Hence, amount charged by builder on account of delay in payment of installments which comes of ₹2,69,675/- approximately stands quashed.

 TDI Infrastructure Ltd. vs Sukhbir Singh decided on 25.03.2021. Haryana RERA Panchkula

Authority has passed a detailed order vide which settled all issues and are reproduced here in brief and be read as part of this order also:

a. Stamp Duty / Misc. expenses: Authority asked respondent to withdraw charges of amount ₹11,800/- subject to the condition that all these expenses will be borne by the consumer himself at the time of conveyance deed is executed and registered.

b. Club Membership Charges: On raise a demand of ₹50,000/- by the builder on account of club membership charges which is presently not functional, therefore, the Authority decides that these charges shall be payable by the consumer only when the club becomes functional.

c. Increase in super area: Authority directed that the area covered by staircase as per principles laid down in earlier decisions by HRERA, cannot form part of super area and the same is liable to be deducted from the super area to calculate the actual cost. Considering the cost incurred by builder to construct the staircase, Authority would hold that the builder shall divide the actual cost of the staircase by the total number of flats in the building and then the proportionate cost so arrived shall then be charged from the consumer.

d. Goods and services Tax: The builder is charging GST @ 12% while according to consumer, it should be @ 5%. The Authority directed that, the rate of charging GST by the builder will be based on the date when the conveyance deed is executed and registered in favor of consumer.

e. Interest on account of delay in offer of possession: As per clause 28 of FBA, builder was obliged to give possession to the consumer within 30 months which period had already lapsed in July, 2016. And, since builder offered Fit-out Possession but hedoes not have the occupation certificate (OC) till date, so the offer cannot be considered valid and consumer is entitled to receive interest on account of delay in offering possession from the deemed date of July, 2016 to the date on which a valid possession will be offered to him after obtaining the occupation certificate. Such interest as per decision of Authority in case Madhu Sareen vs BPTP Limited is to be calculated as per Rule 15 of HRERA Rules,2017. 

The HRERA also ordered:

2) Since occupation certificate has not been obtained till date so the Fit-out possession which was offered on 04.04.2019 cannot be considered a legally valid offer.

3) In current situation, when builder himself has failed to deliver a valid possession till date to consumer, he cannot be allowed to charge interest on delay in payment of installments, Hence, amount charged by builder on account of delay in payment of installments which comes of ₹2,69,675/- approximately stands quashed.

In The Absence of Possession Clause in the Agreement, the Possession should be given in a reasonable time

 in the Matter of Fortune Infrastructure-v/s-Travor D’lima (2018) 5 SCC 442, the Honorable Supreme Court has ordered that when no date of possession is mentioned in the agreement the Promoter is expected to hand over the possession within reasonable time and the period of three years (3 yrs) is held to be reasonable time.

In the case, the Respondents were aggrieved that the appellants were not delivering the possession of flats and accordingly approached the NCDRC (National Consumer Dispute Redressal Commission) to hold that the appellants were guilty of deficiency in service and unfair trade practices as per the provisions of the Consumer Protection Act, 1986.

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Thereafter, the NCDRC directed the appellants to refund the amount of Rs.1,87,00,000/- and pay a sum of Rs. 3,65,46,000/- as to the complainants. Aggrieved by NCDRC’s order, the appellants approached the Supreme Court, the Appellants contended that they had transferred the project to a different company thereby they should be discharged from any liability for not handing over the disputed property to the answering respondents and also to consider the downward trends shown in the real estate market which mandates a lesser compensation, compared to the one awarded by the NCDRC.

The Court remarked that a person cannot be made to wait indefinitely for the possession of flats allotted to them and they were entitled to seek the refund of the amount paid by them, along with compensation. In such cases When no delivery period is stipulated the Court noted that a reasonable time has to be taken into consideration. In the facts and circumstances of this case, a time period of 3 years was deemed as reasonable for completion of the contract.

For the quantum of compensation on account of delay in delivery of flats, the Supreme Court made reference to the case of Ghaziabad Development Authority v. Balbir Singh , wherein the Court observed that there was no fixed formula for fixing damages. The Court stated that it is settled in law that whenever the builder has refused to perform the contract without valid justification, the buyer is entitled for compensation as she has been deprived of price escalation of the flat. Every breach of contract gives rise to an action for damages. Such amount of damages must be proved with reasonable certainty. Where a party sustains loss by reason of a breach of contract, the damages are to be granted so as to place the suffering party in the same position as if the contract had been performed. In light of the above, the damages other than consequential loss have to be measured at the time of the breach. However, the aforesaid rule is flexible and needs to be assessed in facts and circumstances of individual cases.

Reference may be drawn to the decision of Pannalal Jankidas v. Mohanlal, AIR 1951 SC 144, where the Supreme Court for the first time held that the party in breach must compensate in respect of the direct consequences flowing from the breach and not in respect of loss or damage indirectly or remotely caused. This rule is based on the broad principle that the party who has suffered the loss should be placed in the same position, as far as compensation in money can do it, as if the party in breach had performed his contract or fulfilled his duty.

Developer can not charge interest on delay in payment of installments in case of Fit out Possession

In a recent order titled Sukhbir Singh V/s Tdi Infrastructure (Complaint no. 1801 of  2019) , the Haryana Real Estate Regulatory Authority, Panchkula has held that Fit out Possession can not be considered a legally valid offer because in this case, the occupation certificate has not been obtained, in such circumstances, when the developer himself has failed to deliver a valid possession to Alllotee, it can not be allowed to charge interest on delayed payment of installments by the allocates. 

The Complete order can be accessed at this link https://haryanarera.gov.in/assistancecontrol/viewOrderPdf/NTk2MTU=