The complaints under Section 12 were thus held to be required to be filed only before the Adjudicating Officer, being the authority empowered to grant compensation under the Act

 In the Matter of Sandeep Mann vs. Real Estate Regulatory Authority, Punjab and Anr. Complaint no. Appeal No. 53 of 2018 decided on 27.02.2019 before  Punjab Real Estate Appellate Tribunal

The issue that arose in the batch matter of fifteen appeals was as to the forum (as between the Real Estate Regulatory Authority constituted under Section 20, and the Adjudicating Officer appointed under Section 71) before which a person aggrieved by violations and contraventions enumerated in Section 11(5), 12, 14(3), 18(1), 18(2), 18(3), 19(4) and 19(7) of the RERA, 2016 or the agreement for sale, praying for reliefs of refund, return of investment including compensation, setting aside of order of cancellation of allotment, compensation, compensation and interest, compensation or interest and interest as a separate relief may file a complaint.The question arose on account of two circulars issued by the Authority declaring that complaints for compensation shall be filed before and adjudged by the Adjudicating Officer whereas all other complaints shall be filed before and adjudicated by the Authority. Following these circulars, one set of orders came to be passed by the Adjudicating Officer, whereby the complaints claiming relief of refund, interest and compensation came to be dismissed for lack of jurisdiction. Another set of orders were those which the Authority passed, rejecting the complaints which alleged

violations and contraventions of the Act, while granting liberty to approach the Adjudicating Officer. All these orders were subject matter of the appeal decided by the Appellate Tribunal.

The Appellate Tribunal after considering the provisions of the Act came to the conclusion that:

(i) In case of Section 11(5), no difficulty arose, in view of the fact that the said provision specifically mentioned the Authority as the forum, before which a complaint could be filed by a complainant aggrieved by cancellation of allotment by the promoter;

 

(ii) Section 12 provides for compensation on account of false advertisement, and also for refund of investment along with interest, in case of a complainant who desires to withdraw from the project on account of false advertisement. The nature of relief being different, the circulars issued by the Authority provided for adjudication of the complaint based on the same cause of action (viz., false advertisement) by two different authorities (viz., the Adjudicating Officer for compensation and the Authority for refund of investment). The Appellate Tribunal held this mechanism to be flawed, inter alia, on account of the fact that it raised the possibility of differing orders being passed by the two authorities. Further, the cause of action being the same, the fact that the complainant had a choice of relying would not change the nature of the proceedings. The basis of the proceedings was adjudication of the proof of default. The complaints under Section 12 were thus held to be required to be filed only before the Adjudicating Officer, being the authority empowered to grant compensation under the Act;

(iii) Section 14(3), like Section 11(3), was held not to pose any problem on account of the fact that the use of the words ‘shall be entitled to receive appropriate compensation in the manner as provided under this Act’ could only mean that the appropriate forum was the Adjudicating Officer, viz., the authority empowered to award compensation under the Act;

(iv) Section 18(1), the cause of action for which is the inability of the promoter to give possession due to any of the reasons specified therein, provides an option to the buyer to withdraw from the project and seek return of investment with interest including compensation in the manner prescribed in the Act, thereby meaning that the Adjudicating Officer shall have power to adjudicate the complaint. In a case covered by the proviso, however, viz., one where return of investment is not sought and the allottee is entitled to interest till possession, the appropriate forum was the Authority; (v) Sections 18(2) and (3) provide for compensation in terms of the Act for the default of the promoter for the reasons specified therein, and therefore the appropriate forum was the Adjudicating Officer, it was held by the Appellate Tribunal;

(vi) A complaint under Section 19(4), which made a reference to award of compensation, was held to be required to be placed before the Adjudicating Officer, while one under Section 19(7), which imposed a liability upon the allottee to pay interest on delayed payments to the promoter, was required to be filed before the Authority.

Based on the above findings, the appeals came to be allowed. The Appellate Tribunal did however clarify that the decision of the Tribunal was not to apply to matters which had attained finality. The pending complaints/ applications were to be transferred to the appropriate forum as per the findings set out above.

The Complete order can be accessed at https://rera.punjab.gov.in/pdf/OrdersJudgementsPbAT/20190405PbATAppealNo11to56of2018.pdf

Provisions of Section 12 are retroactive in nature,allottees are entitled to protection for breaches and failure of the developer notwithstanding that the transactions between the developer and the allottees consummated before the Act came into force

 In the Matter of Rohit Chawla and Ors. vs. Bombay Dyeing & Mfg. Co. Ltd. complaint no.AT006000000011016  decided on 31.12.2019 before Maharashtra Real Estate Appellate Tribunal

In the instant case, 

• the developer had published the project and gave assurances regarding details of the amenities and flats and basis such representations, the allottees booked flats in the project in 2012-2013. 

• The developer further represented to the allottees that it would handover the possession of the flat by 2017. However, the developer failed to handover the possession and also failed to provide amenities as were assured to the allottees. 

• Accordingly, the allottees filed a complaint before MahaRERA claiming that they had suffered a loss on account of incorrect and false statements made by the developer in relation to the project. Further, the allottees also sought refunds of the amounts paid by them along with interest thereon.

• MahaRERA held that Section 12 of the Act (which deals with obligations of the developer regarding veracity of the advertisement or prospectus) was not retrospective and was not applicable to the instant case since the allottees had booked flats in the year 2012-2013 and the Act came into force in the year 2017. 

• Further, MahaRERA had rejected the plea of the allottees to withdraw from the project since it would jeopardise the completion of the project. 

• The MahaRERA Appellate Tribunal overruled the order passed by MahaRERA and held that provisions of Section 12 (which deals with obligations of the developer regarding veracity of the advertisement or prospectus) are retroactive in nature and the allottees are entitled to protection for breaches and failure of the developer notwithstanding that the transactions between the developer and the allottees consummated before the Act came into force.

•  Further, MahaRERA Appellate Tribunal also held that the allottees are entitled to withdraw from the project and the developer was under an obligation to refund the amounts paid by the allottees along with interest thereon.

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Rajasthan RERA - Complaint under Section 12 will not be dealt by the Authority and has to be compulsorily put before the Adjudicating Officer.

 In the Matter of Amit Kumar Lamba V/s Shekhar home Developers Complaint no.RAJ-RERA-C-2018-2193  decided on 23.04.2019 before Rajasthan Real Estate Regulatory Authority

The Bench of Sh. Nihal chand Chairman and and Rakesh jain member held that

Complaint for Relief under Section 12, Section 14(3), Section 18(2) and Section 18(3) are to be filed with and disposed of by the adjudicating officer alone, in the manner prescribed in the Rule 36 of the Rules. 

Complaints for Relief under Section 14(1) , Section 14(2) , Section 19(16) to 19(11) are to be filed with and disposed of by the Authority alone, in the manner prescribed in the Rule 35 of the Rules.

As regards to complaint under Section 18(1), the Complaint is to be filed with and disposed by authority if the complaint pertains to refund, interest , penalty or of other other directions.

The Complaint under Section 18(1) is to be disposed by the Adjudicating officer if the complaint pertains to the compensation only.

The copy of Detailed order can be found at https://rera.rajasthan.gov.in/Content/pdf/2018-2193%20001-converted.pdf

If the developer is not building the project as promised in the brochure, the Authority directed the promoter to complete the project as promised in brochure and rectify the mistake and also for compensation they can approach the Adjudicating Authority

 In the Matter of Pawan Beniwal and Kavita Vs Parsvnath Developers Ltd Complaint no.Raj-RERA-C-2017-2007 decided on 20.06.2019  before Rajasthan Real Estate Regulatory Authority

• The Rajasthan Real Estate Authority presided by Shri Nihal Chand Goel and Shri Rakesh Jain held that the Allottee/complainant contended that the developer is not developing these flats as per their brochure in that they have converted the lawn of the flat into a common facility area by making five sewerage manholes in the backyard. 

• The issue has not been resolved despite complaints made to the non-complainant. Even as per para 1(a) of the Agreement, it is clear that a lawn was supposed to be part of these flats at ground floor, but no lawn has been developed. 

• The competent Authority issued the following directions:

• (i) The non-complainant shall cover the manholes and develop the back yard/ rear set back into a proper lawn; 

• (ii) The complainants shall take possession of the their respective floors; and then point out the difficulties and deficiencies in workmanship, quality or provision of services to the promoter to rectify such difficulties and deficiencies, at no cost to the complainants, Within 30 days thereof; 

• (iii) If, before or after giving possession, the non-complainant does not comply with the directions given hereinbefore, the complainants will be at liberty to approach the Adjudicating Officer for relief under section 14(3) of the Act. Besides this, the complainants will also be at liberty to approach the Adjudicating Officer for relief of compensation under section 12 and section 18(1) of the Act.

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Section 12 Refund - Developer to deal with Bank Directly in case of Refund in Subvention Scheme

 In the Matter of Mohan Vamsi Vs M/s Dewan housing Finance  ( Complaint no. CC006000000193176) the Maharashtra Real Estate Regulatory Authority has Ruled that

In Case of Refund in the Project where the Subvention Scheme is involved, the Builder has to deal directly with the bank and to return the money taken under Subvention scheme. The Complainant will have not  have any role between the builder and the bank.

 In the Earlier matter of khyati shah v/s rajsanket realty limited Complaint number CC006000000141031 Decided on 08/01/2020

The Complainant Filed the complaint seeking directions to the respondent to refund the entire amount paid by the complainant along with interest under the provision of section 18. The complainant purchased the flat in respondent’s project under the Subvention scheme whereby paying 20% of total amount 1,98,14,750/- . Agreement to sale was also registered on 06/09/2013. Out of The remaining amount 75% was to be paid by the ICICI bank immediately on registration of agreement to sale and balance 5% on the Possession of the flat. The interest on that amount in the form of PRE-EMIs was to be paid by the respondent builder.

Date of Possession was not mentioned in the agreement of sale. The respondent builder in contravention of the agreement stopped paying pre-emi to the Icici bank so icici issued several demand letters to the complainant to pay the pending amount.

The honourable tribunal observed that “the date of possession was not mentioned in the agreement for sale but the respondent no. 1 agreed to pay the monthly EMI to the respondent no. 2 till the possession is given to the complainant. since it has stopped paying EMI from march,2019 the same can be taken as the date of possession, Hence the complainant, who is an allottee is entitled to seek relief under section 18 of the RERA and the refund sought by the complainant, under section 18 is justified.”

The Honourable tribunal further added that “ The respondent number 1 ( The builder) is further directed to deal with the bank under subvention scheme for the remaining amount payable to the respondent number 2 viz. ICICI bank as the complainant is not liable to pay anything to the respondent number 2.”

The provisions of the Real Estate (Regulation and Development) Act, 2016 can be invoked without entering into an agreement between the developer and the homebuyer

 IN THE MATTER OF: M/s Casa Grande Civil Engineering Pvt. Ltd. Vs. Mr. P. Govindraj, Mrs. Deeparaj (Decided by Hon’ble Tamil Nadu Real Estate Appellate Tribunal- TNREAT)

Issues: 

 Issue 1 - Whether the provisions of the Real Estate (Regulation and Development) Act, 2016 can be invoked without entering into an agreement between the developer and the homebuyer? 

 Issue 2 -Whether the order of the Hon’ble Adjudicating Officer is an erroneous one? 

 Issue 3 -Whether the appeal deserves to be allowed or not?

Facts: 

 Promoters being the appellant preferred an appeal against the impugned order dated 31.07.2019 passed by the Hon’ble Adjudicating Officer in CCP.No. 78/2019 for settling of an issue pertaining to whether without entering into a contract the homebuyers have the locus standi to invoke the provisions of the Real Estate (Regulation and Development) Act, 2016? 

 The appellant/ promoter had advertised in newspaper sale of flats in the residential real estate project. 

 The homebuyer and the developer mutually agreed for consideration payable in respect of the same. The homebuyer was asked to pay amounts towards consideration in respect of the proposed purchase of the residential flat in the real estate project. Thereafter, an acknowledgment letter was issued by the appellant/ promoter acknowledging the receipt of payment and providing for other terms and conditions. 

 The terms and conditions of the said acknowledgment letter further provided for non-payment of goods and services tax that was subsequently asked to be paid by the homebuyer. Subsequently, the appellant/ promoter even reduced the area of residential flat proposed to be sold. Stemming from the above mentioned facts and events, the homebuyer decided not to sign any definitive agreement. 

 The homebuyer further appeared before the Hon’ble Adjudicating Officer complaining about of violation of Section 12 and 13 of Real Estate (Regulation and Development) Act, 2016. 

 The Hon’ble Adjudicating Officer ruled that the appellant/ promoter had violated the provisions of Section 12 and 13 of Real Estate (Regulation and Development) Act, 2016. Hence, in lieu of the same, an appeal was preferred by the appellant/ promoter.

Observations and Findings of the Hon’ble Tribunal: 

Findings on Issue 1- 

 The Hon’ble Tribunal observed that if the letter was only an acknowledgment of payment, why were certain terms and conditions mentioned in the same? The Hon’ble Tribunal even questioned the Appellant/ Promoter for incorporating terms and conditions before entering into any agreement. 

 The Hon’ble Tribunal further observed that the letter was relied on for repayment so the developer cannot say that it is not binding. 

 The Hon’ble Tribunal upheld the findings of the Hon’ble Adjudicating Officer that Section 12 and 13 of Real Estate (Regulation and Development) Act, 2016 were violated by the appellant/ promoter, as the project falls within the ambit of an ongoing project. 

 Thus, the Hon’ble Tribunal observed that the provisions of Real Estate (Regulation and Development) Act, 2016 can be invoked even without entering into an agreement.

Findings on Issue 2- 

 The Hon’ble Tribunal further modified the compensation to Rs.1,00,000/- awarded as opposed to 9% as awarded by the Hon’ble Adjudicating Officer. 

Findings on Issue 3- 

 As issue 1 was decided against the Appellant/ Promoter and issue 2 was modified by the Hon’ble Tribunal. 

Thus, the said appeal was allowed by the Hon’ble Tribunal, in part.