Supreme Court - Subsequent buyers are entitled to receive interest only after the date of endorsement in their favour.

 In the Matter of Haryana Urban Development Authority Vs. Diwan Singh Complaint no. Civil Appeal no. 3409 of 2003 // (2010) 14 SCC 770 decided on 23.10.2008 before Supreme Court of India

Fact of the Case.

• Plot No. 2163P in Sector 13, Bhiwani was allotted by the Appellant in the year 1990

• on the request of the original allottee, it was re-allotted to the respondent by the appellant on 21.4.1998

• In the year 1999, respondent approached the District Consumer Disputes Redressal Forum, Bhiwani, alleging that in spite of payment of the full price, the appellant had failed to deliver possession, on account of non-completion of development

• He therefore sought three reliefs. 

• First, a direction to the appellant to pay interest at 24% per annum on the amounts deposited, till the date of delivery of possession (after removing the road laid over a part of the plot). 

• Second was for a direction to the appellant not to charge any extension fee after 1994 or any interest on the extension fee. 

• Third was for payment of compensation of Rs.1,00,000/ for harassment and suffering

• The appellant resisted the claim on several grounds and also alleged that it had offered possession in 1994 and again in May 1998

• The District Forum by its order dated 10.8.1999 accepted the contention of the respondent that there was no effective offer of delivery of possession in May 1998 and awarded interest at 18% per annum on the amounts deposited, with effect from the date commencing on the expiry of two years from the date of deposit, till date of fresh offer of possession with a further direction to the appellant not to charge interest on the extension fee. The prayer for compensation for suffering/mental agony was rejected.  

• The appeal filed by the appellant was dismissed by the State Consumer Disputes Redressal Commission on 21.9.1999 by a nonspeaking order on the ground that there was no merit in the appeal.

• The appellant challenged the order of the State Commission in a Revision filed before the National Consumer Disputes Redressal Commission.

• The National Commission by a non-speaking order dated 27.8.2002 disposed of the Revision Petition in terms of its decision in HUDA v. Darsh Kumar (Revision petition No. 1197 of 1998) wherein it has upheld the award of interest even at 18% per annum.

Order of the Supreme court

• One significant aspect to be noticed is that respondent is not the allottee who was allotted the plot in 1990, but a re-allottee who was re-allotted the plot in April 1998. When he was offered possession of the plot in May 1998, he found that a part of it was used for road purposes of road. Thereafter, the appellant even offered an alternative plot. The respondent however rushed to the District Forum in 1999, hardly within a year of re-allotment.

•  A re-allottee in 1998 cannot obviously be awarded interest from 1992 on the amounts paid by the original allottee in 1990 on the ground that the original allottee was not offered delivery in 1990.

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NCDRC - Wherever the builder commits a particular date or time frame for completion of the construction and offering possession to the buyer, he must necessarily honour the commitment made by him, If the builder can indefinitely postpone and delay the construction of the flat and the flat buyer has no option but to wait till the builder decides to complete the construction and offer possession to the buyer, that would be nothing but a travesty of justice.

 In the Matter of Pradeep Narula & Anr. Vs. M/s. Granite Gate Properties Pvt. Ltd. & Anr. Complaint no. Consumer Case No. 315 OF 2014 decided on 23.08.2016 before National Consumer Disputes Redressal Commission

The NCDRC in this case Observed that 

"10.   ...........  The primary purpose of a consumer in booking a residential flat which the builder is to construct for him, is to start living in that house on or about the date committed to him by the builder for delivering possession of the flat booked by him.  If the builder does not deliver upon his contractual obligation and at the same time, is unable to show that the delay in completion of the flat and offering its possession to the consumer was on account on circumstances beyond his control, this would constitute deficiency on the part of the builder / service provider in rendering services to the consumer.  If I accept the contention that the builder can indefinitely postpone and delay the construction of the flat and the flat buyer has no option but to wait till the builder decides to complete the construction and offer possession to the buyer, that would be nothing but a travesty of justice and result in a situation where the flat buyer is left at the mercy of the builder, without recourse to an appropriate legal remedy.  Such an interpretation, if taken, is bound to defeat the very objective behind the enactment of the Consumer Protection Act, as far as housing construction is concerned.  Therefore, I am unable to accept the contention advanced by the learned counsel for the opposite party.  In my view, wherever the builder commits a particular date or time frame for completion of the construction and offering possession to the buyer, he must necessarily honour the commitment made by him, though a minor delay may not constitute deficiency in the service rendered by him to the buyer.  Of course, if the builder is able to how that the delay in completion of the construction and offering possession to the buyer is attributable wholly to the circumstances beyond his control, that may not be a case of deficiency in the services rendered to the consumer".

NCDRC - The builder ought not to have accepted money and entered into agreement with the buyers without approval of the building plans

 In the Matter of Yogesh Sharma & Anr., vs M/S Unitech Limited Complaint no.Consumer Case No. 267 OF 2014  decided on 26.11.2015 before National Consumer Disputes Redressal Commission

The NCDRC in the case observed that the builder ought not to have accepted money and entered into agreement with the buyers without approval of the building plans by GNIDA (Greater Noida Development Authority). If the opposite party chose to accept money from the flat buyers and enter into agreements, undertaking to give possession within a particular time frame, without having possession of the land and without approval of the building plans, it is only itself to blame for a situation in which the construction got delayed on account of the delay in approval of building plans and physical delivery of the land to it on the spot.

The Authority is not bound by the declaration of the Promoter under section 4(2)(1)(c),Authority is not powerless if the promoter’s declaration is arbitrary and unreasonable.Promoter cannot be given free run in deciding time for completion of a project thereby adversely impacting the interest of the prospective Allottees.

 In the Matter of M/s. Parador Promoters Amritsar Private Limited vs. Real Estate Regulatory Authority Complaint no.Appeal no. 113 of 2019 decided on 03.07.2020 before Punjab Real Estate Appellate Tribunal

Facts of the case: 

• The Promoter obtained license on 13.06.2019 to develop a residential colony within a period of 5 years. 

• The period commenced from 13.06.2019 and ended on 12.06.2024 with a stipulation that the development work must be completed within the said period. 

• The Promoter applied to the Real Estate Regulatory Authority, Punjab for registration of the project. Order passed by Punjab Authority: 

• The Authority accepted the registration of the project but allowed the timeline for completion of the project up to 12.06.2023 i.e a period of 4 years instead of 5 years. 

• The Punjab Authority observed that even though the license to develop the colony is valid up to 12.06.2024, the license of the Promoter is valid only up to 19.12.2022 . Secondly, though Change of land use is for 93.265 Acres, only 70.264 Acres is proposed to be developed in Phase I. Balance 23.001 Acre is proposed in Phase 2. Since the Promoter is not taking up the entire Group Housing in one phase, the date of completion should be 12.06.2023.

• Aggrieved by the said order of the Authority, the Promoter filed appeal before the Punjab RERA Appellate Tribunal. 

Issue before Appellate Tribunal: 

•     Whether the Act entitles the Authority to reduce the completion period of the project while registering the project? 

Promoter’s contentions: 

1. Promoter relied on section 5(3) of the Real Estate (Regulation and Development) Act, 2016. It challenged the ability of the RERA authority to vary the period applied by the promoter in the application. 

2. Reference was also made to section 6 of the RERA Act stating that a license granted to the Promoter for 5 years could not have been varied to its disadvantage while registering the project. It necessarily had to be commensurate with the period prescribed in the license. Any other interpretation would render the provision of section 6 of the Act illusory. 

3. Promoter claimed that it has now been deprived of the right to seek extension which had it not been restricted to 4 years 1 2018 (1) ABR 558 by the Authority, would have given the Promoter 6 years by including the extended period of one year. 

4. Referring to Neelkamal Realtors Suburban Pvt. Ltd. and Ors v. Union Of India 1 , it stated that the observations of this judgment can only be applied to ongoing projects. 

5. Promoter lastly contended that no reasoning was given by the Authority while reducing the period and hence decision has to be revisited. Authority’s contentions: 

The Authority opposed the Promoter’s appeal stating: 

1. Under Section 18 of the Act the Authority may, based on facts of each case and for reasons recorded in writing, extend the registration granted to a project. 

2. That extension of registration is not a matter of right but it is dependent on circumstances that the Promoter has to establish to be beyond his control i.e due to force majeure.

3. Reliance was placed on the judgement of Neelkamal Realtors Suburban Pvt. Ltd. and Ors v. Union Of India (supra) holding that in case the promoter mentions unreasonable period to complete construction, certainly the authority would not register such an application of the promoter, taking into consideration the facts of each case. 

Verdict of Appellate Tribunal: 

The Appellate Tribunal upheld the order of Authority in reducing the period of completion of project and dismissed the appeal of the Promoter. It observed that:

(i) The Authority is not bound by the declaration of the Promoter under section 4(2)(1)(c). It placed reliance on Neelkamal Realtors Suburban Pvt. Ltd. and Ors v. Union Of India (Supra) and stated that Authority is not powerless if the promoter’s declaration is arbitrary and unreasonable. Promoter cannot be given free run in deciding time for completion of a project thereby adversely impacting the interest of the prospective Allottees. 

(ii) The Tribunal rejected the Promoter’s contention that the observation of the judgement of Neelkamal case is only applicable to the ongoing project. The tribunal stated that no such distinction manifests from the provisions of Act or the observation of the judgment. 

(iii) The RERA Act does not specifically say that the period of license and the declaration made by the Promoter in terms of section 4(2)(1)(c) have to be coterminous. 

(iv) The Tribunal held that the one-line reason given by the authority for reducing the time period is sufficient. Merely because it is not set out in detail cannot ipso facto be a ground to hold it a non-speaking order.

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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

in the absence of any pleadings or material placed on record for award of compensation on account of mental agony, compensation ought not to have been awarded.

 In the Matter of Estate Officer vs. Real Estate Regulatory Authority, Punjab and Anr. Complaint no. Appeal No. 65 of 2019 decided on 01.07.2019 before Punjab Real Estate Appellate Tribunal

In this case, the RERA Appellate Tribunal was called upon to examine the correctness of an order of the Adjudicating Officer, vide which compensation had been awarded under Section 72 of the Act on account of two heads, viz., mental agony and litigation expenses. While passing the Order for compensation, the Adjudicating Officer had opined that since the Act did not define the term compensation, and had thought fit to draw upon the scheme of Workmen’s Compensation Act, 1923, the Motor Vehicles Act 1988 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 for settling the claims for compensation. 

The Appellate Tribunal held:

(i) The objects and reasons in the matter of award of compensation under those enactments acts have no connection even remotely with the award of compensation under the RERA and to draw a corollary from the said enactments for considering the award of compensation was wrong and illegal;

(ii) Section 72 of the Act operates a self contained code for consideration of the factors to be taken into account while deciding the quantum of compensation. In support of this proposition, the Tribunal also relied on the previous decision in the same matter, wherein it had been concluded by reference to Section 72(d) that the factors enumerated in the said provision were not exhaustive;

(iii) that in the absence of any pleadings or material placed on record for award of compensation on account of mental agony, compensation sought not to have been awarded. It was found that in order to support the plea of compensation, only a bald statement had been made and no material was placed on record to support the case of loss suffered on account of interest paid for bank loan availed. The Tribunal also relied on Bhavnagar University vs. Palitana Sugar Mills Pvt. Ltd. 2003 (2) SCC 111, for the proposition that when a statutory authority is required to do a thing in a particular manner, the same must be done in that manner or not at all. 

The award of compensation on account of litigation expenses was upheld, while that on account of mental agony was set aside.

Appellants, having accepted a part of benefit, are not permitted to approbate and reprobate also they can not be permitted to resile from their earlier stand. Therefore, the Appellant has to be estopped from claiming again.

 In the Matter of S.Dominic Savio and Anr. vs. Phoenix Serene Spaces Pvt. Ltd. Complaint no.Appeal No. 64 of 2019  decided on 28.02.2020 before Tamil Nadu Real Estate Appellate Tribunal

The Appellant entered into an agreement with the Respondent for a flat in the project of the Respondent. The apartment was to be completed by 31.12.2015 with a grace period of six months. However, the unit was not delivered on time and the Respondent agreed to cancel the allotment on 05.05.2018, refunding the principal amount in three installments. In December 2018, the Appellants approached Respondents for refund of interest, for which the Respondent refused. Being aggrieved, complaint was filed before Adjudicating Officer for interest and compensation. The said complaint was dismissed by the Adjudicating Officer. In the present Appeal, it is contented by the Appellants that Respondent visited their offices and homes to deliberate on the refund process and due to the mental pressure and undue influence exerted by the Respondents, they were forced to accept foregoing interest and compensation and agreed for refund of principal only to free themselves from the mental agony. The Tribunal after going through the communication between the Appellant and the Respondent over a period of time held that there was no undue influence or undress. The said communication clearly reflected that Appellants voluntarily asked the Respondents to cancel the allotment, refund the money without any deduction, promising to forego their claim of interest and compensation. Further, it was held that the action of the Appellants was an afterthought, since they had waived their right of interest and compensation due to their agreement with the Respondent. The Appellants in this case, having accepted a part of benefit could not to be permitted to approbate and reprobate nor can they be permitted to resile from their earlier stand. Therefore, the Appellant was estopped from claiming again. 

Only one condition of Either 500 Square meter of land or number of apartments proposed to be developed does not exceed eight inclusive of all phases, need to be satisfied under section 3(2) of the RERA Act.

In the Matter of Geetanjali Aman Constructions Vs Hrishikesh Ramesh Paranjpe Complaint no. SC10000672 decided on 10.07.2019 before Maharashtra Real Estate Appellate Tribunal 

The Bench of Indira Jain J. Chairperson, SumantKolhe, Member (J), S.S. Sandhu, Member (A) of the Mumbai RERA Tribunal, held by the ratio of 2:1 that only one condition need to be satisfied

under section 3(2) of the RERA Act which states that no registration is                         required in those project

where the area of land proposed to be developed does not exceed 500 square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases. It was held principal question that needs to be addressed in this appeal revolves around the interpretation of word ―or‖ used in clause (a) of Section 3(2) of RERA. The crux is whether ―or‖ has to be read conjunctively or disjunctively. Needless to state that need to interpret the provisions of law would arise only when there is ambiguity left or a doubt is created in understanding the provisions. In our view in understanding the provision of law what should be done when the words are clear and unambiguous is to give the words that meaning which they convey plainly, irrespective of the consequence

Grant of relief of compensation can only be adjudicated by the adjudicating officer,if compensation is provided as a part of the multiple reliefs, the complaints have to be placed before the adjudicating officer.

 In the Matter of Sameer Mahawar Vs. MG Housing Pvt. Ltd. Complaint no. appeal no. 6/2018 decided on 02.05.2019  before Haryana Real Estate Appellate Tribunal

In this order after taking into consideration the provisions of Sections 11(4), 12, 14, 18, 19, 31, 34(f),  37, 38 and 71 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter called the Act) and rule 28 & 29 of Haryana Real Estate (Regulation and Development) Rules, 2017 (hereinafter called the rules). The Honourable Appellate tribunal added that. “ Thus, as a result of our aforesaid discussions, we conclude and sum up our considered view in following manner :-

(i) That violations and causes of actions arising out of the same bundle of facts/rights giving rise to the multiple reliefs shall be placed before one and the same forum for adjudication in order to avoid the conflicting findings. 

(ii) The complaints for the grant of relief of compensation can only be adjudicated by the adjudicating officer as per the provisions of section 71 of the Act and rule 29 of the Rules. 

(iii) Similarly, if compensation is provided as a part of the multiple reliefs alongwith refund/return of investment with interest flowing from the same violation/violations and causes of action, the complaints have to be placed before the adjudicating officer exercising the powers under 3 Sections 31, 71(1) read with rule 29 of the Rules as only the adjudicating officer is competent to deal with the relief of compensation.”

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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Car parking space in open areas or stilt portions are not saleable along with the unit because they are "common areas".

 In the Matter of Yogesh Dixit vs. Manikcand Vasudha Developers (Sai Eshanya) Complaint no.CC005000000023018  decided on 03.10.2019 before Maharashtra Real Estate Regulatory Authority

MahaRERA, while dealing with the issue of car parking, relied on the judgment of the Hon’ble Supreme Court of India in the matter of Nahalchand Laloochand Private Limited vs. Panchali Co-operative Housing Society Limited. The Hon’ble Supreme Court held that under MOFA, stilt area cannot be treated as a garage and that parking areas (open to sky or stilted portion) cannot be excluded from common area and facilities under MOFA.

Accordingly, MahaRERA was of the view that the parking space in open parking area or stilt portion are not saleable along with the unit because they are "common areas".

MahaRERA further observed that the common areas are to be transferred to the society of the allottees by the developer and therefore the society vis-a-vis its members have the right to use each and every part of the common area including the open or stilted car parking space. The developer has no right to sell the stilt parking space as its control is with the society / association of the allottees.

Karnataka Rera - No Compensation is payable for mental agony in case of breach of a contract.

 In the Matter of Suman Rupanagudi vs. Adarsh Developers Complaint no. CMP/190912/0004118 decided on 31.01.2020  before Karnataka Real Estate Regulatory Authority

Karnataka RERA tried to clear this ambiguity by placing reliance on the judgment of the Hon’ble Supreme Court of India in Ghaziabad Development Authority vs. Union of India. (2000)6 SCC113 The Hon’ble Supreme Court, while considering a case of breach of contract under Section 73 of the Indian Contract Act, 1872, held that no damages are payable for mental agony in case of breach of a contract.

In Lucknow Development Authority vs. M.K. Gupta,AIR1994 SC 787 the Hon’ble Supreme Court of India held that the liability for mental agony had been fixed not within the realms of contract but under the principles of administrative law.

In view of the same, Karnataka RERA refused to grant relief towards mental agony

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.

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 - industrial units do not come under the definition of “real estate project” and the provisions of the Act are not applicable to industrial units.

 In the Matter of Techno Drive Engineer Pvt. Ltd. V/s Renaissance Indus Infra Pvt. Ltd. Complaint no. CC006000000078620 decided on 26.11.2019 before Maharashtra Real Estate Regulatory Authority.

In the instant case, the Allottee had filed a complaint against the developer on the ground that the developer failed to hand over an industrial unit booked by the Allottee in accordance with the agreed date of possession. The Allottee had booked the unit for setting up its industrial manufacturing unit. MahaRERA dismissed the complaint stating that industrial units do not come under the definition of “real estate project” and the provisions of the Act are not applicable to industrial units.

The judgement can be accessed at https://www.livelaw.in/pdf_upload/pdf_upload-367507.pdf

The Authority has Jurisdiction to decide the matters between the Allottee and promoter , though their agreement has an arbitration clause in it.

In the Matter of Sarita Bhairu Chandekar & oth Vs Prashant Bhandari Complaint number CC005000000022925 decided on 11.11.2019  before  Maharashtra Real Estate Regulatory Authority

The Authority Relied on the Judgment by Supreme Court in the matter of HDFC Bank Ltd-v/s-Satpal Singh Baxi (MANU/DE/5308/2012) in which the Supreme Court also held that if particular enactment creates special rights and obligations and gives special power to the Tribunal which are not in Civil Court such as tribunal constituted under Rent Control Act and the Industrial Disputes Act, the dispute arising under the said enactments cannot be arbitral otherwise other disputes are arbitral.

In Hemangi Enterprise-v/ s-Kamaljeet Singh Ahluwalia 2017 STPL 13227 SC, the Supreme Court found that the dispute between the parties was that of the tenant and landlord relating to leave and license agreement and therefore exciusive jurisdiction to deal with such dispute is conferred upon the Court of Small Causes and therefore, though there wasthe Arbitral Clause in the agreement, the Court held that the dispute was not arbitral. 

As per the Court

• Section 20 of RERA has special powers

• under Section 31 of it to adjudicate the dispute between the aggrieved person on one hand and the promoter, allottee, real estate agent on the other for violation or contravention of the provisions of RERA, Rules and Regulations made thereunder.

• Section 32,34,35 are the special provisions.

• Section 79 of RERA bars the jurisdiction of Civil Court from entertaining any matter which the Authority is empowered under the Act to determine.

• Section 59 lo 69 relates to the offences and penalties.

• A Special Forum of Adjudicating Officers whose qualification is that of District Judge has been set up by Section 71 of RERA to decide the matters arising out of Section 1.2, 74, 78 & 19.This case arises out of Section 18 of the Act for which a separate special forum has been provided by RERA and hence, the jurisdiction lies with the Authority and it cannot be delegated to the Arbitrator despite the provisions of the Arbitration and Conciliation Act and the Arbitration Clause of the agreement. Hence, Court did not find any force in the respondents' submission that this Authority has no jurisdiction. The Court finds that the Authority has jurisdiction to entertain this complaint.

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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.