RAJEEV MEHROTRA vs NEO DEVELOPERS PVT.LTD.

SHARERA #eunuennr,r BEFORE THE HARYANA REAL ESTATE REGULATORY AUTHORITY, GURUGMM ORDER 1.

The present complaint has been filed by the complainant/allottee under section 31 ofthe Real Estate (Regulation and Development) Act,2016 (in short, the Act) read with rule 28 of the Haryana Real Estate (Regulation and Development) Rules, 2017 (in short, the Rules) for violation ofsection 11(41(aJ of the Act wherein it is inter alia prescribed that the promoter shall be responsible for all obligations, responsibilities and functions under the provisions of the Act or the Complaint No.

1229 of 2023 Complaint no.

1229 of 2O23 )ate of complaint 22.O3.2023 Date oforder 12.o7.2024 Complainant Versus Respondent Member Complainant Respondent Rajeev Malhotra, R/o: - 7277, pocket-A, Sector-A, Vasant Kunj, Delhi-1 10070.

M/s Neo Developers pvt.

Ltd.

Regd.

Oflice at: 32-8, pusa Road, New Delhi- 110005.

COMM: Sanieev Kumar Arora APPEAMNCE: Saurabh fain (Advocate] Venkat Rao (AdvocateJ Page 1of15 * HARERA #eunuennr,rr Complaint No.

1229 of 2023 Rules and regulations made thereunder or to the allottee as per the agreement for sale executed tnfer se.

A.

Unit and prolect related details 2.

The particulars of unit details, sale consideration, the amount paid by the complainant, date of proposed handing over the possession, delay period, ifany, have been detailed in the following tabular form: s.

N.

Particulars Details L.

Name ofthe proiect "Neo Square", Sector 109, Gurugram 2.

Project area 2.7L acres Commercial complex 3.

Nature of the project 4.

DTCP license no. and validiry status 102 ol 2008 dated 15.05.2008 valid up to 14.05.2024 RERA Registered/ not registered 109 of 20L7 dared 24.08.2017 valid up to 23.08.2021. plus 6 months of extension due to COVID-19 i.e.

22.02.2024 Registrdtion exoired 6.

Date of allotment 02.07.20t2 IPaqe 18 of complaint) 7.

Unit no.

Original unit - 59 (page 18 of complaintJ Changed unit - 57 [paee 22 of comolaintl Unit area admeasuring Original unit - 578 sq. ft.

78 sq. ft. (page 18 of complaint) Changed unit - 551 sq. ft. fpase 22 of complaintl 9.

Date of execution of agreement 27.70.2012 IPage 20 of complaintJ 10.

Possession clause as per agreement 5,2 That the company shall complete the construction of the said building within which the said space is located within 36 months from the date of execution of this agreement or from the start of construction whichever is later and Page 2 of 15 HARERA ffiGURUGRAN/ Complaint No.

1229 of 2023 apply for grant of completion/occupancy certifi cate.

5,4 That the allottee hereby also grants an additional period of 6 (sixl months after the Completion Date as grace period to the Company after the expiry of aforesaid period.

11.

Date of start of construction 15.r2.2015 fPaee 52 of replvl 12.

Due date of possession 15.06.2 019 (calculated from the date of start of construction being later along with 6 months of srace periodl 12.

Sale consideration Rs.49,59,000/- [As per pase no.

24 of comPlaint) 13.

Amount paid by the complainant t4.

Date of surrender 13,08.2 018 fpaee 73 of replyl 15.

Occupation certificate /Completion certificate Not obtained 16.

Offer of possession Not offered B.

3.

Facts ofthe complaint: The complainant has made the following submissions: - L That the complainant was provisionally allotted a commercial shop/unit bearing no.

59, Ground Floor in the project of the respondent named "Neo Square" at Sector-109, Gurgaon vide provisional allotment letter dated 02.07.201'2.

Thereafter, the unit number was shifted from unit no.59 to unit no.57 in Tower A located on the Ground floor, measuring about 551 sq.ft.

II.

That the buyer's agreement was executed by the parties on 27.lO.ZOl2 for a basic cost of Rs.49,59,000/- against which the complainant has paid a total sum of Rs.19,22,Q56 /- on different dates Page 3 of 15 Rs.

79,22,0s6 /- [As Der S0A at Dase no.

78 of replyl HARERA ffiGURUGRAI/ between 2012 and 2015 to the respondent.

IIl.

That as per clause 5. clause 5.2 of the buyer's agreement, possess ion of the unit was to be handed over within 36 months from the date of execution of the buyer's agreement.

IV.

That since the construction of the project was not progressing at a satisfactory pace and the possession ofthe unit nowhere in sight, the complainant being retired from service, was in need of money and hence, could not wait indefinitely for completion of the construction and accordingly, in the year 2018, the complainant requested the respondent to refund him the money paid by him towards the said unit.

V.

That the respondent agreed to cancel the allotment and refund the entire amount paid by the complainant.

Pursuant thereto, the respondent directed the complainant to return all the original documents pertaining to the said unit including the provisional allotment letter, the buyer's agreement as well as payment receipts and other such documents relating to the unit.

VI.

That the Complainant returned all the original documents pertaining to the said unit as demanded by the respondent' The surrender of all original documents was acknowledged by the respondent on 13.08.2018.

The Complainant had further signed certain documents which the respondent had made him to sign including affidavit' VII.

That subsequently, the respondent had issued post dated cheques for an amount totalling to Rs.13,23,154/- out of Rs.19,22,056/- to the complainant in the following manner: i.

1st cheque of Rs 4,00,000/- dated 30.10.2019 ii.

Cheque No.002114 dated 28.02.2021for Rs.3,00,000/- Complaint No.

1229 of2023 Page 4 of 15 HARERA ffiGURUGRAIX Complaint No.

1229 of 2023 iii. cheque No.002115 dated 31.03.2021for Rs.3,00,000/- iv.

Cheque No.002116 dated 30.04.2021' for Rs.3,23,154/- Out of the aforementioned cheques, 1st cheque of Rs.4,00,000/- dated 30.10.2019 was encashed after one year.

VIIL That thereafter the respondent sent an email date d 28.1.2. d 28.1.2.2020 to the complainant and had unilaterally and arbitrarily stated that instead of balance payable amount of Rs.15'22,056/-, they would refund Rs.g,23,754/- and that the balance sum of Rs.5,98,846/- has been adjusted towards the another unit being unit no.21 booked by the complainant on the 1* floor of same proiect.

IX.

That thereafter, the 2od cheque of Rs.3,00,000/- was encashed in February 20 21.

X.

That the respondent sent an email dated 07.05 2021 to the complainant stating that due to lockdown, the office was closed and requested the complainant not to deposit the cheques till further intimation.

XI.

That thereafter, since the complainant was in need of money, he sent an email dated 08 .07 .20?1to the respondent informing that since the cheque for March 2021 has expired, it needed replacement and further that since he was in need of money and had no other source of income, he shall be depositing the cheque for the month of April 2021 amounting t o Rs.3,23 '1'54 I -.

XIl.

That the complainant had sent an email dated 05 01 2023 to the respondent requesting refund of the balance amount, however' the respondent chose not to respond to the queries of the complainant' XIII.

That since the respondent has failed to refund the amount paid to the complainant, the respondent is also liable to pay to the complainant' Page 5 of 15 C.

4.

HARERA ffiOURUGRAM Complaint No.

1229 of 2023 pendente lite and future interest @18olo p'a', as is being charged by the respondent till the date ofthe realization, or such higher interest which this Hon'ble Authority may deem fit in the interest ofiustice' XIV.

That the present complaint is filed under Section 1B read with Section 19 (4) of the Real Estate (Regulation and Development) Act' 2016 in order to seek refund ofthe money paid towards the unit/shop' Relief sought bY the complainant: The complainant has sought following relief(s): I.

Direct the respondent to refund the balance paid-up amount along 5. t along 5. with prescribed rate of interest.

0n the date of hearing, the authority explained to the respondents/promoter about the contraventions as alleged to have t. been committed in relation to section 11(4) (a) of the Act to plead guilty or not to plead guilty.

Reply by the resPondent The respondent has contested the complaint by filing reply dated 15.12.2023 on the following grounds: - That the complainant approached the respondent to enquire and to know the specific details of the prolect i e', "Neo Square"' situated at Sector-1.09, Gurugram, Haryana being developed by the respondent That after being fully satisfied with the project' the complainant decided to opt for the construction link plan and through application form dated 2 3.0 5.2012 requested for allotment of a unit in the proiect That initially, on a provisionalbasis unit no 59 was allotted However' on 27.L0.2072 the "buyer agreement" was executed between the parties, whereby a shop bearing no' 57 on Ground Floor in the area designated for retail shopping having super areas of approximately ll.

D.

6.

Page 6 of 15 ffHARERA #-eunuennll Complaint No.

1229 of 2023 551 sq. ft at Rs.9000/- rate per sq. ft' for a basic sale consideration of Rs.49,59,000/- was finally allotted to the complainant and against the same the complainant had only paid Rs'19,22,056 /- to the respondent' That in complaint bearing no' 1328 of 2019 titled as "Ram Avtar Nijhawan vs M/s Neo Developers Put Ltd', pertaining to the same proiect vide order dated 05.09.2019 the Authority has held and observed that the due date of possession will be calculated from the date of start of construction for the instant proiect and held due date of start of construction for the instant pro,ect as 15 12'2015 The Authority has also granted a period of 6 months as grace period' Accordingly, the due date of delivery of possession in the instant case comes out to be 15.06.2019.

5.06.2019.

That the complainant miserably failed to comply the payment plan under which the unit was allotted to the complainant and further on each and every occasion failed to remit the outstanding dues on time as and when demanded by the respondent The complainant as per the records of the respondent had only paid Rs'19'22'056/- against the basic sale consideration of Rs.49,59,000/-' That upon the failure of the complainant to comply with the final notice dated 13.07 2016 issued by the respondent' the complainant approached the respondent for a meeting on 21'07 2018 and requested the respondent to cancel the unit and to refund the amounts paid by the complainant i.e, before the due date of possession i e ' 15.06.2019 due to their own personal reasons and the same has been categorically admitted by the complainant in para 6 and 7 of the complaint filed by the complainant' III, lv.

Page 7 of 15 HARERA ffiGURUGRAM Complaint No.

1229 of 2023 vi. lt is to be noted that the complainant vide a notarised affidavit on Rs.100 non-iudicial stamp paperbearing no.

T 581123, on 10.08.2018, stated that the complainant is seeking the refund of amount paid by complainant against the sale consideration of the unit without any interest and further agreed and undertook not to claim any right, lien, interest, expenses, right ofpurchase lease, etc. ofany kind whatsoever in nature from the respondent and further agreed to keep the respondent harmless against all damages, losses, claims, cost, etc, which the respondent may suffer as a result of cancellation of the unit ofthe complainant.

Further, an indemnity bond dated 10.08.2018 was executed in favour of respondent.

Accordingly, the complainant vide its letter dated 13.08.2018 surrendered the original buyer agreement and payment receipts with the respondent for the process of refund. vii.

That upon the request of the complainant for cancellation of the unit due to his pepsonal reasons as stated, the responded refunded Rs. funded Rs.7,00,000/- vide cheque dated 30.10.2019 of Rs.4,00,000/- and Rs.3,00,000/- via cheque no.

002114 dated 28.02.2021J to the complainant out of the total amount of Rs.19,22,056 /- paid by the complainant.

Further, upon the request of the complainant, the respondent adjusted Rs.5,98,846/- towards the outstanding dues of another unit bearing no.

21 booked by the complainant on I st Floor in the same proiect. viii.

That the request for refund by the complainant were before the due date of possession \.e., L5.06.20L9, meaning thereby that in the present case the complainant is surrendering his unit' Therefore, in view of Haryana Real Estate Regulatory Authority, Gurugram (forfeiture of Earnest Money by Builder) Regulation, 2018 Page 8 of 15 * HARER, , #-eunuennnl 7.

E.

Complaint No.

1229 of 2023 dated 05.12.2018, the respondent herein is entitled for forfeiture of 100/o earnest money.

Accordingly, out of the amount paid i e' Rs.L9,22,056 /' .

Rs.7,00,000/- refunded vide cheque dated 30 10 2019 of Rs.4,00,000/-and Rs.3,00,000/- via cheque no 002114 dated 28.02.2027 .

Rs.5,98,846/- adjusted against outstanding dues from the complainant against unit bearing no.21 .

Rs.7,03,032/- deducted as earnest money [10% ofthe total sale consideration) since the complainant sought refund before the due date of handing over of possession' In fact, an amount of Rs.79,822/- is recoverable from the complainant as on date' Copies of all the relevant documents have been filed and placed on the record.

Their authenticity is not in dispute Hence, the complaint can be decided on the basis of those undisputed documents and submissions made by the parties. lurisdiction of the authority The authority observes that it has territorial as well as subiect matter jurisdiction to adludicate the present complaint for the reasons given below.

E.l Territorialiurisdiction As per notificatio n no. atio n no. ll92/20:17-1TCP dated 741-2 2017 issued by Town and Country Planning Department, the jurisdiction of Real Estate Regulatory Authority, Gurugram shall be entire Gurugram District for all purpose with offices situated in Gurugram ln the present case' the project in question is situated within the planning area of Gurugram 8.

Page 9 of15 ffiHARERA ffieunuennrrl Complaint No.

1229 of 2023 F.

District.

Therefore, this authority has complete territorial jurisdiction to deal with the present complaint.

E.ll Subiect matter iurisdiction Section 11(4J(aJ of the Act, 2016 provides that the promoter shall be responsible to the allottees as per agreement for sale Section 11(4)(a) is reproduced as hereunder: Section 77,, '.(4) The promoter shall- (a) be responsible for oll obligations, responsibi.lities a.nd fun,ctions ' - undei the provisions of this Act or the rules and regulqtions mode theriunder or to the allottees os per the agreement for sale, or to the associotion of allottees, os the cose moy be' till the conveyonce oI oll the aporLmenls' plot' or bui]dtng' a' the cose may be, Lo the ollottees, or the Lommon oreos to lhe ossociotion of allottees or the competent quthority' as the cose may be; Section g4-Functions of the Authority: 34A of the Act provides to ensure compliance of the obligations cait- upon the pro^oters' the ollottees and the reol estqte agents under this Act and the rules ond regulotions made thereunder' So, in view of the provisions of the Act quoted above' the authority has complete jurisdiction to decide the complaint regarding non- compliance of obligations by the promoter' Findings on the relief sought by the complainant' F.l Direct the respondents to refund the balance paid-up amount along with Prescribed rate of interest' lr. in it Jp."."nt complaint, the complainant intends to withdraw from the project and is seeking return of the amount paid by him in respect of subject unit along with interest as per section 18(1) of the Act and the sa and the same is reproduced below for ready reference; " section 78: - Return of qmount ond compensqtion 18(1). lfthe promoter fiils to complete or is unable to give possession ofon aPortment, PIot, or building' -ii, Lrrtaonii with the rcr;s of the agreement for sole or' os the case moy be' duly completed by the dote specifed therein; or 9.

10.

Page 10 of 15 HARERA ffiGURUGRAM tbldue to dtsrcntinuonLe oj hii buriness os o developer on o'counL oI '-' tripiriio, or revocolion of lhe registrotrcn under this Act or for anY other reason, n, iiott O" tirbt" on demand to the allottees' in cose the allottee *iiii to witnara* lrom the project, without prejudice to ony other. remedy availabte, ti return the amount received by him in respect iJtii oport-"nt, plot, building, os the case moy be'.wilh inter,est ar such' rote as mqy be prescribed n this behall tnLludtng compensation in the monner os provided under this Act: iroiid"d ,not *hrrc an allottee does not intend to withdraw from the Droiect, he shalt be poid by the promoter' interest for every month of irti-iill ti," nonaing o,i, of tie post"ssion ot such rote os moy be prescribed " (Emphasis suPPlied) cf"uiu i.z ofthe Luyer's agreement dated 27 10 2 012 provides the time period of handing over possession and the same is reproduced below: 5.2 ThoL the compony sholl complete the constructton of lhe soid buitding within which the soid spoce is locoted wtlhtn Jo nonths lroi the dote ofexecution of this ogreeme.nt or lrom ln?- snrl oi constructon whtchever is loter ond opply lor qrqnl ol c o m p I e ti o n / o c c u p q n cy c e r tifi c a te." 5.4 "Thotthe allottee hereby olso grants on odditional period of 'd i<ixl months after the Completion Dote as groce period Lo the Compony ofier ihe expiry ofoforesaid period" Due date oi handing over possession and admissibility of grace period: As per clause 5. clause 5.2 and clause 5'4 of the buyer's agreement' the possession of the allotted unit was supposed to be offered within a stipulated timeframe of36 months from the date ofexecution ofbuyer's agreement i.e., 27.10.2012 or commencement of construction i e ' 15.12.2015 (as per order dated 05 09 2019 in complaint bearing no' CC l\328 /20L9) whichever is later plus 6 months of grace period' Therefore, the due date has been calculated as 36 months from the date commencementofconstruction.Furtheragraceperiodof6monthsis allowed to the respondents being unqualified Thus' the due date of possession come out to be 15 06 2019' t2.

1229 of 2023 13.

Page 11 of 15 HARERA ffiGURUGRAM Complaint No.

1229 of 2023 14.

The complainant was allotted a shop bearing n0 57, Ground Floor approximately 551 sq. ft in the project of the respondent named "Neo Square" at Sector-109, Gurgaon vide buyer's agreement dated 27.10.2072, for a sale consideration of Rs 49,59,000/- and against the same the complainant had paid a sum of Rs 19,22,056/- to the respondent.

As per clause 5.2 of the buyer's agreement, the due date of possession was 15.06.2019.

However, the complainant has already withdrawn from the project vide letter dated 13 08 2018 and sought refund of the amount paid by him without any deductions referring to meeting held betlveen them on 21.07.2018 As per record' out of the total amount paid by the complainant against the unit in question ie ' Rs.lg,22,056/-, the respondent has refunded a sum of Rs 7'00'000/- through cheques to the complainant and an amount of Rs 5'98'846/- was adjusted towards outstanding payments ofanother unit bearing no' 21 booked by him on 1st Floor in the same proiect and hence an amount of Rs.6,23,2101- remained balance to be refunded to the complainant' The respondent has contended that vide a notarised affidavit dated 10.08.2018, the complainant sought refund of amount paid by him without any inter&tlrl{f&t&f{rgfi€. t&f{rgfi€.&ilf Sxbrtoot< not to claim any right, lien, interest, expenses, right of purchase lease' etc of any kind whatsoever in nature from the respondent Further, an indemnity bond dated 10.08.2018 was also executed in favour of respondent' Accordingly, the complainant vide its letter dated 13 08 2018 surrendered the original buyer agreement and payment receipts with the respondent for the process of refund Moreover' as the request for refund by the complainant was made before the due date of possession i.e., 1.5.06.2019.

Therefore, in view of Haryana Real Estate Regulatory Page 12 of15 ffiHARERA ffi arnuennl.

1229 of 2023 Authority, Gurugram (Forfeiture of Earnest Money by Builderl Regulation, 2018 dated 05.\2'2OlB' the respondent is entitled for forfeiture of 100/o of the sale consideration as earnest money After considering the documents available on record as well as submissions made by the parties, it is determined that vide letter dated 13 08 2018' the complainant has surrendered the unit in question i e ' before the due date of possession i.e., 15.06 2019' However' the respondent has failed to refund the refundable amount after certain deductions as prescribed under law to the complainant and it has only partially refunded the principal amount to the complainant till date Thus' after withdrawal from the proiect before the due date of possession' the respondent could not have retained more than 10% of the sale consideration and wasboundtoreturntheremaining'EventheHon'bleApexcourtofthe landincasesofMaulaBuxVs'Ilnionoflndia(7973)7gCR928'Sirdar KB Ram Chandra Rai llrs Vs' Sarah C' Urs' (2075) 4 SCC 736' and followed by the National Consumer Dispute Redressal Commission' NewDelhiinconsumercaseno.2T66120lTl|l|edaslayantSinghal and Anr.

Vs.

M/s M3M Indio Ltd decided on2607 2022 tookaview that forfeiture of the amount in case of breach of contract must be reasonableandifforfeitureisinnatureofpenalty,thenprovisionsof Section 74 of Cont racl Acl,l87Z a Acl,l87Z are attracted and the party so forfeiting must prove actual damages After cancellation of allotment' the flat remains with the builder and as such' there is hardly any actual damage' So, it was held that 10% of the sale price is reasonable amount to be forfeited in the name of earnest money Thus' keeping in view the principles Iaid down by the Hon'ble Apex court in the above mentioned two cases, the rules with regard to forfeiture of earnest money were Page 13 of 15 HARERA c& ar rDr laDA[/ 15.

G.

1b.

1229 of 2023 framed by the authority known as Haryana Real Estate Regulatory Authority Gurugram [Forfeiture of earnest money by the builder) Regulations, 2018, providing as under: - "5.

AMOUNT OF EARNEST MONEY Scenario prior to the Real Estate (Reguldtions qnd Development) Act,2016 was different.

Frauds were cqrried outwithout any feor as there was no low for the same but now, in view of the obove facts and tqking into consideration the judgements of Hon'ble Notional Consumer Disputes Redressal Commission ond the Hon'ble Supreme Court of Indiq, the outhoriqt is of the view thqt the forfeiture amount of the eornest money shall not exceed more than 10o/o olthe considerqtion amount of the real estate i,e. apartment /plot /building as the cqse mqy be in all cases where the cancellotion of the flat/unit/plot is mode by the builder in o unilateral monner or the buyer intends to withdrow from the project and any agreement containing qny clause controry to the aforesaid regulations shall be void ond not binding on the buyer"' So, keeping in view the aforesaid factual and legal provisions, the respondent cannot retain the amount paid by the complainant against the allotted unit and are directed to refund the paid-up amount of Rs.19,22,056/- after deducting 10% of the sale consideration of Rs.49,59,000/- being earnest money and after adiusting the amount already refunded by the respondent along with an interest @10 950/o p.a.

950/o p.a. (the State Bank of India highest marginal cost of lending rate (MCLR) applicable as on date +zyo) as prescribed under rule 15 of the Haryana Real Estate (Regulation and Developmentl Rules,2017 on the refundable amount from the date ofsurrender i.e., 13 08'2 018 till actual date of refund of the amount within the timelines provided in rule 16 of the Haryana Rules 201.7 ibid.

Directions of the authority Hence, the authority hereby passes this order and issues the following directions under section 37 of the Act to ensure compliance of Page 14 of 15 * HARERA #eunuorw Complaint No.

1229 of 2023 obligations cast upon the promoter as per the function entrusted to the authority under section 34[0: i.

The respondents/promoter are directed to refund the paid-up amount of Rs.L9,22'056/- after deducting 100/0 of tbe sale consideration of Rs.49,59,000/- being earnest money and after adjusting the amount already refunded by the respondent along with an interest @ 10.95% p.a. on the refundable amount from the date of surrender i.e., till its realization. ii.

A period of90 daYs is respondents to comPlY with the directions given and failing which legal consequences Complaint stands File be co x 17.

18.

Haryana Real Estate Regu Datedt t2.07 .2024 HARERA GURUGRAM Page 15 of 15