows that if the promoter fails to complete or is unable to give possession of an apartment, plot or building in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein, he would be liable to return the amount received by him together with interest including compensation. In case the allottee does not intend to withdraw from the project, the promoter is liable to pay interest for every month’s delay till handing over of possession. The purpose of Section 18(1)(a) is to ameliorate the buyers in real estate sector and balance the rights of all the stake holders. The provisions of RERA seek to protect the allottees and simplify the remedying of wrongs committed by a promoter. The intention of RERA is to bring the complaints of allottees before one Authority and simplify the process. If the interpretation suggested by the petitioners, namely, that the provision is applicable only after coming into force RERA is accepted, this would result in allottees having to approach different fora for interest prior to RERA and subsequent to RERA. In fact Section 71 of RERA provides that the cases pending before the Consumer Court can be transferred to Authority. Reference to pending cases is obviously a reference to claims for interest and / or compensation pending when the RERA came into force.

 

Para 261. In my opinion Section 18 is compensatory in nature and not penal. The promoter is in effect constructing the apartments for the allottees. The allottees make payment from time to time. Under the provisions of RERA, 70% amount is to be deposited in a designated bank account which covers the cost of construction and the land cost and has to be utilized only for that purpose. Interest accrued thereon is credited in that account. Under the provisions of RERA, 30% amount paid by the allottees is enjoyed and used by the promoter. It is, therefore, not unreasonable to require the promoter to pay interest to the allottees whose money it is when the project is delayed beyond the contractual agreed period. Even under  Section 8 of MOFA on failure of the promoter in giving possession in accordance with the terms of the agreement for sale, he is liable to refund the amount already received by him together with simple interest @ 9% per annum from the date he received the sum till the date the amount and interest thereon is refunded. In other words, the liability under Section 18(1)

 

(a) is not created for the first time by RERA. Section 88 lays down that the provisions of RERA shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force.

Para ….. This is also pointer to indicate that the interest and compensation determined by the Adjudicating Officer under Sections 12, 14, 18 and 19 is not by way of penalty but is essentially compensatory in nature. As the penalties under Sections 59, 60, 61, 63 and 64 are on account of acts of commission or omission on the part of either promoter or the allottee as the case may be and which are prospective in nature, it cannot be said that these provisions are violative of Articles 14 and 19(1)(g) of the Constitution of India and amount to unreasonable restrictions.

 

Para 285. For the reasons already indicated, aforesaid decisions are not applicable to the facts of the present case. I have already indicated that the provisions of RERA are prospective in nature. The penalty under Sections 18, 38, 59, 60, 61, 63 and 64 is to be levied on account of contravention of provisions of RERA, prospectively and not retrospectively. These provisions, therefore, cannot be said to be violative of Articles 14, 19(1)(g), 20(1) and 300-A of the Constitution of India.

Open Car Parking spaces cannot be Sold. Allottee eligible for parking

Sanjeev Dharkar V/s M/s. Arkade Realty

(CC006000000001135)

Order dated 13th Dec 2017

 

The complainant, who is a resident in a completed building in the above registered project, has filed this complaint seeking directions of Maha RERA to the respondent to allow him to park his vehicle inside the compound wall of the building. The Complainant has further alleged that the Respondent is selling open car parking by collecting in cash without any documentation.

 

Maha RERA Order: On the facts mentioned above, we direct the Respondent to allow parking of Complainant’s vehicle in the premises, as is being done for other allottees. As per the Act, Rules and Regulations, the respondent cannot sell open parking space, which has to be handed over to the legal entity of the allottees when it is formed

Whether fully constructed building without constructing common areas and without providing agreed amenities but occupied by all flat purchasers without occupancy/completion certificate as on the date of commencement of RERA, amounts to ongoing project? Yes!

Parag Pratap Mantri V/s Green Space Developers

(CC0050m000000136)

Order dated 5th February 2018 by Maha RERA

 

The complainant alleges that though the respondents have not received completion certificate of E-wing/ building, they have not registered the same with Maha RERA and thereby they contravened Section 3 of Real Estate (Regulation and Development) Act 2015 (in short RERA). The respondents have filed their reply to contend that the complainant has been residing in his flat from the year 2013. All the amenities shall be provided before the completion/occupation certificate of H buildings is obtained.

ln this circumstance, the respondents contend that this Authority has no jurisdiction to entertain the complaint. Respondents have further contended that they have the Project of 13 buildings of which building nos. I, N & P are also duly completed and handed over to the respective tenement purchasers but their completion certificates have not been issued though they have applied for the same.Maha RERA observed “For application of this section both the clauses namely 1) ongoing /incomplete project on the date of commencement of the Act and 2) for which the completion certificate has not been issued must co-exist. There is no dispute that in E-wing, there are more than 8 apartments, common areas are yet to be constructed, agreed amenities have not been provided ar1d the completion certificate is still awaited. Therefore, I have to draw a conclusion that E-wing can be said to be an ongoing project on the date of commencement of RERA and hence, it was eligible for registration.”

Whether the provisional Letter of Allotment issued by the respondents amounts to the Agreement for Sale?- Yes!

RERA

Nikhil Chopra V/s JVPD Properties Pvt. Ltd.

(CC005000000001348)

Order Dated 5th April 2018 by Maha RERA

 

Maha RERA observed “The complainant has filed this complaint under Section 18 to claim refund of his amount from the respondents with interest. The respondents issued a letter dated 24.07.2017 expressing their inability to complete the project. The respondents have filed their reply. The relevant portion thereof demonstrates that the complainant is an investor and therefore, the Authority has no jurisdiction to entertain this complaint. It is further contended that for the application under Section 18 of RERA, there must be agreement for sale and the complainant does not have it. lt is a fundamental principle of law of contract that once a proposal is accepted; it becomes a contract provided, it is coupled with lawful consideration and lawful object and it is not specifically barred by any statute. There can be oral agreement for sale or it can be also in written form. ln this case the complainant has relied upon allotment letter, admittedly issued by the respondents on 11.07.2014.

 

It is the contention of the respondents that there is no concluded contract. Hence, it is necessary to look at the allotment letter. On its perusal it becomes clear that the complainant agreed to purchase the flats and the respondents agreed to sell them for the consideration mentioned in the letter. The respondents agreed to deliver the possession of the flats within 42 months from receipt of final commencement certificate from plinth level. All these terms and conditions have been accepted and signed by both the parties. Therefore, there remains no doubt in my mind that it is a concluded contract which has taken place on 11.07.2014.” The Authority therefore ordered “The respondents shall refund the amount mentioned in Para-l0 of this order. 2. The respondents shall pay the complainant Rs. 20,000/- towards the cost of the complaint. 3. The respondents shall pay simple interest at the rate of 10.05% from the dates of receipts of the amount till they are refunded. 4. The charge of aforesaid amount shall be on the respondents’ property under project bearing C.T.S. No. 634/5 and 64D “S” ward of village Tirandaz, Taluka Kurla, Mumbai, till the complainant’s claim is satisfied.”

 

Will Arbitration Agreement come under RERA? Co-purchaser also Allotee?

Mr. Ganesh Lonkar V/s D.S. Kulkarni Developers Ltd.

(CC005000000000317)

Order 26th December 2017

 

Whether the Arbitration Agreement will oust the jurisdiction of Maha RERA and whether the complaint filed by a co-purchaser is maintainable?, are the important legal issues involved in this complaint filed under section 18 of Real Estate(regulation and Development) Act 2016.

 

The complainant contends that he and his wife Mrs. Sharmila booked a flat no. 4-602 in DSK Mayurban, situated at Pune and the respondents promised to give its possession on or before 30th June 2017. The respondents have failed to deliver the possession of the flat on the agreed date. The complainant wants to continue in the project. According to him, as per the registered agreement for sale, the respondents are supposed to make payment of pre-EMIs of housing loan taken from Tata Capital Housing Finance Ltd. (TCHFL ) till the possession of the flat is handed over. TCHFL have issued notices to the complainant for payment of EMIs after 30th June 2017. Therefore, complainant prays that the respondents be directed to hand over the possession of their flat at the earliest and to pay EMIs from December 2016 onwards. Complaint also claims interest on the amount paid by him to the respondents.

 

The respondents have pleaded not guilty and they have filed their explanation to contend that co-purchaser Mrs. Sharmila Ganesh Loankar has not been added as a party to this complaint. The respondents have further contended that as per clause49 in the agreement for sale, this dispute is to be referred to the Arbitrator and therefore, this authority has no jurisdiction to adjudicate upon the present dispute.

 

Maha RERA observed that there is no substance in the objection on non-joinder because there is no conflict of interest between the co-purchasers. Here in this case though there is a clause to refer the dispute to the Arbitrator, neither the complainant nor respondents have submitted any application before this authority to refer their matter to the Arbitrator, hence RERA have jurisdiction to the case.

Investors are Promoters!

Mahesh Pariani V/s Monarch Solitaire LLP

(CC006000000000789)

Order 16th Oct 2017 by Maha RERA

 

The Complainant has invested some amount in the residential Project known as Monarch Solitaire’ and reserved four apartments in the said Project in 2014. The said Project is registered under Maha RERA with registration No. P51700012008. The Complainant stated that after reservation of four apartments, Respondent neither gave his invested money back with interest nor is giving the possession of the apartments earmarked for him. Therefore, he prayed that Maha RERA pass an appropriate order for recovery of the principal amount with interest.

 

Maha RERA observed “It is evident that the dispute between the complainant and the Respondent is of a civil nature between the promoter and co-promoter and does not pertain to any contravention of the ReaI Estate (Regulation and Development) Act,2016. The complaint is, therefore, dismissed.”

Promoter can ask last payment only if all amenities are complete.

Ramesh Kumar Mishra V/s Bhopal Development Corporation (M-BPL-18-0118) Order dated: 17th April 2018.

 

The Complainant had been allotted a plot in Aerocity Phase I by the Respondent on 1st May 2015. The Complainant was to pay the consideration in four installments to the Respondent according to the offer. Complainant maintained that since the roads and other facilities are not complete he refused to take the possession of the plot and not paid last installment due to the Respondent. He also maintain that after he execute the transaction, the maintenance charges will be started by the Respondent.

The Respondent accepted that the development work is not complete in the scheme.

 

MP RERA Ordered: Respondent is eligible to ask the last installment only when the development work is over in all aspect and till than no interest can be charged from the Complainant.

 

Allotee not paid the Promoter according to Agreement for Sale hence money refunded without any interest after deduction of 10% cancellation charges. Order dated: 24th April 2018.

Kailash Tilwani V/s Prabhakar Construction Company (M-MDD-18-0173)

Order dated: 24th April 2018.

Respondent claimed that the Complainant had not paid according to the terms of the Agreement for Sale. The onus is on the Allotee under Section 19 to pay according to the terms of the Agreement for Sale. The Complainant said that he had entered into registered agreement for sale with the Respondent on 5th Aug 2014 in District Raisen of MP. The Respondent said that he constructed 4 floor but the allottee has not paid according to the schedule of the Agreement for Sale hence not maintainable.

MP RERA Ordered: Since the Allottee has paid only 20% where as the construction is almost 60% over, hence Respondent is eligible to cancel the agreement and booking. Respondent can deduct 10% of cancellation charges and return the money to the Complainant without any interest.

Completed projects before RERA act cannot be registered. Order dated 6th February, 2019.

RERA

Mr. Haresh Motirale Vs J.Raheja Corp. Pvt Ltd .

Order dated : February 6,2019

 

The Complainant in the Present case is an allottee of an apartment and Respondent is Promoter of Raheja Vista, Powai. The Complainants contention was that though the Promoter is under obligation to register the Project, he has not registered the same in accordance with the provisions of RERA.

 

The Respondent submitted that he has completed the construction of the building and even received Completion Certificate on July 31, 2017; therefore, his building is not coming within the purview of the said Act, as he has received the completion certificate before the time period, allowed under the said Act to apply for on-going projects, got over. The Respondent is contending that he could not have applied for registration declaring a time period for completion of the project as per section 4 and 5, as his project was already completed. Therefore, he has argued that his Project is not liable for registration.

 

During the pleadings it was clear that since the promoter has completed the real estate project as defined under section 2(zn) by completing the development as mandated by the competent planning authority and obtained Completion Certificate, the real estate project has ceased to be a Project and has become a Developed building. Therefore, the mandatory compliance prescribed under Sec. 4 of the said Act cannot be insisted upon, particularly time limit prescribed for completion of the project, opening of  bank account, etc.

 

Tribunal Order : Registration of the project stands disposed off.

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