MahaRERA - To ensure that the said project is not jeopardized due to the outflow of finances it is directed that the amounts of interest shall be paid by the respondent promoter to the said complainants after obtaining the full occupancy certificate.

 MahaRERA - To ensure that the said project is not jeopardized due to the outflow of finances it is directed that the amounts of interest shall be paid by the respondent promoter to the said complainants after obtaining the full occupancy certificate.

Anil Kumar Dattani Versus Real Gem Buildtech Private Limited & Ors. Complaint No. CC006000000292852 Before the Maharashtra Real Estate Regulatory Authority Mumbai Decided on 13th May 2024)

Fact of the Case :-

• Respondent no. 1 i.e. Realgem Buildtech Private Limited  is the Promoter of the project.
• Respondent no. 2 i.e. Bhishma Realty Limited is the landowner of the project.
• Respondent no. 3 i.e Kindmaker Developers Private Limited  has been appointed as a Development Manager under the development management agreement dated 18-03-2018 and is basically an agent of the respondent no. 1 functioning for a fixed fee. the respondent no. 3 was appointed for the purposes of 
• inter alia managing, 
• monitoring, 
• supervising and 
• coordinating the construction and 
• development of the said project 
• together with the sales and marketing related activities including customer relationship management.

• The subject matter of the case is flat bearing no. 2302 on 23rd floor in the “RUSTOMJEE CROWN - PHASE I" at Prabhadevi, Mumbai.
• On 16-01-2019 The respondent issued  the allotment letter in the complainant's name. 
• On 25-01-2019 The complainant and the respondents entered into a registered agreement for sale.
• The respondent had assured to handover the possession of the said flat on 31-12-2021.
• The Flat was for a total consideration of Rs. 7,69,86,000/-
• The Complainant has already paid Rs. 7,41,83,995/- to the respondents from time to time..
• The respondent did not give the possession by the said date.
• On 27-09-2022 the complainant filed the present complaint..

Submissions by Appellant:-

• As per the RERA, the all 3 respondents are jointly and severally liable as per circular no. 12/2017 dated 04-12-2017.

Submissions by Respondent(s):

• The date of possession mentioned in the agreement for sale is 31-12-2021 and the same was subject to provisions of clause 8 of the said agreement which provides for a reasonable extension on occurrence of mitigating events.
• The Covid 19 pandemic was a force majeure event and therefore covered under clause 8 of the agreement for sale. 

Observations made by the Hon’ble Court:-

• the Respondent nos. 1 and 2 being the promoters of this project registered with the MahaRERA are liable to perform their part as stipulated in the registered agreement for sale dated 25-01-2019 signed with the complainant herein.
• With regards to respondent taking the plea on the issue of jurisdiction as per clause 16.1 of the said agreement for sale wheras the complainant has agreed for arbitration in case of any dispute arising in respect of the said agreement for sale.MahaRERA is of the view that the same is raised at a belated stage by filing its reply on record of MahaRERA,
• Further, there are no explicit provisions under RERA about the arbitration clause. Hence,the same stands rejected.
• As far as the issue raised by the complainant about GST input credit not being provided to him, the MahaRERA is of the prima facie view that the same does not fall within the purview of the MahaRERA under the provisions of the RERA. 
• However, it is for the concerned competent forum to deal with such issues. Hence, the complainant need to approach the appropriate forum for redressal of the said grievances about the GST. 
• The MahaRERA is not going to deal with the said issue for want of jurisdiction.
• the MahaRERA is of the view that the delay cited by the respondent such as delay in obtaining CFO NOC due to change in fire norms and the delay in obtaining NOC from MPCB do not fall within the force majeure factors mentioned in the draft model agreement for sale prescribed under the RERA and the relevant rules made thereunder.

Court’s Order:-

• The respondent promoter is directed to pay interest for the delayed possession to the complainants from 01-01-2023 ( as per agreements for sale i.e. 31-12-2021 + 1 year grace period due to Covid-19 Pandemic i.e. 31-12-2022) for every month till the actual date of possession of the said flat to the complainant or till the date of offer of possession with OC if any obtained by the respondent promoter. 
• to ensure that the said project is not jeopardized due to the outflow of finances it is directed that the amounts of interest shall be paid by the respondent promoter to the said complainants after obtaining the full occupancy certificate.

MAHA RERA - The delay in obtaining NOCs including Fire NOC do not fall within the force majeure factors prescribed under the RERA and the relevant rules made thereunder.

 MAHA RERA - The delay in obtaining NOCs  including Fire NOC do not fall within the force majeure factors prescribed under the RERA and the relevant rules made thereunder.

Anil Kumar Dattani Versus Real Gem Buildtech Private Limited & Ors. Complaint No. CC006000000292852 Before the Maharashtra Real Estate Regulatory Authority Mumbai Decided on 13th May 2024)

Fact of the Case :-

• Respondent no. 1 i.e. Realgem Buildtech Private Limited  is the Promoter of the project.
• Respondent no. 2 i.e. Bhishma Realty Limited is the landowner of the project.
• Respondent no. 3 i.e Kindmaker Developers Private Limited  has been appointed as a Development Manager under the development management agreement dated 18-03-2018 and is basically an agent of the respondent no. 1 functioning for a fixed fee. the respondent no. 3 was appointed for the purposes of 
• inter alia managing, 
• monitoring, 
• supervising and 
• coordinating the construction and 
• development of the said project 
• together with the sales and marketing related activities including customer relationship management.

• The subject matter of the case is flat bearing no. 2302 on 23rd floor in the “RUSTOMJEE CROWN - PHASE I" at Prabhadevi, Mumbai.
• On 16-01-2019 The respondent issued  the allotment letter in the complainant's name. 
• On 25-01-2019 The complainant and the respondents entered into a registered agreement for sale.
• The respondent had assured to handover the possession of the said flat on 31-12-2021.
• The Flat was for a total consideration of Rs. 7,69,86,000/-
• The Complainant has already paid Rs. 7,41,83,995/- to the respondents from time to time..
• The respondent did not give the possession by the said date.
• On 27-09-2022 the complainant filed the present complaint..

Submissions by Appellant:-

• As per the RERA, the all 3 respondents are jointly and severally liable as per circular no. 12/2017 dated 04-12-2017.

Submissions by Respondent(s):

• The date of possession mentioned in the agreement for sale is 31-12-2021 and the same was subject to provisions of clause 8 of the said agreement which provides for a reasonable extension on occurrence of mitigating events.
• The Covid 19 pandemic was a force majeure event and therefore covered under clause 8 of the agreement for sale. 

Observations made by the Hon’ble Court:-

• the Respondent nos. 1 and 2 being the promoters of this project registered with the MahaRERA are liable to perform their part as stipulated in the registered agreement for sale dated 25-01-2019 signed with the complainant herein.
• With regards to respondent taking the plea on the issue of jurisdiction as per clause 16.1 of the said agreement for sale wheras the complainant has agreed for arbitration in case of any dispute arising in respect of the said agreement for sale.MahaRERA is of the view that the same is raised at a belated stage by filing its reply on record of MahaRERA,
• Further, there are no explicit provisions under RERA about the arbitration clause. Hence,the same stands rejected.
• As far as the issue raised by the complainant about GST input credit not being provided to him, the MahaRERA is of the prima facie view that the same does not fall within the purview of the MahaRERA under the provisions of the RERA. 
• However, it is for the concerned competent forum to deal with such issues. Hence, the complainant need to approach the appropriate forum for redressal of the said grievances about the GST. 
• The MahaRERA is not going to deal with the said issue for want of jurisdiction.
• the MahaRERA is of the view that the delay cited by the respondent such as delay in obtaining CFO NOC due to change in fire norms and the delay in obtaining NOC from MPCB do not fall within the force majeure factors mentioned in the draft model agreement for sale prescribed under the RERA and the relevant rules made thereunder.

Court’s Order:-

• The respondent promoter is directed to pay interest for the delayed possession to the complainants from 01-01-2023 ( as per agreements for sale i.e. 31-12-2021 + 1 year grace period due to Covid-19 Pandemic i.e. 31-12-2022) for every month till the actual date of possession of the said flat to the complainant or till the date of offer of possession with OC if any obtained by the respondent promoter. 
• to ensure that the said project is not jeopardized due to the outflow of finances it is directed that the amounts of interest shall be paid by the respondent promoter to the said complainants after obtaining the full occupancy certificate.

Maha RERA - Issue of GST input credit does not fall within the purview of the provisions of the RERA. Hence, the complainant need to approach the appropriate forum for redressal of the said grievances about the GST.

Issue of  GST input credit does not fall within the purview of the  provisions of the RERA. Hence, the complainant need to approach the appropriate forum for redressal of the said grievances about the GST.  

Anil Kumar Dattani Versus Real Gem Buildtech Private Limited & Ors. Complaint No. CC006000000292852 Before the Maharashtra Real Estate Regulatory Authority Mumbai Decided on 13th May 2024)

Fact of the Case :-

• Respondent no. 1 i.e. Realgem Buildtech Private Limited  is the Promoter of the project.
• Respondent no. 2 i.e. Bhishma Realty Limited is the landowner of the project.
• Respondent no. 3 i.e Kindmaker Developers Private Limited  has been appointed as a Development Manager under the development management agreement dated 18-03-2018 and is basically an agent of the respondent no. 1 functioning for a fixed fee. the respondent no. 3 was appointed for the purposes of 
• inter alia managing, 
• monitoring, 
• supervising and 
• coordinating the construction and 
• development of the said project 
• together with the sales and marketing related activities including customer relationship management.

• The subject matter of the case is flat bearing no. 2302 on 23rd floor in the “RUSTOMJEE CROWN - PHASE I" at Prabhadevi, Mumbai.
• On 16-01-2019 The respondent issued  the allotment letter in the complainant's name. 
• On 25-01-2019 The complainant and the respondents entered into a registered agreement for sale.
• The respondent had assured to handover the possession of the said flat on 31-12-2021.
• The Flat was for a total consideration of Rs. 7,69,86,000/-
• The Complainant has already paid Rs. 7,41,83,995/- to the respondents from time to time..
• The respondent did not give the possession by the said date.
• On 27-09-2022 the complainant filed the present complaint..

Submissions by Appellant:-

• As per the RERA, the all 3 respondents are jointly and severally liable as per circular no. 12/2017 dated 04-12-2017.

Submissions by Respondent(s):

• The date of possession mentioned in the agreement for sale is 31-12-2021 and the same was subject to provisions of clause 8 of the said agreement which provides for a reasonable extension on occurrence of mitigating events.
• The Covid 19 pandemic was a force majeure event and therefore covered under clause 8 of the agreement for sale. 

Observations made by the Hon’ble Court:-

• the Respondent nos. 1 and 2 being the promoters of this project registered with the MahaRERA are liable to perform their part as stipulated in the registered agreement for sale dated 25-01-2019 signed with the complainant herein.
• With regards to respondent taking the plea on the issue of jurisdiction as per clause 16.1 of the said agreement for sale wheras the complainant has agreed for arbitration in case of any dispute arising in respect of the said agreement for sale.MahaRERA is of the view that the same is raised at a belated stage by filing its reply on record of MahaRERA,
• Further, there are no explicit provisions under RERA about the arbitration clause. Hence,the same stands rejected.
• As far as the issue raised by the complainant about GST input credit not being provided to him, the MahaRERA is of the prima facie view that the same does not fall within the purview of the MahaRERA under the provisions of the RERA. 
• However, it is for the concerned competent forum to deal with such issues. Hence, the complainant need to approach the appropriate forum for redressal of the said grievances about the GST. 
• The MahaRERA is not going to deal with the said issue for want of jurisdiction.
• the MahaRERA is of the view that the delay cited by the respondent such as delay in obtaining CFO NOC due to change in fire norms and the delay in obtaining NOC from MPCB do not fall within the force majeure factors mentioned in the draft model agreement for sale prescribed under the RERA and the relevant rules made thereunder.

Court’s Order:-

• The respondent promoter is directed to pay interest for the delayed possession to the complainants from 01-01-2023 ( as per agreements for sale i.e. 31-12-2021 + 1 year grace period due to Covid-19 Pandemic i.e. 31-12-2022) for every month till the actual date of possession of the said flat to the complainant or till the date of offer of possession with OC if any obtained by the respondent promoter. 
• to ensure that the said project is not jeopardized due to the outflow of finances it is directed that the amounts of interest shall be paid by the respondent promoter to the said complainants after obtaining the full occupancy certificate.

Maha RERA - There are no explicit provisions under RERA about the arbitration clause in agreement for Sale

There are no explicit provisions under RERA about the arbitration clause in agreement for Sale 

Anil Kumar Dattani Versus Real Gem Buildtech Private Limited & Ors. Complaint No. CC006000000292852 Before the Maharashtra Real Estate Regulatory Authority Mumbai Decided on 13th May 2024)

Fact of the Case :-

• Respondent no. 1 i.e. Realgem Buildtech Private Limited  is the Promoter of the project.
• Respondent no. 2 i.e. Bhishma Realty Limited is the landowner of the project.
• Respondent no. 3 i.e Kindmaker Developers Private Limited  has been appointed as a Development Manager under the development management agreement dated 18-03-2018 and is basically an agent of the respondent no. 1 functioning for a fixed fee. the respondent no. 3 was appointed for the purposes of 
• inter alia managing, 
• monitoring, 
• supervising and 
• coordinating the construction and 
• development of the said project 
• together with the sales and marketing related activities including customer relationship management.

• The subject matter of the case is flat bearing no. 2302 on 23rd floor in the “RUSTOMJEE CROWN - PHASE I" at Prabhadevi, Mumbai.
• On 16-01-2019 The respondent issued  the allotment letter in the complainant's name. 
• On 25-01-2019 The complainant and the respondents entered into a registered agreement for sale.
• The respondent had assured to handover the possession of the said flat on 31-12-2021.
• The Flat was for a total consideration of Rs. 7,69,86,000/-
• The Complainant has already paid Rs. 7,41,83,995/- to the respondents from time to time..
• The respondent did not give the possession by the said date.
• On 27-09-2022 the complainant filed the present complaint..

Submissions by Appellant:-

• As per the RERA, the all 3 respondents are jointly and severally liable as per circular no. 12/2017 dated 04-12-2017.

Submissions by Respondent(s):

• The date of possession mentioned in the agreement for sale is 31-12-2021 and the same was subject to provisions of clause 8 of the said agreement which provides for a reasonable extension on occurrence of mitigating events.
• The Covid 19 pandemic was a force majeure event and therefore covered under clause 8 of the agreement for sale. 

Observations made by the Hon’ble Court:-

• the Respondent nos. 1 and 2 being the promoters of this project registered with the MahaRERA are liable to perform their part as stipulated in the registered agreement for sale dated 25-01-2019 signed with the complainant herein.
• With regards to respondent taking the plea on the issue of jurisdiction as per clause 16.1 of the said agreement for sale wheras the complainant has agreed for arbitration in case of any dispute arising in respect of the said agreement for sale.MahaRERA is of the view that the same is raised at a belated stage by filing its reply on record of MahaRERA,
• Further, there are no explicit provisions under RERA about the arbitration clause. Hence,the same stands rejected.
• As far as the issue raised by the complainant about GST input credit not being provided to him, the MahaRERA is of the prima facie view that the same does not fall within the purview of the MahaRERA under the provisions of the RERA. 
• However, it is for the concerned competent forum to deal with such issues. Hence, the complainant need to approach the appropriate forum for redressal of the said grievances about the GST. 
• The MahaRERA is not going to deal with the said issue for want of jurisdiction.
• the MahaRERA is of the view that the delay cited by the respondent such as delay in obtaining CFO NOC due to change in fire norms and the delay in obtaining NOC from MPCB do not fall within the force majeure factors mentioned in the draft model agreement for sale prescribed under the RERA and the relevant rules made thereunder.

Court’s Order:-

• The respondent promoter is directed to pay interest for the delayed possession to the complainants from 01-01-2023 ( as per agreements for sale i.e. 31-12-2021 + 1 year grace period due to Covid-19 Pandemic i.e. 31-12-2022) for every month till the actual date of possession of the said flat to the complainant or till the date of offer of possession with OC if any obtained by the respondent promoter. 
• to ensure that the said project is not jeopardized due to the outflow of finances it is directed that the amounts of interest shall be paid by the respondent promoter to the said complainants after obtaining the full occupancy certificate.

Bombay High Court - Where Part Occupancy Certificate of a Project was granted under the rules of the Authority, a flat owner can not seek cancellation of it on the ground of violation , affecting the other owners , who may not be a party to the case.

before The Bombay High Court

Sanjay Phulwaria And Others

vs

Mumbai Metropolitan Region Development Authority And Others

Writ Petition Lodging No. 2639 Of 2018 With Notice Of Motion Lodging No. 542 Of 2018, Chamber Summons No. 238 Of 2018

decided on 16-10-2018

Where Part Occupancy Certificate of a Project was granted under the rules of the Authority, a flat owner can not seek cancellation of it on the ground of violation , affecting the other owners , who may not be a party to the case.

Karnataka High Court - RERA has no Authority Over Projects Granted ‘Partial’ Occupancy Certificate Prior to Enforcement of RERA

RERA has no Authority Over Projects Granted ‘Partial’ Occupancy Certificate Prior to Enforcement of RERA

Provident Housing Limited Vs Karnataka Real Estate Regulatory Authority Writ Petition No.18448 of 2021

Date of Judgement/Order : 02/01/2023

Brief Facts of the Case:

• The petitioner is engaged in the business of real estate development. 
• On receiving respondent’s request to allot an apartment in the project, the petitioner entered into an agreement for sale and Construction with Respondent on 10/09/14. 
• The proposed date of completion of project was 31/01/17. 
• On 18/11/15– A partial occupancy certificate was granted by the competent authority i.e. BDA to the petitioner. 
• On 27/04/17– Second partial occupancy certificate was issued in favour of petitioner. 
• On 14/05/17– Respondent seeks to cancel the agreement on the ground that there was information to him that the land had not been legally acquired by the petitioner for construction of the Apartment complex. 
• On 04/12/17– The contract between petitioner and respondent is concluded, petitioner refunds the amount after deducting the cancellation charges.
• In 2019– Respondent by invoking Section 31 of the RERA Act, files a complaint before RERA Authority seeking a refund of remaining amount. 
• The authority passes the impugned order, directing the petitioner to refund the said amount. 
• On receiving the authority’s order, Petitioner files a petition before Karnataka HC challenging the maintainability of the complaint filed by respondent before the authority.

Petitioner’s Contentions:

• The partial occupancy certificate was issued in favor of petitioner before the commencement of the Act.  
• Therefore, the project of petitioner had already passed the stage of ‘ongoing project’ and is a ‘completed project’. 
• Since the project was completed before the commencement of the RERA Act, the Act is not applicable to petitioner’s project and therefore any complaint filed before the authority by invoking the provisions of the Act is not maintainable.

Respondent’s Arguments:

• The project is still an ‘ongoing project’ as no ‘competition certificate’ was issued in favour of petitioner.

Issues:

• Whether the complaint filed by respondent before the Karnataka Real Estate Authority is maintainable? 
• Whether ‘on-going’ project includes the project for which completion certificate has not been issued.

Court’s Decision: 

• The court while taking into consideration the provisions of RERA Act (Section 2(q), 3, 18, 31, 43 and 84) and the rules made by Karnataka Government (Rule 3 and 4) under Section 84 of the Act, made following observations- 
• Section 3 of the Act mandates the registration for all ongoing projects at the time of commencement of the Act.  
• Section 3(2)(b) specifically excludes those projects to be registered under the act for which ‘completion certificate’ has been issued before the commencement of the Act. 
• In the present case, partial occupancy certificates have been issued, the project would be considered to be not completed at the time of commencement of this Act. 
• The explanation of ‘ongoing project’ under the Karnataka Government Rules (Rule 4) exempts the application of the Act to those projects for which partial occupancy certificate has been issued prior to coming into force of the Act. 
• Therefore as per Rule 4 of the Karnataka Government Rules, the project is not an ongoing project as the explanation in Rule exempts such an ongoing project for which partial certificate has been obtained to the extent of the portion for which the partial occupancy certificate is obtained.
• Therefore, the provisions of the RERA Act are not applicable to the project and the order issued by the Authority is without jurisdiction and thus is not maintainable. 

• Held: The order passed by Karnataka Real Estate Regulatory Authority is without jurisdiction. The project in question is a registered project in view of grant of partial occupancy certificates. In light of the same, the complaint filed before the authority by the respondent, itself is not maintainable.

Mere obtaining of occupancy certificate does not oust the jurisdiction of the RERA Authority

Occupancy Certificate - Developer has obtained the occupancy certificate and not the completion certificate before the RERA came into effect - Therefore, it cannot be held that there was no requirement for even registration of the project by the developer with the RERA authority.

Court would not consider the petitioner to be outside the purview of the jurisdiction of the respondent- authority - Mere obtaining of occupancy certificate does not oust the jurisdiction of the respondent authority.

Section 3 - Haryana Real Estate Regulation and  Development Rules, 2017, Rule 2 - Registration - Petitioner having already applied for and obtained an occupation certificate as referred to above in terms of the Haryana Building Code, 2017, prior to  01.05.2017 - Petitioner still Required to get itself registered with the Authority - 

Held that simply obtaining of an occupancy certificate or having applied for  such certificate in terms of the Haryana Building Code, 2017 - Petitioner not outside the purview of the jurisdiction of the Authority.

Experion Developers Private Limited v. State of Haryana, 2022 (2) Law Herald 1660: 2022 (4) R.C.R.(Civil) 339 : 2022 (3) PLR 290 (P&H) (DB): Law Finder Doc Id #1981966 

No Occupancy Certificate: Not The Only Criteria For Registration With RERA

 The Maharashtra Real Estate Regulatory Authority (MahaRERA) in its recent order has held that mere non-procurement of an occupancy certificate by a developer does not make the developer liable to register the real estate project1 under Section 3 of the Real Estate (Regulation and Development) Act, 2016 (Act).

This order has been passed following a complaint filed by Sulatana Dalal (Complainant) against Asia Group (Developer), before MahaRERA in relation to a project named as 'Miracle Mall' situated at Bhiwandi, Thane, Maharashtra. The Complainant's contention was that even though the building was completely occupied, the Developer had failed to obtain an occupation certificate and committed breach of law. Against this background, the Complainant sought directions from MahaRERA to register the building under the provisions of the Act. 

MahaRERA's Position On The Dispute

In the instant case, the Developer contended that all units of the concerned project were constructed after obtaining due permissions from the concerned authorities and all units in the building were sold to its customers prior to the commencement of the Act. Therefore, the concerned project was not required to be registered under the Act.

MahaRERA while adjudicating the dispute, looked at the pith and substance of the proviso to Section 3 of the Act. The proviso to Section 3 of the Act reads as follows:

"Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act."

From a bare reading of the proviso, the intention of the legislators appears to clearly include all projects whose construction is ongoing and which have not received a CC. In order to fall within the premise of the aforementioned proviso to Section 3 of the Act, a real estate project is required to satisfy both these conditions – i.e., construction is ongoing and the project has not received a CC.

In the present factual matrix, the project got completed in 2012-13 and the Developer had failed to procure a CC, thereby satisfying only one out of the two conditions for registering a project under the Act. Note that the State of Maharashtra does not have a framework for issuance of a CC by its own competent authority, so the present order uses the terms 'completion certificate' and 'occupancy certificate' interchangeably.

In the instant case, the MahaRERA held that mere non-procurement of an OC will not trigger a registration requirement under the Act and dismissed the complaint with the following observations:

There was no ongoing construction activity in the project, where the Complainant resides.

The building where the Complainant resides had been occupied prior to the commencement of the Act and hence no registration under the Act is required.

NCDRC - compensation to the complainant company cannot be at par with that to an individual.The company is not entitled to compensation for the mental agony and harassment to which an individual is entitled

 In the Matter of Springdale Core Consultants Pvt Ltd vs. Pioneer Urban Land and Infrastructure Ltd Complaint no, Consumer case no. 349/2017 decided on 14.07.2020 before National Consumer Disputes Redressal Commission.

The Complainant company booked a residential apartment for its Directors in the Builders project on 29.11.2011. An agreement for sale dated 13.03.2012 was executed between the parties. Under the agreement, the Builder had to apply for Occupancy certificate by 04.09.2015 and obtain the OC by 04.03.2016. The builder could not obtain OC within agreed time. The Complainant filed a complaint seeking possession of the flat along with the compensation for delay in construction. Alternatively, the complainant company prayed for refund of the amount paid to the Builder. During the pendency of the complaint, the Builder obtained OC and offered possession to the complainant company vide letter dated 03.04.2019. 

Issue before NCDRC: 

(i) Whether the flat booked by the Complainant company for its Directors was booked for speculative purposes? 

(ii) Whether the Complainant company is entitled to any compensation in the form of interest for delay in possession of flat?

It placed reliance on the resolution passed by its board of directors on 14.11.2011, resolving to book flat for the residence of one of the directors of the company. Accordingly, the complainant argued that the purchase of flat was not for speculative purposes. 

Builder’s contentions: 

1. Since the complainant is a private limited company resolution may have been manufactured at a later date. 2. As per the information provided by the Registrar of companies, the business activities of the complainant company were confined to Amritsar and all the Directors were residents of Amritsar. A director was also a partner of LLP engaged in the business of Real estate. 

3. The compensation for the delay in delivery of the possession where the complainant is a company should not be at par with the compensation granted to an individual. 

4. Submitting the lease deeds, the builder showed the prevailing rentals in the project. They stated that there would be no justification for compensation higher than the prevailing rentals in the project.

5. Builder also claimed for holding charges from the complainant company.

Verdict of NCDRC: 

NCDRC directed the Builder to hand over the possession of flat to the complainant company within 8 weeks from the date of order. The court also awarded compensation to the complainant company. It rejected the Builder’s contention that the flat in question was for speculative purposes. It observed that the Director became a partner in the LLP in the year 2017 and the flat in question was booked earlier in the year 2011. Secondly, she was residing at Gurgaon and was planning to shift to Gurgaon even if she was residing at Amritsar. Therefore, it is difficult to infer that the flat was booked for speculative purposes 

The Commission relied on the decision of Vishal Malik & Anr. Vs. Pioneer Urban Land Infrastructure Ltd 1 , to direct possession of flat along with the compensation. The commission agreed with the Builder that the compensation to the complainant company cannot be at par with that to an individual. 

The company is not entitled to compensation for the mental agony and harassment to which an individual is entitled. On quantum of compensation, NCDRC stated that the prevailing rents in respect of similarly situated flats of identical specifications and size cannot be made the sole basis for grant of such compensation. Else the builder would have no incentive to complete the construction within the agreed time frame. He would know that even if he diverts the funds collected from the flat buyer to another project, he would easily compensate the buyer which would not cost him more than 3-4% of the capital employed. 

NCDRC placed reliance on the decision of Capital Greens Flat Buyer Association & Ors. Vs. DLF Universal Limited & Anr 2 to observe that the builder is not entitled to holding charges. Since the builder having received the consideration has nothing to lose by holding possession of flat except to maintain the apartment.

Even if the Project is completed with occupancy Certificate and does not require Rera Registration, even then the Promoter is bound by the responsibilities assigned under the act.

In the Matter of Raghunath MS vs. Esteem Group Complaint no. CMP/180620/0000936  decided on 14.11.2019 before  Karnataka Real Estate Regulatory Authority

In this case, the project was completed and conveyed to the association of allottees prior to the commencement of the Act. The allottee had purchased the unit from an erstwhile allottee. The developer contended that since the project was completed before the commencement of the Act and the occupancy certificate was obtained, they cannot be bound by the provisions of the Act. Referring to the Preamble of the Act, Karnataka RERA held that even if the project was completed prior to the commencement of the Act, the developer is bound by the provisions of the Act. Accordingly, Karnataka RERA directed the developer to hand over all documents and execute a registered deed to include civic amenities in favour of the association of allottees.

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=