PARVEEN KUMAR GARG AND ANR vs BPTP LTD.

ffiHARERA ffi" GuRUoRAM Complaint No.

4559 of 2020 BEFORE THE HARYANA REAL ESTATE REGULATORY AUTHORITY, GURUGRAM Complaint no. : 4559 of 2O2O First date of hearing: L9.0L.202L Date of decision : 08.04.2021 1.

Parveen Kumar Garg 2.

Sushila Devi Both RR/O: A1,/3, Hastsal Road, h rr !

4 4 nn Fn Complainants 1.M/s BPTP Limited Regd.

Office: - M-1 Circus, New Delh Respondent CORAM: Dr.

K.K.

Khandelwal Shri Samir Kumar .' .1, I APPEARANCE: Shri Nikhil Mittal Shri Venket Rao Advocate for the respondent ORDER 1.

The present complaint dated 1,0.12.2020 has been filed by the complainants/allottees under section 31 of the Real Estate [Regulation and DevelopmentJ Act, 20i6 (in short, the ActJ read with rule 2B of the Haryana Real Estate (Regulation and Development) Rules, 20L7 (in short, the Rules) for violation of section 1,1,(4)(a) of the Act wherein it is inter alia prescribed that the promoter shall be responsible for all obligations, Page 1 of 33 Chairman Member ffi ffi_ HARERA GURUGl?AM Complaint No.

4559 of 2020 responsibilities and functions under the provision of the Act or the rules and regulations made thereunder or to the allottee as per the agreement for sale executed inter se.

A.

Unit and proiect related details 2.

The particulars of unit details, sale consideration, the amount paid by the complainants, date of proposed handing over the possession, delay period, if any, have been detailed in the J I ' J' following tabular form: S.

No Information 1.

1.403, 14th floor, Tower- 'qls {Page 11. of complaintl 2.

Unit measuring 1998 sq. ft. [185.62 sq, mtrs.] 3.

24.L2.2012 [Page 1.4 of complaint] 4.

Allotment letter 07.12.2012 [Page 43 of reply] 5.

Payment plan Subvention payment plan. [Page 43 of reply] 6.

Total consi Rs.

1,33,11,,226.00/- [as per statement of accounts page 58 of complaint] 7.

Total amount paid by the complainants Rs.

1,26,52,689.30/- [as per statement of accounts page 58 of complaint] 8.

Due date of delivery of possession as per clause 5. clause 5.1 read with clause 1.6 of the flat 24.06.2016 Page 2 of 33 Heads Unit no.

Date of execution of flat buyer's agreement HARERA ffiGURUGRAM 3.

The particulars < by the registrati Complaint No.

4559 of 2020 ority are as under: buyer's agreement i.e.

42 months from the date of sanction of the building Plan or execution of agreement, whichever is later.

9.

Offer of possession Not offered Occupation certificate for this Particular tower has not been received.

10 t1 O ccupation certificate Delay in handing over possession till the.date-'of , decision i.u., 08.0 4 years, g months, 15 days . ",r. i:i Ll ,, lt j Theparticularsofthepro;ie"o1'phrnely"'ParkTerra"asprovided I 'omoter M/s BPTP Ltd.

7. !

Name qf h pr T ParkT"erra ffi Sector-37D, Gurugram < GrouP Housing Project 2.

Name of the Project 3.

Locatlon of the project 4.

Nature of tl re project 5. -:^^!:^ h^r^' nt 0ngoing wnetngr pI-uJeLL r5 lrEvv ur ongoing ,h"* 6.

Registered as whole/phase Not Provided 7. lf develoPed in Phase, then phase no.

Not Provided B.

Total no. of Phases in which it is ProPosed to be develoPed if anY 299 of2017 9.

HARERA registration no' Registration certificate Date Validity 10.

13.10.20 1 t I t2.t0.2020 Page 3 of 33 ffiHARERA ffiGURUGRAM Complaint No.

4559 of 2020 11.

Area registered t0.23 acres \2.

Extension applied on N/A 13.

Extension certificate no.

Date Validity N/A N/A Licence related details of the proiect 1.

DTCP license no.

83 of 2008 dated 05.04.2008 2.

License validity/ renewal period 0 4.04.202 5 and 23.]-0.2019 3.

23.8L4 Acres 4.

Name of :,i ' the license 83 of 2008: - CountrYwide Promoters Pvt Ltd and 4 Others. holder : 5. ---T-T Nami tif the collaborator N/A 6.

N/A 7.

1.

Date of commencement of I Not Provided the project I Details of statutory approvals obtained S.N.

I Particulars lAPProval I I noand I I date Validity 1.

Approved building Plan 21.09.20L2 20.09.

0L2 20.09.20t7 Page 4 of 33 Licensed area Name 6fr,the developer/s in case of develoPment agreement , and/or marketing agreement entered into after obtaining license;'' Whether BIP permission has been obtained from DTCI' N/A Date of commencement of the proiect 4.

Complaint No.

4559 of 2020 Facts of the complaint The complainants have submitted as under: - That the respondent agreed to sell to the complainants the unit located in sector 37 -D 24.1.2.2012 execu n the complainants and the 'll l buyer's agreement dated irilent rnade bY the resPondent de possession of the flat was to date of signi buyer's agreement with a grace of 180 days i.e., la 2.20t6.

The respondent till the date of filing of the co ed to handover the Possession of e complainants within 42 months from the t to the comPlainants. ffiHARERA #h eunuennl,r no.

T-25-1403 in P Gurugram, HarYana respondent.

As in the flat bu be rende the above-mentio complainan on was not delivered to them on time as per the flat buyer's agreement' 6.

That by not delivering the possession even after the due date, the respondent therefore stands in breach of the flat buyer's agreement signed with the complainants.

The complainants have sent several emails to the respondent regarding the handover of possession, but no constructive reply was given to 2.

Environment clearance 15.10.2013 14.L0.2020 3.

0ccupation certificate date Occupation Certificate this particular Tower not been received. for has Page 5 of33 ffiHARERA S- Gl,ltlucRAM the complainants instead only false and vexatious assurances were given to the complainants in order to delay the delivery of possession of the said unit.

By the act and conduct of the respondent it is unambiguously lucid that the respondent from the very beginning had a malafide intention to cheat and defraud the complainants. plainants.

Relief sought by the complainants: The complainants have sought following relief[sJ: (i) Direct the respondent to handover the actual possession of the apartment bearing no.

T-25-1403 in project Terra located in sector 37-D Gurugram, Haryana-along with all the rights, titles and interests without any delay or default in terms with the flat buyer's agreement. [ii) Direct the respondent to pay the delayed possession charges as per RERA Act in the name of the complainant no.1 for the property situated at "Terra", Sector-37-D, Gurugram, Haryana, till the delivery of the actual, physical and vacant possession.

On the date of hearing, the authority explained to the respondent/promoter about the contravention as alleged to have been committed in relation to section 11(4) (a) of the Act to plead guilty or not to plead guilty.

Reply by the respondent.

C.

7.

4559 of 2020 B.

D.

Page 6 of 33 ffiHARERA ffiGURUGRAM 9.

4559 of 2020 The respondent has contested the complaint on the following grounds: - I.

The complainants have approached the hon'ble authority for redressal of their alleged grievances with unclean hands, i.e., by not disclosing material facts pertaining to the case at hand and, by distorting and/or misrepresenting the actual factual situation with regard to several aspects.

It is further submitted that the hon'ble Apex Court in plethoia of decisions had laid down strictly, that a party approaching the court for any relief, must come with clean hands, without concealment and/or misrepresentation of material facts, as the same amounts to fraud not only against the respondent but also against the court and in such situation, the complaint is liable to be dismissed at the threshold without any further adjudication.

II.

Reference may be made to the following instances which establish concealment/suppression/ misrepresentation on the part of the complainants: hon'ble authority that the complainants have approached the respondent thro ndent through a broker namely "Rovi Satyam Builders and Properties Pvt.

Ltd." after conducting due diligence and investigating the real estate market applied for booking of the unit in question.

Page 7 of 33 HARERA GURUGl?AM The complainants falsely stated that, timely payments was made by the complainants as and when demanded by the respondent, however, it is submitted that the complainants made defaults in making timely payments as a result thereof,, the respondent had to issue reminder letters dated L9.12.2072 and 22.0L.20L3 and only after the reminder letter$ W e ient, the complainants came forward to cleafi, itne Autrtanding dues against the demand letter, dated 08.11",201.2, accordingly receipt dated 01.02.2013 was issued by the respondent.

The conlplainants had further misrepresented that o the respondent never bothered to share the .onrtru.tio, 'status with the complainants.

It is submittqd that via different demand letters, the complaihdlr{s-.WB?e duly'-'informed from time ro time about the sta$6,of construction of the unit in question. ttl Furthegthe,resp,,,,ondGht has also, from time to time, been ffiating tHe complainants with respect to the progrei$ being made in the project by means of various emails wherein the respondent shared regular construction updates.

The complainants concealed from the hon'ble authority that on 24.0t.2013, a tri-partite agreement was executed between the complainants, respondent and HDFC Bank for loan amount of Rs.

95,00,000/- Complaint No.

4559 of 2020 Page B of 33 ffiHARERA ffi-GuRUoRAM Complaint No.

4559 of 2020 III. ru. and it was unequivocally agreed by the parties vide clause B, that in case of cancellation of booking, the entire amount advanced by the HDFC had to be returned to HDFC by complainants only.

Moreover, the respondent paid Rs.10,74,525.10 as Pre-EMI interest to the bank under the subvention scheme opted by the complainants. :. .!!

The sole intentiofliffi$hpisornplainants was to unjustly t;\t. stly t;\t.t!:i enrich himself a! tlf"p pP$Se of the respondent by filing I this frivoloug oomp[qint which is nothing but gross abuse of''.t ue g;.otgss,,gf law.

It is further submitted that consuidering the law laid down by the hon'ble apex court, thq-p;esent complaint warrants dismissal without any fur+her adludication.

Th e relief{s} iS"OUght by the complainants are u nj ustified, baseless an&befond the sco$e/ambit of the flat buyer's agreem€n! duly exd,ititdd between the parties, which lg i .. ,,j ... forms a1bf.$is,,fo?Uth- b i$ting relationship between the parties". ,The complainants entered into the said t' agreern-ent with the respondent with open eyes and is bound by the same.

The above submission implies that while entering into the flat buyer's agreement, the complainants had the knowledge that there may arise a situation whereby the possession could not be granted to the complainants as per the commitment period and in order to protect and/or safeguard the interest of the Page 9 of 33 HARERA GURUGRAM complainants, the respondent have provided reasonable remedy under clause-6.1, and the complainants having accepted to the same in totality, cannot claim anything beyond what has been reduced to in writing between the parties.

Reference may be made to Section-74 of the Indian Contracts Act, L872, which clearly spells out the law regarding sanctity and binding nature of the ascertained amount of compensation provided in the agreement and further specifies that any party is not entitled to anything beyond the same.

Therefore, the complainants, if at all, are only entitled to compensation under clause-6 of the flat buyer's agreement.

The detailed relief claimed by the complainants goes beyond the jurisdiction of this hon'ble authority under the Real Estate [Regulation and Development) Act, 2016 and therefore the present complaint is not maintainable qua the reliefs claimed by the complainants' V. inants' V.

Agreements that were executed prior to implementation of RERA Act and rules shall be binding on the parties and cannot be reopened.

The rules published by the state of Haryana, an explanation is given at the end of the prescribed agreement for sale in annexure A of the rules in which it has been clarified that the developer shall disclose the existing agreement for sale in respect of ongoing project and further that such disclosure shall not affect the validity of such existing agreement Complaint No.

4559 of 2020 Page 10 of 33 ffiHARERA ffiGuRLToRAM executed with its customers.

VI.

The parties had agreed under the flat buyer's agreement to attempt at amicably settling the matter and if the matter is not settled amicably, to refer the matter for arbitration.

Admittedly, the complainants had raised a dispute but did not take any steps to invoke arbitration.

Hence, it is in breach of the flat buyer's agreement between the parties.

The allegations made requires proper adjudication by tendering evidence' cross examination etc. and therefore cannot be adjudicated in summary Proceedings' vll.

The construction activities are ongoing on site at full Swlngandtherespondentendeavourstocomplete construction at the earliest.

The possession was to be delivered within 42 months from the date of sanction of building plans or execution of flat buyer's agreement, whicheverislater,alongwithlB0daysofgraceperiod, subjecttoforcemajeurecircumstancesand circumstances beyond control of the respondent.

The partieshadunderstood,agreed,andacceptedunderthe indicative terms of the application for allotment that possession of the unit was subiect to force majeure and timely compliance of the obligations' VIIL Vide clause G.2 of the application for allotment, which was later reiterated vide clause 6.1 of the flat buyer's agreement, it was duly agreed between the parties that Complaint No. plaint No.

4559 of 2020 Page 11 of 33 HARERA GURUGRAM subject to the conditions mentioned therein, in case the respondent fails to hand over possession within 42 months from the date of sanctioning of the building plans or execution of flat buyer's agreement, whichever is later along with 180 days of grace period, the respondent shall be liable to pay to the complainants compensation calculated @ Rs.5 /- per sq. ft. for every month of delay.

The parties had agreed the penalty, in case of delay in offering possession prior to entering the transaction.

Prior to entering the transaction, the parties had further agreed vide clause 6.1 of the flat buyer's agreement that in case the complainants fails or defaults in making timely payment of any of the instalments, then the complainants would not be eligible for delay compensation.

Thus, the understanding between the parties regarding compensation for delay in offering of possession had been agreed and accepted prior to entering the transaction.

IX.

The proposed timelines for possession have been diluted due to defaults in making timely payment of instalments by various allottees of the project Terra including the complainants herein.

It is well known fact that the projected timelines for possession are based on the cash flow.

It was not in the contemplation of the respondent that the allottees would hugely default in making payments and hence, cause cash flow crunch in Complaint No.

4559 of 2020 Page 12 of 33 ffiHARERA ffiGuRLrcRAl,/ the project.

X.

The construction was affected on account of the NGT order prohibiting construction [structural) activity of any kind in the entire NCR by any person, private or government authority and on account of coronavirus ICOVID 19), construction came to a halt, and it took some time to get the labour mobilized at the site. the site.

With respect to the construction of the tower in which the unit in question is located, work such as structural work, plaster works, MS railing work, IPS flooring work is completed.

The remaining construction work is going at full pace at the site and the respondent is making every endeavour to handover possession of the unit at the earliest.

E.

Written arguments on behalf of complainants i.

If the purchaser has delayed in making payment of any of the instalment, then the purchaser waives his right to seek delay compensation.

It is submitted that such clauses are totally unjust, arbitrary and amount to unfair trade practices as held by the hon'ble NCDRC in the case titled as "Shri Satish Kumar Pandey & Anr. v/s M/s Unitech Limited (05.06.2075)" and also in the judgement of Hon'ble Bombay High Court in "Neelkamal Realtors Subarban Pvt.

Ltd. v/s llnion of India & Ors. (W'P' 2737 of 2077)'.

4559 of 2020 Page 13 of33 HARERA GUl?UGRAM The grievance of the complainants relates to breach of contract, Ialse promises, gross unfair trade practices and deficiencies in the services committed by the respondent regarding the flat allotted to the complainants, bought by them, spending their hard-earned money.

The respondent had failed to deliver the possession of the flat as per the flat buyer's agreement.

Even after a delay of 4 years 2 months B days, the respondent has not issued the complainants, offer of possession.

The respondent has in an unfair manner misused the funds meant for the pioject Park Terra and utilized the same for respondent's own benefit for no cost.

The respondent being builder and developer, whenever in need of funds from bankers or investors ordinarily has to pay heavy interest per annum.

However, in the present scenario, the respondent utilized funds collected from the complainants for company's own good in other projects, being developed by the respondent.

As late as 04.03. as 04.03.2020 it has been held by the Haryana Real Estate Regulatory Authority, Gurugram in a complaint no.

1,070 of 2018 titled "Amit Chaudhry Vs.

Emaar MGF Land Ltd". as under: "The respondent was directed to pay the interest at the prescribed rate for every month of delay on the amount paid by the complainantfrom the date of possession till the offer of possession.

The arrears of interest accrued so far shatl be paid to the complainant within 90 days from the date of this order.

The complainant is directed to pay ii.

4559 of 2020 iii. iv.

V.

Page t4 of 33 ffiHARERA #- eunuennrvr Complaint No.

4559 of 2020 outstanding payments if any, after adiustment of interest for the delayed period.

The respondent shall not charge any amount from the complainant which is not part of the buYer's agreement." vi.

The complainants cannot be expected to endlessly wait for the possession and this principle has been settled by the hon'ble Apex Court in the case of the "Fortune Infrastructure & ors. v/s Trevor D',Lima and ors." and in the present case it is essential that the authority may be pleased to direct the respondent to immediately deliver the possession of the apartment to the complainants along with the necessary and just penalty for delay at prescribed rate of interest.

The complainants are aggrieved by the actions of the respondent for withholding the money for several years and causing immense mental and financial distress' 10.

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 these undisputed documents and submission made by the parties' F. turisdiction of the authoritY 11.

The respondent has raised objection regarding jurisdiction of authority to entertain the present complaint and the said objection stands rejected. rejected.

The authority observed that it has territorial as well as subject matter jurisdiction to adjudicate the present complaint for the reasons given below' Page 15 of 33 13. ffi ffi_ HARERA GURUGRAM Complaint No.

4559 of 2020 F.

I Territorial iurisdiction 12.

As per notification no. \/92/2017-1TCP dated 1.4.12.201,7 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.

In the present case, the project in question is situated within the planning area of Gurugram District, therefore this authority has complete territorial jurisdiction to deal with the present complaint.

F.

II Subiect matter iurisdiction The authority,,,,,,f;".t coTplete ,jurisdiction to decide the complain, ..?e*5ging non-co.g--pliance of obligations by the promote. ,t*hgJdrin.Simmi Sikkg v1,,,,1 tW/s EMAAR MGF Land f,td. (complain} "3.

1 of 2018) leaving aside compensation which is to be dg;i{e.d [V ttre adjudicating officer if pursued by the complainants a!. a later stage.

The said decision of the authority h"-i been, up,,}.rgld by ih.

Haryana Real Estate Appellate Tribunal i1, its iudgement dated 03.1L.2020' in appeal nos.

52 y =q,n of 1...............,018 titled as Emaar MGF Land Ltd, V.

Simmi Sikka oni onr. ' "'''" Findings on the obiections raised by the respondent.

G.

I Obiection regarding untimely payments done by the complainants.

The respondent has contended that the complainants have made defaults in making payments as a result thereof, the respondent had to issue reminder letters dated t9.L2.20t2 G.

L4.

Page 16 of 33 ffiHARERA ffiGuRLToRAM Complaint No.

4559 of Z0Z0 and 22.0L.20L3 and only after the reminders, the complainants came forward to clear the outstanding dues against the demand letter dated 08.1L.2072, accordingly receipt dated 0L,02.2013 was issued by the respondent.

The counsel for the respondent stressed upon clause 7. clause 7.1 of the buyer's agreement wherein it is stated that timely payment of instalment is the essence of the transaction, and the relevant clause is reproduced "7.

TIMELY PAYMENT ESSENCE OF CONTMCT, TERMINATION, CANCELLATION AN D FORFEITU RE' 7.1 The timely payment of each instalment of the Total Sale Consideration i.e.

ClP and other charges as stated herein is the essence of this transaction/Agreement.

In case the Purchaser(s) neglects, omits, ignores, defaults, delays or fails, for any reason whatsoever, to pay in time any of the instalments or other omounts and charges due ond payable by the Purchaserfs,) as per the payment schedule opted or if the Purchaser(s) in any other way fails to perform, comply or observe any of the terms and conditions on his/her part under this Agreement or commits any breach of the undertakings and covenants contained herein, the Seller/Confirming Party may atits sole discretion be entitled to terminate this Agreement forthwith and forfeit the amountof Earnest lt4oney and Non-Refundable Amounts ond other amounts of such nature.," 15.

At the outset it is relbilant to,cbrnment on'the said clause of the agreement i.e.

17.

TIMELY PAYMENT ESSENCE OF CONTRACT.

TERMINATION, CANCELLATI)N AND F)RFEITURE" wherein the payments to be made by the complainants have been subjected to all kinds of terms and conditions.

The drafting of this clause and incorporation of such conditions are not only vague and uncertain but so heavily loaded in favour of the Page 17 of 33 ffiHARERA S- GuRLToRAM promoter and against the allottee that even a single default by the allottee in making timely payment as per the payment plan may result in termination of the said agreement and forfeiture of the earnest money.

Moreover, the authority has observed that despite complainants being in default in making timely payments, the respondent has not exercised his discretion to terminate the buyer's agre€mgnt.

The attention of authority was also drawn towgu,-d$' clause 7. clause 7.2 of the flat buyer's agreement whereby the #ffiiUants shall be liable to pay the outstanding dueg*,,,together , with interest @ LBo/o p.a. compounded guaiterty , or iucfi'' i$her rate as may be mentioned int|He notice fOr the .period of, delay in making payments. tn fqcq, the res,pondent has chalE0d delay payment interest as pdr clduseT.Zof the buyer's agreement and has not terminated the'agrbe ent in terms of clause 7.1 of the buyer's agreement. tn otheg-*ds, the respondent has already charged penalized intdfest from the complainants on account of delay in ma$hgrip6yffie,ntsi as per the payment schedule.

However, aftei p-fig brj'tt[ent,atthe RERA Act, the position has ft '',j ;,]i 1i :: changed.

Sedti'd-it eldd bf .,the,Act provides that the rate of interest chargeable from the allottee by the promoter, in case of default, shall be equal to the rate of interest which the promoter shall be liable to pay the allottee, in case of default.

Therefore, interest on the delay payments from the complainants shall be charged at the prescribed rate i.e., Complaint No.

4559 of 2020 Page 18 of 33 HARERA GU11UGRAM Complaint No.

4559 of 2020 9.300/oby the respondent which is the same as is being granted to the complainants in case of delay possession charges' G.

II obiection regarding iurisdiction of authority w.r't' buyer's agreement executed prior to coming into force of the Act.

1.6.

Another contention of the respondent is that authority is deprived of the jurisdiction to go into the interpretation ol or rights of the parties inter-se in accordance with the apartment buyer's agreement executed between the parties and no agreement for sale as referred to under the provisions of the Act or the said rules has been executed inter se parties' The e Provides, nor can authority is of the view that the Act nowher be so construed, that all previous agreements will be re- written after coming into force of the Act. f the Act.

Therefore, the provisions of the Act, rules and agreement have to be read and interpreted harmoniously.

However, if the Act has provided for dealing with certain specific provisions/situation in a specific/particular manner, then that situation will be dealt with in accordance with the Act and the rules after the date of comingintoforceoftheActandtherules.Numerous provisions ol'the Act save the provisions of the agreements made between the buyers and sellers.

The said contention has been upheld in the landmark judgmen t of Neelkamal Realtors SuburbanPvt,Ltd.Vs,UoIandothers,(W,P2737of2017) which Provides as under: "L1'g.l dertheprovisionsofSectionTB'thedelayinhonding over the possession would be counted from the date mentioned in the agreement for sale entered into by the Page 19 of 33 ffiffiffi @ promoter qnd the allottee prior -to-its registration under RERA.underth,;;o;i;ii*,i[l!,Y:I!!,,If !i3!,2',,i, l?X ,';ii,i;i; :':;;;;ii;d^;?or comptetion or proiect and declarcin'i'^'';';; sectrin 4' The RERA does not contempla""i';'i'ing o7 ,,on'i..o,;t between the flat ,rri,'{,i:':[,::lr'ff '!i,#'i[41q.bovestutedpr.ovisionsor the RERA o'ii no'retrospective in nature' They moy to some extent be having a retroactive or quasi retroactive effect but ih-en on that g'ouia the vatidity -of the provisions "';';; *;' ;' nr,o' i' challeng ed' Th e P arli ament is comp et'eiltilff n"i i"" ifq'i " t' t aw -hav in s r etr o sp e ctiv e orretroac'''iZ"Ji!'i";i;;:4-!:,'Y{::\:#:,i{f ';i discussion' ilta\Q1'$t' tzttv 'tttlt'--- -- h submitted its ' "^ *iit|i''' oih"' i't"t comm ittee' whic t7.

Arso, ,, J;',J;'ii::i;; "f zotstitred asMagic ":::::'::* pvt.

Ltd. vs. rshwer Singh Dahiya,in order dated t7 '12'2019 theHaryanaRealEstateAppellateTribunalhasobserved- "34' Thus' keeping in view- ou''ofol'"''1!^!'":l'"tion' we are of theconsideredoprniJn-tnit111y'::'::'::'"J'::!ff fr or retroactive eyecc' tt tuw vq" vv - it, between the i',;;;;;w"')- ilirut'1o.s '!!:'.1',::1'. '.1',::1'.,',i,i,, do not have any ':::;::\:, /n'"i''ii"o;;i; i:'::': Y' do not have anY 's^.,L+ ;n ^t'r mind thatthe RERA has been f:o\'l'"^l', doubt in our mlng [nuu'L'Ir7 rrprv' "-'- roug'h study yd iiiiri" i,;rtiic interest aftq a 'tho discussionmade'f ii'^i'Uo*^'ju.?,'u,!^tl,'niiir:X'in" the considered optn'utt Lttuv e'Lv r' - ' zration ond will be 'i',o",i )rtlola'tiu.i " :?::'::?::,Zi; entered into even Hence in ffansactiol al.9 $.!'lll tn cttv y'""""' "''--- _- on as per the ;ffif-drtay in the offer/d-eti.very :!!:.rn, for sate the "tri^i ind'conditions of the agreer attdttee slsll p'1"'*ii1r'i" i: ^ ^" :::;:?,:lrii!:!::' 18. alldtt€A: snatt uE' . p':tv"'-leq'iina,., rate of inftrest as ;;f:;i:lii!';o':;:x:;;i;"oiion"'ia'i'''iPi'o'a unreasonable rate 't'yii';iation mentioned in the on "'^''ii io'l ;; ii' tiabt e' to b e i s n or e d "' The agreements "'" sacrosan;;; and except for the provisions which have been abrogated by the Act itself' Further,itisnotedthatthebuilder-buyeragreementshave beenexecutedinthemannerthatthereisnoScopelefttothe Page 20 of 33 WusEBA ffi-, 6UpUGRAM L3o:mplaint No' a55e or 202- ' allotteetonegotiateanyoftheclausescontainedtherein.

Therefore,theauthorityisoftheviewthatthechargespayable undervariousheadsshallbepayableaspertheagreedterms and conditions of the agreement subf ect to the condition that theSameareinaccordancewiththeplans/permissions approved by the respective departments/competent authoritiesandarenotincontravendonofanyotherAct,rules, statutes,instructions,directionsissuedthereunderandare not unreasonable or exorbitant in nature' G.III Obiection regardins 9o1Pluil."1-tt are in breach of agreement for,ton'i"voiation of arbitradon' ' ' '-^-. -aised an oblection for not invoking 19.

The resPondent had r--- arbitratiron proceedings as per the provisions of flat buyer's agreementwhichcontainsprovisionsregardinginitiationof arbitrationproceedingsincaseofbreachofagreement.The following.t"u,.hasbeenincorporatedw.r. oratedw.r.tarbitrationinthe buYer's agreement: "33.

Dispurc Resolution by Arbitrqtiqn Alt or any disputriiffii of or touching upon or rn relation to the t"ii ii this-Agreement including the inftrpretation an'd'"tiiity of tie rcrms thereof and the respective rights"r;;;;;g;trons o7.the Parties shall be s ettt e d a m i c a b ly ii^ "i't d i s cu si i o n fa i I i1 g *'h''''h 1l' same shatl be ""ila'ii'"igh arbi.tration' The arbitration shall be go,"n'i-in-thte Aibitration -and Conciliation Act' 19s6 or any i"";;;;;y omendments/modifications thereto for the ii^''iii'g in force' The arbitration oroceedings shail be hetd. at an approoriate location in New Delhi ay a soie'e''iiiuoto' who shaill be appointed by the lvlanaging o";Z'io' 'itn' Seller and whose decision shall be final and binding upon the Parties' The Purchaser(s) n'i'liy 'ontr'"^t ihat he sholl have no Page2r. of 33 ffiHARERA S- GURUGRAM Complaint No.

4559 of 2020 objection to this appointment of the sole Arbitrator by the Monaging Director of the Seller, even if the person so appointed, as a Sole Arbitrator, is an employee or advocate of the setler / confirming Party or is otherwise connected to the Seller / Confirming Party and the Purchaser(s) confirms that notvvithstanding such relationship / 'connection, the Purchaser(s) shall have no doubts as to the independence or impartiality of the soid sole Arbitrator.

The courts ot New Delhi and Delhi High Court at New Delhi alone shall have the iurisdiction'" 20.

The authority is of the opinion that the jurisdiction of the authority cannot be fetteredlbiy, the existence of an arbitration ,,, ri, , clause in the buyer's ,Si.f.-Ln.ti,I Ut it may be noted that section \ct bars the ifiiisditiion of civil courts about any matter which falla #ithin'ihepurview of this authority, or the Real Estate A[pelUte fiiUunal.

Thus, the intention to render such disputei ri non-". ri non-".bitrable seems to be clear' Also, section BB of the Act &yf that the provisions of this Act shall be in t- addition to andhotin derOgation,ofthe provisions of any other &. law for the time being in, fgd Furtliei, the authority puts reliance on catena ofi"A$*gilt'S Of'tne Hon'ble Supreme Court' particularly in Madhusudhan Seeds CorPoration Limited v, M' Anr. (2012) 2 SCC 506,wherein it has .,q been held thft" the remedies prov.ided under the Consumer Protection Act are in addition to and not in derogation of the other laws in force, consequently the authority would not be bound to refer parties to arbitration even if the agreement between the parties had an arbitration clause' Therefore, by applying same analogy the presence of arbitration clause Page22 of33 HARERA GURUGRAM Complaint No.

4559 of 2020 could not be construed to take away the jurisdiction of the authority.

2t.

Further, in Aftab Singh and ors. v.

Emaar MGF Land Ltd and ors,, consumer case no, 707 of 2075 decided on 73.07.2077, the National Consumer Disputes Redressal Commission, New Delhi (NCDRC) has held that the arbitration clause in agreements between the complainants and builders could not circumscribe the iurisdiction of a consumer.

The relevant paras are reproduced ril{iliffi$i ,,49, Support to the above view is also lent by section 79 of the recentiy' enacted ReaI Estate (Regulation and Development) Act, 2016 (for-short "th,,e,Re'a,!81t!.t: Act'.')' Section 79 of the said Act reads as follows:' @+:*i:=; t'itr't'+ -" " "79.

Bar of iurisdiction ' No civil court shall have iurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no iniunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance o{ ony power conferred by or under this Act. " ""'. . . " ""'. .,' It can thus, be seen that the said provision expressly ousts the jurisdiction of the Civil Court in respect of any matter which the Reol Estate Regulatory Authority, established under Sub- section (1) of Seition 20 or the Adiudicating 1fficer, appointed under Sub-siction (1) of Section 77 or the Real Estate Appellant Tribunal established under section 43 of the Reol Estate Act, is empowered to determine.

Hence, in view of the binding dictum oftheHon'bleSupremeCourtinA'Ayyaswamy(supra)'the matters/dispwtes, which the Authorities under the Real Estate Act are empowered to decide, are non'arbitrable, nodttithstanding an Arbitration Agreement bedtteen the parties to such matters, which, to o large extent, are similar to the disputes falling for resolution under the consumer Act. 'iA.

Conrrquently, we unhesitatingly reiect the arguments on behalf of the Builder and hold that an Arbitration Clause in the Page 23 of33 HARERA ffiGURUOI?AM Complaint No.

4559 of 2020 afore-stated kind of Agreements between the Complainants and the Builder cannot circumscribe the iurisdiction of a consumer Fora, noduithstanding the amendments made to Section I of the Arbitration Act." 22.

While considering the issue of maintainability of a complaint before a consumer forum/commission in the fact of an existing arbitration clause in the builder buyer agreement, the hon'ble supreme court in case titled as M/s Emaar MGF Land Ltd. v.

Aftab singh in revision petition no.

2629-30/2078 in civil appeal no, 23572-23573 ,oI 20.,77 decided on L0J-220L8 has upheld the aforesaid judgement of NCDRC and as provided in Article '1.4t ofthe Congtitution of India, the law declared by the Supreme Cgyrt shall_be bin$ing on all courts within the territory of 1ndia, and accordingly, the authority is bound by the aforesaid view.

The relevant paras are of the judgement passed by the S,lPreme Court is reproduced below: "25. elow: "25.

This court in the series of iudgmenfs as noticed above considered the provisions of Consumer Protection Act, L986 as well as Arbitration Act, 1996 and laid down thot complaint under consumer Protection Act being a special remedy, despite there being an arbitration agreement the proceedings before consumer Forum have to go on ond no error committed by consumer Forum on reiecting the application.

There is reason for not interiecting proceedings under consumer Protection Act on the strength in arbitration agreement by Act, 1996.

The remedy undir Consumer Protection Act is a remedy provided to a consumer when there is a defect in any goods or services.

The complaint means any allegation in writing made by a com'plainant has also been explained in Section 2(c) of the Act' The remedy under the consumer Protection Act is confined to complaint-by consumer as defined under the Act for defect or deficiencies'caused by a service provider, the cheo-p and a quick rimedy has been provided to the consumer which is the object and purpose ofthe Act as noticed above"' Page24 of33 ffiHARERA ffi,eunuGRAM 23.Therefore,inviewoftheaboveiudgementsandconsideringthe provision of the Act' the authority is of the view that complairrantsarewellwithintheirrightstoseekaspecial remedyavailableinabeneficialActsuchastheConsumer ProtectionActandRERAAct,20l,6insteadofgoinginforan arbitration.Hence,wehavenohesitationinholdingthatthis authorityhastherequisitejurisdictiontoentertainthe complaintandthatthedisputedoesnotrequiretobereferred to arbitration necessarilY' Plainants' H.

Findings on the relief sought by the com mPlainants: The comPlainants had Relief sought bY the cot sought following relief(s) : ti)Directtherespondenttohandovertheactualpossession of the residential unit/apartment bearing no.

T-25-1403 in proiect terra located 'rr. cated 'rr.tt:tr 37-D Gurugram' Haryana-alongwithalltherights,titlesandinterests withoutanydelayordefaultintermswiththeflatbuyer,s agreenrent' tii)Directtherespondenttopaythedelayedpossession chargesaSperRERAActinthenameofthecomplainant no.lforthepropertysituatedat.,Terra,,,Sector-37-D, Gurugram,Haryana,tillthedeliveryoftheactual,physical and vacant Possession' 24.Inthepresentcomplaint,thecomplainantsintendtocontinue withtheprojectandareseekingdelaypossessionchargesas Page 25 of 33 HARERA ffiGURUGRAM Complaint No.

4559 of 2020 25. provided under the proviso to section 1B[1) of the Act' Sec.

1B(11 proviso reads as under' "section 78: ' Return of omount and compensation 1B(1).Ifthepromoterfailstocompleteorisunabletogive possession of an apartment', plot, or building, - Provided that where an allottee does not intend to withdraw from the proiect, he shall be paid' by the promoter,interestforeverymonthofdelay'tillthe handing over of the possession, at such rote as may be Clause 5.1 read with clause L.6 of the flat buyer's agreement provides the time period of handing over possession and the same is reproduced below: "Clattse 5.L- The Selter/Confirming Party proposes to offerpossessionoft,heunittothePurchaser(s)withinthe commitment period.

The seller/confirming Pa.rty shall be additionallyentitledtoaGraceperiodoflB0daysafter the expiry of the soid Commitment Period for making offer of possession of the said unit' ClauseL.6"FBA""CommitmentPeriod"shallme7n' subjecttoForcelvlajeurecircumstances;interventionof statutory authoritiis and Purchaser(s) having timely complie-dwithaltirsobligations,formolitiesor documenta'tion, as prescribed/requested by Setler/Confirming Party, under this Ag-reement and not being in'default under any part of th.is Agreement' including but not limited to the timely payment of instqlmints of the sale consideration as per the payment plan opted, Sevelopment Charges (DC)' stamp duty and other Lhoigrr, the ieller/Confirming Party shall offer the posses the possessionofthelJnittothePurchaser(s)withinaperiod of42monthsfromthedateofsanctionofthebuilding plan or ,*rrriio' of Flat Buyers Agreement' whichever is later." Attheinceptionitisrelevanttocommentonthepre-set possession clause of the flat buyer's agreement wherein the 26.

Page26 of33 HARERA GURUGI?AM Complaint No.4559 of 2020 possession has been subjected to innumerous terms and conditions, force majeure circumstances and innumerous terms and conditions.

The drafting of this clause is not only vague but so heavily loaded in favour of the promoter that even a single default by the allottee in fulfilling obligations, formalities and documentations etc. as prescribed by the promoter may make the possession clause irrelevant for the purpose of allottee and the commitment date for handing over possession loses its meaning.

The incorporation of such clause in the buyer's agreement by the promoter is iust to evade the liability towards timely delivery of subject unit and to deprive the allottee of his right accruing after delay in possession' This is just to comment as to how the builder has misused his dominant position and drafted such mischievous clause in the agreement andithe allottee is left with no option but to sign on the dotted lines.

27.

Admissibility of grace period: The promoter has proposed to hand over the possession of the apartment within a period of 42 months from the date of sanction of the building plan or execution of flat buyer's agreement, whichever is later' The flat buyer,s agreement was executed on 24.12,201'2 and the building plan was approved on 2L.09.2012, The flat buyer's agreement being executed later, the due date is calculated from the date of execution of flat buyer's agreement.

The said period of 42 months expires on 24.06.2016.

Further it was provided in the flat buyer's agreement that promoter shall be PageZ7 of33 HARERA GUl?UGRAM Complaint No. plaint No.4559 of 2020 entitled to a grace period of 180 days after the expiry of the said committed period for making offer of possession of the said unit.

In other words, the respondent is claiming this grace period of 180 days for making offer of possession of the said unit.

There is no material evidence on record that the respondent-promoter had completed the said project within this span of 42 months and had started the process of issuing offer of possession after obtaining the occupation certificate' As a matter of fact, the promoter has not offered the possession within the time limit prescribed by the promoter in er's agreement nor has the promoter offered the till date.

As per the settled law one cannot be allowed to take advantage of his own wrong.

Accordingly, this grace period of LB0 days cannot be allowed to the promoter at this stage.

28.

Admissibility of delay possession charges at prescribed rate of interest: The complainants a charges.ProvisotosectionlBprovidesthatwhere an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of possession, at such rate as may be prescribed and it has been prescribed under rule 15 of the rules.

Rule 15 has been reproduced as under: RuleTS,Prescribedrateofinterest-[Provisoto section 72, section 78 and sub-section (4) and subsection (7) of section 791 (1) For the purpose of proviso to section L2; section 78; and sub-sections (4) and (7) of section L9' the Page 28 of 33 ffiHARERA ffi.

GuRUGRAM Complaint No.

4559 of 2020 ;::ff :;?:#:;?;:^:::';:!;i.;,:l'::,!';^,2::?:; rate +20/0,: Provided that in case the State Bank of India marginal cost of lending rate (ltlCLR) is not in use, it shall be replaced by such benchmark lending rates which the State Bank of India may fix from time to time for lending to the general public' 29. ublic' 29.

The legislature in its wisdom in the subordinate legislation under the provision of rule 15 of the rules, has determined the prescribed rate of interest.

The rate of interest so determined by the legislature, is reasonhble and if the said rule is followed to award the interest, it will ensure uniform practice in all the cases.

The Haryana Real Estate Appellate Tribunal in Emaar MGF Land Ltd. vs.

S[, ,observed as under: - :ii: ,,G4.

Takiig,ihe'case from another o-ngle, the allottee was only entitled tit4e delayed fo3sessioh charges/interest only at the rate of Rs 15/' per sq. fr: pu molth- qs per clause 18 of the Buyeis Agrdl,e=ment foy tle per.iod of ** d:l:l: wherels the promoter 'rfias entitled, to interest @ 240/o per Qnnum 'compoundgd,it ine ilme of every succeeding instalme.nt for the deliyed paymenis.

The'functions of the Authority/Tribunal are to safegua-rd the interest of th,e oggrieved person, may be the attoitei or the promoter.

The rights of the parties are to be balanced and must be equitable.

The promoter cannot be allowed titdie undie a,dt)1ntage of.his dominste position and to exploit'th6, neids of the homer buyers.

This Tribunal is duty bound to tak -e into ,cbnsiderotion the legislative intent.i.e,, to protect the i'iier,est of the cons,umers/allottees in the real estate 'sector.

The clauses of the Buyer's Agreement entered into bettueen the parties i* one-sided, unfair and unreasonoble withrespect-tothegrantofinterestfordelayedpossession.

There arevorious otier clauses in the Buyer's Agreementwhich give sweeping powers to the promoter to cancel the allotment "and forfeit tie amount paid.

Thus, the terms and conditions of the'Buyer's Agreement dated 09,05.20L4 are ex-facie one-sided, unfaii and inreasonable, and the some shall constitute the ,iSoi, trade practice on the part of the promoter, These_ types oi discrtminatory terms and conditions of the Buyer's Agreementwill not be final and binding'" Page29 of 33 HARERA ffiGURUGRAM Consequen Consequently, as per website of the State Bank of India i.e., https://sli.Eo.in, the marginal cost of lending rate (in short, MCLR) as on date i.e., 08.04.2021 is 7.300/0.

Accordingly, the prescribed rate of interest will be marginal cost of lending rate +20/o i.e.,9.30o/o.

The definition of term'interest'as defined under section Z(za) of the Act provides that the rate of interest chargeable from the allottee by the promoter, in case of default, shall be equal to the rate of interest which the promoter shall be liable to pay the allottee, in case of default.

The relevant section is reproduced below: "(za)"interest"meanstheratesofinterestpayablebythe promoter or the allottee, as the case may be' Explanation. -For the purpose of this clause- 0 the rate of interest chargeable from the allottee by the prom,oter, in case of default, shall be equal to the'rate of interest which the promoter,shall be tiable to pay the allottee, in case of default' (ii) the inte-reit payable by the promoter to the allottee shall be from the date the promoter receivedtheamountoranypartthereoftillthe date the amount or part thereof and interest thereon is refunded, and the interest payable by theollotteetothepromotershallbefromthedate theallotteedefaultsinpaymenttothepromoter till the dqte it is paid;" 32.

Therefore, interest on the delay payments from the complainants shall be charged at the prescribed rate i'e', 9.30o/o by the respondent/promoter which is the same as is beinggrantedtothecomplainantsinCaSeofdelayed possession charges.

4559 of 2020 30.

31.

Page 30 of 33 ffiHARERA ffiGuRUoRAM Complaint No.

4559 of 2020 33. on consideration of the documents available on record and submissions made by both the parties regarding contravention of provisions of the Act, the authority is satisfied that the respondent is in contravention of the section 11( ) (a) of the Act by not handing over possession by the due date as per the agreement.

By virtue of clause 5.1 read with clause 1. clause 1.6 of the flat buyer's agreement executed between the parties on 24.12.201"2,the possession of the subject apartment was to be delivered within stipulated time i.e., by 24.06.2016.

As far as grace period is concerned, the same is disallowed for the reasons quoted above.

Therefore, the due date of handing over possession is 24.06.2016.

The respondent has failed to handover possession of the subject apartment till date of this order.

Accordingly, it is the failure of the respondent to fulfil its obligations and responsibilities as per the flat buyer's agreement to hand over the possession within the stipulated period.

Accordingly, the non-compliance of the mandate contained in section 11( )(al read with proviso to section 1B(1) of the Act on the part of the respondent is established.

As such the allottee shall be paid, by the promoter, interest for every month of delay from due date of possession i.e., 24.06.201,6 till the handing over of the possession, at prescribed rate i.e., 9.30 o/op.a. as per proviso to section 1B(1) of the Act read with rule 15 of the rules.

Page 31 of 33 34. ffi-GURUGI?AM Directions of Hence, the au following direc compliance of function entrus i.

The resp prescribed from the handing ii.

HARERA The arrea the date r promo date of t shall be the subseq iii.

The compl dues, if complaina possession equitable per annu iv.

The complaina Complaint No.

4559 of 2020 authority rity hereby passes this order and issues the ions under section 37 of the Act to ensure igations cast upon the promoter as per the to the authority under section 3a[fl: to pay interest at the for every month of delay on i.e.

24.06.2016 till the of such interest accrued from 24.06.2016 till order by the authority shall be paid by the rt month as per rule 16[2J of the rules. inants are also directed to pay the outstanding y. tanding y.

Interest on the due payments from the the allottee within a period of 90 days from order and interest for every month of delay by the promoter to the allottee before 1Oth of ts and interest on account of delayed charges to be paid by the respondent shall be ., at the prescribed rate of interest i.e., 9.300/o ent shall not charge anything from the part of the builder buyer agreemen ts which is not Page 32 of 33 ffiHARERA #-GuRUoRAM 35.

Complaint 36.

File be consi (rr* Member Haryana Real Dated: 08.04.2 Complaint No.

4559 of Z0ZO disposed of. to registry.

V.l-.

4--s (Dr.

K.K. xffiaelwat) Chairman Regulatory Authority, Gurugram Page 33 of33 Judgement Uploaded on 27.09.2021