MAHAREAT: Obtaining OC/completion of construction at any time will not render the Section 18 inapplicable

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By Fiona Mehta

In light of the Hon’ble High Court’s judgement dated 15th April 2020, the promoter has filed Miscellaneous Application (M.A.) 108 of 2020 to collect the outstanding sum owed by the Appellants, plus interest. It is also requested that the aforementioned Application be considered concurrently with the appeal under review (AT006000000010885).

 

Facts of the case: Appellants (hereinafter referred to as Allottees) claim to have originally booked the flat on September/October, 2009 in the project of Respondent known as Indiabulls Greens-1, at Panvel, District Raigad. According to Allottees, promoter promised to give possession within a period of 3 years i.e. October, 2012. subsequently registered agreement for sale dated 20 August 2011 was executed by the parties as per clause 9 of which possession was agreed to be given within 60 months with grace period of 9 months and with entitlement to further reasonable extension in period of possession subject to mitigating events listed under the said clause claiming inter alia that Allottees have paid 100% amount as per demands raised by promoter and alleging further that amenities and facilities as promised in brochure/advertisements etc., as obtained from Times of India were not provided in the almost completed project in 2012,Allottees filed complaint with the Authority seeking inter alia possession of the flat and interest for delay in possession.

In the complaint hearing, the Promoter contested the grounds presented by the Allottees and sought the Authority to issue an order to give over possession by December 2018 as specified in a prior complaint in the same project. The promoter further argued that because the occupancy certificate (OC) was obtained prior to the filing of the lawsuit and possession had already been offered to Allottees in accordance with it, the provisions of section 18 for interest payment would not apply. The promoter also stated that it will not charge for services or amenities that will not be available when possession is handed over.

After examining the parties’ views, the Authority concluded in the impugned order dated 24 October 2018 that Section 18 would not apply after the project was completed or possession was delivered, and declined to award interest to Allottees for the delay in possession. As a result, the Authority recommended Allottees to take possession with instructions to the promoter not to charge for any amenities/ facilities that were not delivered at the time of possession until such time as they were. The stated order is being contested by Allottees in this appeal.

Following the foregoing order, Allottees desperately sought to make the amount asked by Promoter under protest for taking possession, as evidenced by comments made by Allottees via multiple emails. It appears that Promoter declined to accept the offer and did not hand over possession until the Hon’ble Bombay High Court ordered it to be handed over in the second appeal filed by Promoter, vide order dated 09th January 2020, subject to keeping all contentions of the parties open with regard to claims of both parties regarding outstanding amount. This application is being submitted in accordance with the above-mentioned instructions.

 

Order: The Tribunal has repeatedly concluded that getting OC/construction completion at any moment does not make Section 18 inapplicable. If an OC is obtained after the parties have agreed on a date, such an OC, as is the situation in this case, cannot negate the effect of the provisions of Section 18. As a result, if OC is not obtained and/or ownership is not transferred before the agreed-upon date, the provisions of Section 18 will be invoked, making Allottees entitled to the reliefs granted thereunder. As a result, the contested order, which is contradictory to the law, deserves to be set aside and requires intervention.

Promoter/Respondent is directed to pay Allottees interest on the total amount excluding stamp duty and registration charges, if any, within 30 days from the date of this order, w.e.f. 21st May 2017 until the date of handing over possession, at 2% above the highest SBI MCLR prevailing on the date of the impugned order.

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