MR SANJEEV BHARDWAJ vs KASHISH DEVELOPERS LIMITED

HARERA M GURUGRAI/ Complaint No.

6815 of 2019 BEFORE THE HARYANA REAL ESTATE REGULATORY AUTHORITY, GURUGMM Complaint no.

6815 of 2019 First date ofhearing: L4.Ol.20ZO Date ofdecision 24.03.2023 ORDER 1.

The present complaint dated 08.0j..2020 has been filed by the complainant/allottee under section 31 of the Real Estate (Regulation and Development) Act, 2016 (in shor! the Act) read with Rule 28 of the Haryana Real Estate (Regulation and Development) Rules, 2017 (in short, the Rules) for violation of section 11(4)(al of the Act wherein it is inter alia prescribed that the promoter shall be responsible for all obligations, responsibilities and functions under Sanieev Bhardwaj Address: - H.no.

1903, Sector-4, Gurugram, Haryana Complainant Office at: - Manor One, Sector-111, Expressway, Gurugram, Haryana-7ZZO17 Also At: 87, Old A.G Colony Kadru, Ranchi Jharkhand-834002 1.

M/s Kashish Developers pvt.

Ltd.

2.

Elite Villas pvt.

3.

Vinman Constructions pvt.

Shri Sanjeev Kumar Arora Member APPEARANCE: Shri Gaurav Rawat fAdvocate On behalf of the respondents On behalfofthe co lainant PaEe I of 17 Versus Respondents CORAM: HARERA g GURUGRAII the provision ofthe Act or the rules and regulations made there under or to the allottee as per the agreement for sale executed inter se.

Unit and proiect related details The particulars of unit details, sale consideration, the amount paid by the complainant, date ofproposed handing over the possession, delay period, if any, have been detailed in the following tabular form: A.

Complaint No.

6815 of 2019 s.

N.

Pardculans ,-di-l Details 1.

Name ofthe project ffi flanor one" situated at Sector- fl11 curgaon.

Nature ofthe project Group Housing Colony Project area l-4.843 acres 110 0f2011 dated 16.12.2011 valid upto 13.12.2019 4.

DTCP license no. and validig status 5.

Name of licen ee M/s Vinman Construction Pvt.

Ltd. and 4 others 6.

RERA Registered/ registered lot 19 d,ated 24.09.201.9 37.L2.2021 Regir Vide I Valid 7.

I Valid 7.

Allotment Letter \I5 HARI 02.07.2013 (page no.

16 of the complaint) L Date of agreeme 15.05.2013 (page no.

19 of complaint) 9.

Unit no.

C2-11tru 11o Floox Tower C2 [page no.

23 ofcomplaint) 10.

Unit area admeasuring 2325 sq. ft. (page no.

23 ofcomplaint) 11.

Due date ofpossession 75.17.2016 (calculated from the date of execution of agreement) Page 2 of 17 tr HARERA GURUGRAM Complaint No.

6815 of 2019 Note: Grace period is allowed being unqualified.

Possession clause HAR GURU 3(a) Possesslon That subrect to terms of this clause and subject to the apartment allottee having complied with all the terms and conditions of this agreement and not being in default under any of provision of this agreement further subject to pliance with all the formalities, of sale deed, on, payment of all and payable to the by the apartment der this agreement, by the Developer, proposes to hand possession of said t within a period of (36) months (excluding riod of 6 months) of execution of t It is however the parties of various Block/Towers comprised in the complex and also the yarious common facilities planned therein shall be ready and completed in phases wise and will be handed over to the of different Blocks/Tower as and when the Page 3 of 17 1,2. ffiHARERA #- eunueml,r B.

Facts of the comp rt 3.

That the compl of Rs 1,86,173l- 4.

That the complaina Complaint No.

6815 of 2019 ent no.

1 for booking ated at sector-111, ,00,000/- was paid t again paid amount and payment schedule nth FIoor, block-C2 lotted.

5.

That the respondents to dupe the complainant in their nefarious net even executed apartment buyer agreement signed between complainant and M/s Kashish Developers Limited, M/s Elite Villas Pvt.

Ltd. & Vinman Constructions pvt.

Ltd. on 1sth May 2013, just to create a false beliefthat the prolect shall be completed in time bound manner and in the garb of this agreement persistently raised demands due to which they were able to extract huge amount of money from the complainant. mplainant. dated 0e.08.20V U w}lich tentatively areafi(e$if i same will be completed and in a phased manner. (Emphasis supplted) Total sale consideration Rs.

7,63,49,425 /- (as per payment plan on page no.

17 ofcomplaint Amount paid by the complainant Rs.

L,72,7 4349 / - [as per page 5 ofcomplaint and 1 Occupation c obtained PaEe 4 of 17 6.

THARERA #-arnuennvr 7.

6815 of 2019 That the total cost of the said flat is Rs 1,63,49,425/- inclusive BSp, EDC IDC, IFMS, PLC, club membership charges & one parking.

The complainant has paid a sum of Rs 1,12,7 4,349 /- inclusive taxes.

That as per clause no.

3 [a) the respondents are in obligation to hand over the vacant physical possession of the said unit before 74.L1.2076 but till date builder has not completed structure and project was abandoned from last 4 years.

8.

That the respondents mise to complete the construction of work of the project time limit, thereby grossly the printed agreement as violating the terms and entered between ndents and has not met their obligatio 9.

That in such ci of the amount Act of 2016. manding the return bed rate as per the C.

Reliefsought by 10.

The complainant has respondents/promoters about the contraventions as alleged to have been committed in relation to section 11(4)(aJ of the Act to plead guilty or not to plead guilty.

Reply by the respondent no.

1.

That the project namely 'Manor One, is a residential township project being developed by the respondent namely Kashish p D. omplainant: 12.

Page 5 of 17 11.

HARERA ffi.GURUGRAM L4.

13.

681S of 2019 Developers Limited and was being financed by DHFL situated at Sector 111 Gurgaon, Haryana.

That the said proiect has all necessary legal approvals including RERA Registration and licences to develop and complete the proiect.

Even the license and statutory fees for the project is paid up in full. p in full.

That the said project is registered under RERA Gurugram vide GGM/364/96/2019I58 dated 24/Og/2079 and the expiry date of the said project is 3l/12IZOZJ.

However, vide order dated 26/05 /2020 issua uy Hnffiam, registration d"a",rr,,n" registered projectr rna"pi$p on was extended for a period of six months and therefore, the e)r e, the expiry date ofthe above-mentionecl project is now 30/06/2022..

That the construction activity ofthe said proiect was going on in full swing.

However, in 201S-16 the construction activity ofthe project started getting disrupted due to adverse market conditions causing mismatch of cash flows.

That there has been a major slump in the real estate sector and several proiects all over Delhi NCR and even parts of the country have been hardly hit.

As a result, conskucrions have stopped and there have been delays of several years in handling over the possession offlats to jts buyers.

That the complainant in the present case is a defaulter and has been defaulting on the payments and has not met the demands as per the payment plan and the demands raised by the respondent_builder.

That the respondent-builder in bona fide and in its sincere efforts to complete the project arranged for additional funds and loans from Dewan Housing Finance Limited (hereinafter referred as,,DHFL,,J. lt 15.

1-6.

77.

18.

PaEe 6 of t7 HARERA S*GUI?UGRAM is submitted that the DHFL (now pIMMAL) also stopped disbursing the sanctioned limitof loan for construction activity due to their own financial trouble which eventually led them under insolvency.

That clause 13 of the agreement states that the developer shall not be held responsible for performing any obligation if such a performance is prevented by force majeure.

That among other reasons, one of the biggest reasons for the delay in the proiect has been tlJ€.,Sfih,tl{,ng customers. customers.

The defaulting customers and their ou amount are above Rs 100 crores and the same has adve the proiect since the said amount would have enabled the developer to complete the project.

That the majority of the flat buyers. including the complainant did not make the full payment against their respective contractual obligations towards the respondent-builder which was a major cause of delay in the construction of the abovementioned project as well as caused serious financial loss to respondent-builder which directly hindered the progress in the construction work thus causing delay in handing over the possession.

That the respondent-builder availed a proiect loan facility from DHFL and NBFC for a sum of Rs 200 crores for a tenure of 72 months.

The said loan facility was availed for the purpose of completing the proiect.

The said finance was required to complete the proiect in addition to the funds to be raised from the customers.

The said loan was extended by the NBFC against the proiect.

That the respondent-builder was finding it difficult to ascertain funds from any other financlal institution and loan balance of DHF-L grew very high as interest was getting accumulated and added at a Complaint No.

6815 of 2019 19.

20.

21_.

22.

25.

Page 7 of 17 ffiHARERA ffi arnuennH,r 24.

26. complaint No.

6815 of 2019 very high rate.

However, to fulfil the commitment towards customers, a restructuring arrangement was worked out with DHFL in which Loan of Rs.725 Cr was sanctioned to the Landowning Companies of the Proiect.

It is pertinent to mention here that even though the said loan facility was sanctioned and approved by the lender, still the complete amount was not disbursed by the lender owing to certain financial difficulties faced by the said lender which ultimately went under insolvenry itseli That after disbursement of loan, total amount of outstanding External Development Charges [EDCJ for the whole proiect i. proiect i.e,, sold area as well as unsold area was payable to Dept. of Town and Country Planning, Government of Haryana.

An amount of Rs.45,63,87,000/- was deposited on 28th March 2018.

Thereafter, the work again gained momentum from funds being disbursed by DHFL.

Suddenly, IL&FS crisis surrounded the NBIrC sector and DHFL which was providing funds for completion of the Project also got into trouble by the month of Sep 2 018.

That the said project thereafter was stuck/ delayed because DHpL who had financed the project was facing proceedings under Insolvency and Bankruptcy Code and moratorium was ordered against DHFL by NCLT, Mumbai in 2019 and further rhe management and control of the company was taken away.

The project had huge amount of undisbursed funds sanctioned from DHFL which further caused grave hardship to the respondent- builder in order to complete the project.

27. lhat subsequently in the year 2019 insolvenry proceedings were initiated against the respondent company also and subsequently a Page 8 of 17 ffiHARERA #* euntlGRAN/ Complaint No.

6815 of 2019 Moratorium was ordered against the respondent company in the month of Novemb er,2019.

28.

That the management of the respondent company was handed over back in late January and the work at the site was started and since the 2nd week of March, 2020 things have been disrupted due to the on-going pandemic.

Due to COVID-19 the respondent has not been able to carry on the work on a regular and continuous basis and the 29. labour right now is not ful e.

The work has been on going at the site intermittently ce the second lock down was cult to get the labour back at even more devastating site in full force.

Be is being carried on since the opening up nd wave and is still being continu That the said will get completed soon and deli sation for delay in handover offlats. r offlats. going on and has ere that the work was tion of lockdown due to 700lo of the project is pany is ready to handover the possession of the flats as soon as the work is completed.

30.

That the said proiect ofthe respondent-builder presently has a total booking of nearly 275 units/ flats/ customers and the large number of these customers are looking to get the possession of their respective units and the same shall be handed over to them upon completion ofthe project which will be done at the earliest.

Page 9 of 17 ffiHARERA #eunuennrrl 33.

That the said fund has competent authority an the project at the customers inclu builder has rec n approva fund itself shows that the proiec{ il mpleted more than 700/o and. is viable soon.

It is also imperative to nd created under the complaint for the E.

I Territorial iurisdiction 35.

As per notific ation no.7 /92 /2017-1TCp dated 14.12.2017 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.

In the present case, the project in question is situated within the planning 31.

52.

6815 of 2019 That more than 70o/o of tJle construction is completed till date and the licenses including the payments made is all done by the respondent-builder with the statutory authorities apart from the fact that 5 towers are already constructed at site by the respondent.

That the respondent-builder had applied for funds from the SWAMIH fund which has been specifically made for projects which are stalled but can be completed and have already been substantially completed. d for the proiect by the endeavoured to complete the interests of the that the respondent- Page 10 of 17 ffiIAREBA HH eunuenRll Complaint No.

6815 of 2019 area of Gurugram District.

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

E.

II Subiect matter iurisdiction 36. iction 36.

Section 11[4) (a) of the Act, 2016 provides rhat the promoter shall be responsible to the allottee as per agreement for sale.

Section 11(41(a) is reproduced as hereunder: Section 11(4)(a) Be responsible for sll obligstions, responsibilities ond functions under the provisions ofthis Act or the rules and regulotions made thereunder or to the all, ffih" ogre"^"it 7or sale, or to the qssociotion o; otlffiiffiare iase moy' bq ti the conveyonce of oll the plots or buildings, as the cose Section 34-Functions of the Authorityr ry be; 34(t ofthe Act providesto ensure compliance of the obligations cast upon the promoters, the allotteesond the reol estate agents under this Act and the rules and regulotions made thereunder.

37.

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 leaving aside compensation which is to be decided by the adjudicating officer if pursued by the complainant at a later stage.

F.

Findings on the obiections raised by the respondent no.

I Obiection regarding untimely payments done by the complainant.

38.

The respondent no. t has contended that the complainant made several defaults in making timely payments as a result thereof, the respondent no.1 cannot complete its project on time.

The authorify is of view that the respondent no.

1 cannot take advantage of this Page 11 of 17 HARERA P*GURUGRAI/ complaint No.

6815 of 2019 objection of timely payments being himself at wrong firstly by still not obtaining the occupation certificate and offering the possession of the unit despite being delay of 6 years, 4 months, 9 days.

Therefore, the respondent no.

1 itself failed to complete its contractual and statutory obligations.

Moreover, there is no document on file to support the contentions of the respondent no.

1 regarding delay in timely payments.

G. yments.

G.

Findings on the relief sought by tlle complainant, Relief sought by the complainant The complainant had sought following relief(sl: i.

Direct the respondents to refund the amount with interest 240/o p.a.

39.

In the present complaint, the complainant intends to withdraw from the project and are seeking return of the amount paid by them in respect of subject unit along with interest as per section 18(1) of the Act and the same is reproduced below for ready reference: " Section 78: - Return of qmount qnd compensation 18(1). lf the promoter fails to complete or is unoble to give possession ofan opartment plot, or building.- (o)in accordonce with the terms oI the agreement for sole or, as the case moy be, duly completed by the dqte specilied therein: or (b)due to discontinuance ofhis business os a developer on account ofsuspension or revocation ofthe registration under this Actor for any other reason, he shqll be liable on demand to the allottees, in cose the allottee wishes to withdrow from the project, without prejudice to any other remedy avqilable, to return the amount received bv him in respect of thot aportment, plot, building, os the cosi may be, with interest qt such rqte as may be prescribed in this behalf including compensation in the manner as provided under this Act: Provided thatwhere on allottee does not intend to withdraw from the project, he shall be poid, by the promoter, interest for every PaEe lZ of 17 40.

HARERA GURUGRAI/ Complaint No.

6815 of 2019 month of delay, till the handing over of the possessio\ at such rote as may be prescribed." (Emphosis supplied) Clause 3(a) of the buyer's agreement handing over possession and the same provides the time period of is reproduced below: "3(a): Possession That subject to terms of this clause and subject to the apartment ollottee hoving complied with all the terms ond conditions of this agreement and not being in default under any olthe provision of this agreementand further subjectto compliance with iance with all the provisions, formalities, registation ofsale deed, documentatiotL payment ofall smount due ond poyoble to the developersbythe apartment ollottee(s) under this ogreement, as prespribed by the Developer, the Developer proposes to hahil: gi"er the possession of said qpartment within a period of ihirty (36) months (excluding a groce period of6 months)Irom the dote ofexecution of this agreement. lt is however understood between the parties thatthe possession ofvarious Block/Towers comprised in the complex ond also the vqrious common focilities plonned therein shall be reody and completed in phaseswise ond will be handed over to the ollottees of different Blocks/Tower os and when the some will be completed ond in a phased manner.

41.

The complainant booked a unit in the project of the respondent's detail above for a total sale consideration of Rs.

1,63,49,425/- and the buyer's agreement was executed between the complainant and respondents on 15.05.2013.

42.

As per the clause 3[a) ofthe buyer's agreement the possession ofthe unit was to be handed over within 36 months from the date of the agreement (excluding the grace period of 6 months].

The due date for handing over ofpossession comes out to be 15.71.201,6.

43.

The occupation certificate/completion certificate of the project where the unit is situated has still not been obtained by the respondents-promoters.

The authority is ofthe view that the allottee cannot be expected to wait endlessly for taking possession of the allotted unit and for which he has paid a considerable amount Page 13 of17 HARERA ffi GURUGRAI/ towards the sale consideration and as observed by Hon,ble Supreme Court of India in Ireo Grace Realtech pvt.

Vs.

Abhishek Khanna & Ors., civil appeal no.

5785 of 2019, decided on L7.01.2027. "..,..The occupation certificate is not avqilable even os on doLe, which cleorly omounts to deficiency ofservice. ofservice.

The ollottees connot be mode to woit indelinitely for possessio, of the apartments allotted to them, nor ian Complaint No.

6815 of 2019 eek refund 9(4) of the i or stipulations has consciously demand os on e promoter building they be bound to toke the apartments in phase 1 of the project.....,." 44.

Further in the iudgemen le Supreme Court of India in the cases ofNewtech pro Developers Private Limited Vs State of U.P. (c ), 357 reirerated in case of M/s Sana er Vs Union of India n L2.05.2022,itwas & others SLP ( o.

13005 of observed as under: "25.

The referred Act is not de thereof.

It a provided this foils to gi within the obligation to refund the amount on demond with interestat the rote prescribed by the State Government including compensation in the manner provided under the Act wiiit the proviso that if the ollouee does not wish to withdraw from the project, he shall be entitled for interest Jor the period of delay till honding over possession ot tie rqte prescribed.,, 45.

The promoter is responsible for all obligations, responsibilities, and functions under the provisions of the Act of 2016, or the rules and Page 14 of 17 HARERA MOURUGRAN/ regulations made thereunder or to the allottee as per agreement for sale under section 11[4)(a) of the Act.

The promoter has fai]ed to complete or unable to give possession ofthe unit in accordance with the terms of agreement for sale or duly completed by the date specified therein.

Accordingly, the promoter is liable to the allottee, as the allottee wishes to withdraw from the proiect, without prejudice to any other remedy available, to return the amount received by him in respect of the unit with interest at such rate as may be prescribed. ffi This is without preiudice to any other remedy available to the allottee including compensation for which allottee may file an application for adjudging compensation with the adjudicating officer undersections 77&T2readwith section 31t1) of the Act of 2016. t of 2016.

Admissibility of refund along wlth prescribed rate of interest: The section 18 ofthe Act read with rule 15 ofthe rules provide that in case the allottee intends to withdraw from the proiect, the respondents shall refund of the amount paid by the allottee in respect of the subject unit with interest at prescribed rate as provided under rule 15 ofthe rules.

Rule 15 has been reproduced as under: "Rule 75.

Prcsc bed rate oI lnterest- lproviso to section 72, sedlon 78 dnd sub-sedion (4) ond subsection (7) of section l9l (1) For the purpose of ptoviso to section 72; section 7g; ond sub-sections (a) ond (7) oI section 19, the "intercst ot the rote prescribed" sholl be the Stote Bonk ol lndio highest morginol cost of lending rote +2%,: Provided thot in cose the Stote Bonk oI lndio morginol cost ol lending rute (MCLR) is not in use, it sholl be reploced by such benchmork lending rotes which the Stote Bonk of tndio moy lixfrcm time to time fot lending to the generol public.,, Complaint No.

6815 of2019 46.

47.

Page 15 of 17 HARERA SM GURUGRAI/ 48.

681S of 2019 The legislature in its wisdom in the subordinate legislation under the provision ofrule 15 ofthe rules, has determined the prescribed rate of interest.

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

Consequently, as per website of the State Bank of India i.e., https://sbi.co.in, the marginal cost of lending rate (in short, MCLRJ as on date i.e., 24.03.2023 is g.T0o/o.

Accordingly, the prescribed rare of interest will be marginal coit,oflending rate +Zolo i. e., 10.7Oo/o.

50.

The authority hereby direits.the lromoter to return the amount received by him i.e., Rs.

1,L2,74,349/_ with interest at the rate of 10. ate of 10.70% (the State Bank of India highest marginal cost of lending rate (MCLR) applicable as on date +2%) as prescribed under rule 15 of the Haryana Real Estare (Regulation and DevelopmentJ Rules, 2 017 from the date of each payment till the actual date of refund of the amount within the timelines provided in rule 16 ofthe Rules ibid.

H.

Directions ofthe authority 51.

Hence, the authority hereby passes this order and issues the following directions under section 37 of the Act to ensure compliance ofobligations cast upon the promoter as per the function entrusted to the authority under section 34(0; i.

The respondents/promoters are directed to refund the entire amount paid by the complainant along with prescribed rate of interest @ 10.70o/o p.a. as prescribed under rule 15 of the Haryana Real Estate (Regulation & Development) Rules, 2017 from the date of each payment till the date of refund of the deposited amount.

49.

Page 16 of l7 HARERA 6* GURUGRAI/ Complaint No.

681S of 2019 ii.

A period of90 days is given to the respondents to comply with the directions given in this order and failing which Iegal consequences would follow 52.

Complaint stands disposed of.

53.

File be consigned to registry.

Haryana Real Estate Datedt 24.O3.2023 HARERA GURUGRAM ev Kumarlrora) w PaEe 17 of 17