The interest provided in proviso to section 18(1) of the Act is the return for his money used by the promoter

 In the Matter of M/s Apex Buildwell Pvt. Ltd. V/s Sachin Kumar,Appeal No.240 of 2019 decided on 09.02.2021 before THE HARYANA REAL ESTATE APPELLATE TRIBUNAL it was held that

“the interest is a premium paid for the use of money. Ordinarily a person who is deprived of his money to which he is legitimately entitled as of right is entitled to interest for the period his money is used by the other person.”

it was also held that

“the interest provided in proviso to section 18(1) of the Act is an interest simplicitor which is available to an allottee who does not intent to withdraw from the project as a return for his money used by the promoter, who caused delay in the delivery of the possession. Thus, the interest for delayed possession cannot be construed to be the compensation in strict sense to fall within the purview of Sections 71 and 72 of the Act read with rule 29 of the Rules.”

Provisions of the RERA Act will prevail over the terms of the agreement for sale between Allottee and Developer.

 In the Matter of Sundeep Anand and Ors. vs. Kul Developers Private Limited and Anr. Complaint no. CC005000000022985 decided on 11.11.2019 before Maharashtra Real Estate Regulatory Authority

Laying down the controversy at rest, MahaRERA held that the provisions of the Act will prevail over the terms of the agreement for sale. 

In this case, MahaRERA was to determine whether the allottee would be entitled to get interest as provided under the Act or as per the agreement between the parties. MahaRERA observed that “The Act is a special enactment for protecting the interest of the allottees with a view to complete the project in a specific timeline. There is no phraseology such as ‘unless agreed to the contrary under Section 18’ which allows the terms of the agreement to prevail over the provisions of the Act.” MahaRERA held that interest is to be awarded at the rate as prescribed by the statute for the delayed possession.

MahaRERA - Subsequent allottees are not entitled to any interest under Section 18 of the Act.

 In the Matter of Devindersingh Harbajansingh Anand and others Versus Poona Bottling Co. Pvt. Ltd. And others Complaint no.CC005000000011586 decided on 09.01.2019 before Maharashtra Real Estate Regulatory Authority

It has been held that subsequent allottees are not entitled to any interest under Section 18 of the Act. In the instant case, the complainants purchased the flat from the original allottees and were now claiming rent from the developer for the delay in possession on the basis of the date of possession mentioned in the earlier agreement between the original allottees and the developer.

MahaRERA stated that the subsequent allottees were aware at the time of purchase of the flat that the date of possession had lapsed and hence they were not entitled to any relief.

The order can be accessed on http://www.jclex.com/reradossier/subsequent%20allottees%20not%20entitled%20to%20interest.pdf

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 tax amount is credited to the State Government in the name of the allottee the predominant role is of the allottee and for that the Promoter cannot be held responsible to refund the VAT payment.

  In the Matter of Ashutosh Suresh Bagh v/s. The Member & Adjudicating Officer & Ors. Complaint no. AT005000000000120 decided on 02.05.2018 before Maharashtra Real Estate Appellate Tribunal

The Appellate Authority Held that 

"While deciding claims between the allottees and meeting with controversies, or the difficulties faced by the Promoter, a harmonious approach is imperative to be adopted. This is moreso the cumulative effect of the Statute coupled with Sections 71(3), 72, 38, Preamble and impetus of Section 18 of

RERA Ad is to be coherently considered. Going by these provisions and reading the order under challenge, it is apparent that refund of VAT could not be from the Promoter as the tax amount is credited to the State Government at the credit ,/ in the name of the allottee. Whatever would be the refund, would be available subject to termination of existing agreement between the parties and on an application to the concerned authorities by the allottees. In both these situations, the predominant role is of the allottee and for that the Promoter cannot be held responsible to refund the VAT payment. 

Statutory payments like stamp duty, VAT, service tax are to be deducted and flat purchaser is not entitled for the same

In the Matter of Bhoomi And Arcade Associates vs Alistair Gomes, Appeal No. AT 005000010880

Mumbai Rera Authority ordered the promoter to refund the entire amount of Rs.3,40,491/- expended by the complainant with regard to the ancillary expenses borne towards registration, stamp duty, processing fees, and finance company charge.

The Mumbai RERA Tribunal overruling the order of the Authority held that in the proposition settled in the case of Ashutosh Suresh Bagh v/s. The Member & Adjudicating Officer & Ors. and conjunctive reading of clauses 6 and 10 of the Agreement entered between the parties, it is clear that statutory payments like stamp duty, VAT, service tax are to be deducted and flat purchaser is not entitled for the same.

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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2/3rd majority of allottees, keeping the larger interest of project completion and the interest of all the allottees of the said project, have accorded their consent for transfer of project under Section 15 and extension of project under Section 7(3), the complaint of minority of less than 1/3rd of the allottees for refund under Section 18 is disallowed

 In the Matter of Nitin Soni & Ors. Vs NNP Buildcon LLP Complaint no.CC005000000043692  decided on 07.08.2020 before Maharashtra Real Estate Regulatory Authority 

• The complainants purchased apartments in a project 

• The possession was to be granted by the year 2019 but it was not provided hence the complainants sought for refund along with interest and compensation. 

• The Respondent‘s project has undergone a change of promoter, in March 2019, in accordance with the provisions of Section 15, wherein the erstwhile promoter Riverview Properties Pvt Ltd, has obtained consent of two-third of the allottees in the said project and as per the said consent terms, the project has been taken over by the present promoter i.e. NNP BUILDCON LLP. 

• The delay in the project was due to change in planning authority, the new planning authority provided commencement certificate in August 2019, no progress was done from 2013 till 2019. 

• The respondent submitted that a mutually agreed proposal was shared with the allottees of the project including the complainants during discussions before the Conciliation forum. Accordingly, consent of 2/3rd allottees was received. It was also submitted that since the law provides for 2/3rd consent, providing different relief to remaining 1/3rd allottees would go against the provisions of the Act and also would set a wrong precedent for 2/3rd allottees. 

• Hence, the Complainants prayer of refund under Section 18 of the Act was disallowed by the Authority.

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That Just because home buyers continued to pay even after the promised possession date had lapsed, they had not "acquiesced" and not consented to the delay in possession

 In the Matter of Saurabh Mehrotra Vs.CCI Projects Pvt Ltd Complaint no.CC006000000078611  decided on 06.08.2020  Before Maharashtra Real Estate Regulatory Authority.

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• The Rivali Park project, rechristened as Wintergreen, has been delayed for more than three years. The developer CCI Projects Ltd had sought last mile funding for the project from the Rs 20,000 crore stress fund created by Finance Minister Nirmala Sitharaman and the  funds were sanctioned for builder CCI Projects Ltd. 

• The developer had revised the possession date to December 2019, and further extended it to June 30, 2021.

• Home buyer had filed complaints seeking relief after the project was delayed. However, The buyer made remaining payments for the flat even after the possession date in their registered agreements had lapsed.

• Advocate, appearing for the developer, contended that the developer had informed the revised possession dates to the buyers from time to time and they have made payments even after the possession dates had passed. This showed that they had "acquiesced" and had consented to the revised possession dates.

• However, rejecting the argument, The Court observed that the payments were structured as slab-wise payments, and after investing big amounts, the complainants were helpless and continued making payments in the hope of early possession."Therefore, this conduct of the complainants does not amount to acquiescence. 

• The Court Observed that “ when the statute imposes strict duty for completing the project as per timeline, and speaks about the consequences of delay, the allottees' consent for condoning the delay must be unequivocal and it must be in writing. No such document is produced before me,".

• The Plea for granting Delayed Possession charges under Section 18 was granted.

 

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.”

SPECIFIED “DATE OF POSSESSION” IS BINDING ON THE DEVELOPER AND NOT AFFECTED BY “GRACE PERIOD” CLAUSES UNDER Agreement For Sales

 In Suryakant Yashwant Jadhav & Anr. v. Bellissimo Hi-Rise Builders Pvt. Ltd. & Ors., the MahaRera Appellate Tribunal has held that 

• where the promoters had agreed to give possession with occupancy certificate on a specified date, the promoters were obligated under Section 19(10) of RERA to offer physical possession with occupancy certificate to allottees and the allottees were obligated to take such physical possession with occupancy certificate within two months of such delivery. 
• The Court said that failure to handover physical possession of the flat with occupancy certificate, would attract Section 18 of RERA With respect to the clause of “grace period” of one year (which was provided irrespective of the force majeure events or situations beyond control of the parties) contained in the Agreement for Sale (AFS), 
• The Tribunal held that Section 18 of RERA is absolute on the point of "specified date" mentioned in the agreement for giving possession and cannot be extended on the basis of such grace period. 
• The Tribunal held that upholding the ‘grace period’ clause of the AFS would be against the spirit of Section 18 of RERA and consequently against the object of safeguarding interest of customers.

The Order can be accessed at  https://maharera.mahaonline.gov.in/Upload/PDF/AT006-21407.pdf

In the Absence of Builder Buyer agreement, the Allotment letter if having all the Important details will serve as valid Contract and the complainant can ask for the refund under section 18 also.

 In the Matter of Nikhil Chopra V/s JVPD Properties Pvt. Ltd. Complaint number CC005000000001348 The Maha RERA observed That 

• “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 in their reply contended that the complainant is an investor and therefore, the Authority has no jurisdiction to entertain this complaint. 

• The respondent further contended that for the application under Section 18 of RERA, there must be agreement for sale and the complainant does not have it. 

• The Authority observed that 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. in this case the complainant has relied upon an allotment letter, admittedly issued by the respondents on 11.07.2014.

• The Authority observed that 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 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.

• The respondents shall pay the complainant Rs. 20,000/- towards the cost of the complaint.. 

• The respondents shall pay simple interest at the rate of 10.05% from the dates of receipts of the amount till they are refunded.. 

• 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.”

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