MAHESH KUMAR AND MANJU SHRIVASTAVA vs IREO GRACE REALTECH PVT.LTD.

*HARERA #- eunuciuM BEFORE THE HARYANA REAL ESTATE REGUTATORY AUTHORITY, GURUGRAM Complaint No.

485 of 2020 reomptaint no.--a I First date of hearing: I Date ofDecision 485 of 2020 20.02.2020 1, Mahesh Kumar 2.

Maniu Shrivastava Both R/o: 106, Ground Floor, Woodstock FIoor, Nirvana Country, Sector-50, Gurugaon-l.ZZ\l8 Versus M/s Ireo Grace Realtech Private Limited Office at : .

C-4, 1st Floor, Malviya Nagar, New Delhi, South Delhi-110017 I tttemuei APPEARANCE: L$qr!

Dlqllellreryle!!!.etl I Shri M.K Dang fAdvocate) ORDER 1.

The present complaint dated 31.01.2020 has been filed by the complainants/allottees under section 31 of the Real Estate (Regulation and Development) Act, 2016 (in short, the Act) read with rule 28 of the llaryana Real Estate (Regulation and Development) Rules,2017 (in short, the RulesJ for violation of section 11(a)[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 rules = Complainants Respondent CORAM: Shri Viia Page 1 of 15\ *HARERA S- euntlGRAM Complaint No.

485 of 2020 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, ifany, have been detailed in the following tabular form: S.

No.

Heads Information 1.

Project name and location "The Corridors" at s ector 67 A, Gurgaon, Haryana 2.

Licensed area 37.5125 acres 3.

Nature ofthe project Group Housing Colony +.

DTCP license no.

05 0f 2013 dated 27.02.20L3 valid upto 20.02.2021 Licensee M/s Precision Realtors Pvt.

Ltd. and 5 others.

5.

RERA registered/not registered Registered in 3 phases 6.

Unit no.

504, 5th Floor, Tower 83 (Page 32 ofthe complaint] 7.

Unit measuring 7726.69 sq. ft.

69 sq. ft. (Page 32 ofthe complaint) B, Date ofapproval ofbuilding plan 23.07.20L3 (annexure R-10 on page no.60 of reptyJ 9.

Date ofallotment 07.08.2013 (page no.

19 of complaint) 10.

Date of environment clearance 07 .08.2013 (page no.

19 ofcomplaint) 11.

Date of execution of builder buyer's agreement 37.07.2074 (as stated by complainants) (Copy of executed BBA has been Page 2 of 15 HARERA P*GURUGRAI/ B.

Facts ofthe complaint The complainants have submitted as under: 3.

That the complainants made an application in the project of respondent and paid a booking amount of Rs.

16,50,000/- after which allotment letter was issued by the respondent.

4.

That the complainants therefore had made a payment of Rs.

33,46,486/_ to the respondent without being in receipt of the buyer,s agreement.

After the payment of such amount, they issued the offer of allotment of residential apartment containing such conditions which did not allow any freedom to the complainants to make any amendment.

Complaint No.

485 of 2020 the the annexed but date is not mentioned) Date of cancellation letter 17.11.201+ (annexure R-13 on page no.71 o reply) Total consideration Rs.

1,73,06,088/- (As per payment pl an on page 22 of complaint) Total amount paid by the complainants Rs.33,46,486/- (As per cancellation letter on page no.

71 of reply) Due date ofdelivery ofpossession 23.01.20L7 (calculated from the date of approval of building plans) Note: Grace Period is not allowed.

Occupation certificate 31.05.2019 (Page 76 of reply) Offer ofpossession Not offered as already cancelled Page 3 of 15 HARERA MGURUGRAM 7.

6.

485 of 2020 5.

That the complainants thereafter signed the dotted lines of the agreement on 37.07.2014 or else they would forfeit the entire amount paid by them.

That such unilateral agreements have already been held to be illegal and arbitrary and inapplicable while deciding the compensation fbr the allottees by several courts. al courts.

The complainants were lay men and had no idea that the respondent company would indulge in such illegal malpractices.

That while in case of the complainants making the delay in payment of the instalments the respondent company was entitled to charge interest @ 200/o p.a. but they were only entitled to meagre amount of Rs.

7.50/_ per sq. ft. of the super area for every month of delay until the actual date fixed by the company for offering possession.

That the complainants observed that the construction on the site was not going according to the proposed construction and payment plan.

The health condition of the complainant no.

1 was also deteriorating who was going through severe medical problems.

The complainant no.

1 during the intervening period had suffered a heart attack.

He was also a patient of diabetes also lost his job from the Ranbaxy (where he was director) due to the acquisition of the same by the Sun pharma.

His financiar and medical conditions were forcing him to seek extension of time for payments from the respondent.

That neither the respondent accepted the request of the complainants, nor did ever reply to the queries of the complainants for the extension of time for payment.

They continuously issued the demand letters upon complainants for payment.

That the complainants made several requests to the respondent citing their medical and financial problems, but they cancelled the allotment of B, 9.

10. /^.

Page 4 of 15 ffiHARERA #-ounuennr,rr the unit vide letter dated 17.-17.2074.

Thus, they deeply aggrieved by the action ofthe respondent ofcancelling the allotment.

That the respondent company not only cancelled the allotment of the complainants but also forfeited the entire amount paid by them.

The respondent forfeited 20% of the sale consideration but also charged delay penalty interest and service tax on forfeiture.

That the respondent company no conducted itself in fair and transparent manner. nt manner.

The deductions made by them at time of forfeiture were not transparent in any sense.

Reliefsought by the complainants: 13.

The complainants have sought following relief(sJ: 15. (i) Direct the respondent to refund the money paid by the complainants till date i.e., Rs.

33,46,486/- along with prescribed rate of interest fiom the date ofpayment till realisation ofthe amount.

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

Reply by the respondent.

The respondent has contested the complaint on the following grounds: _ That the complaint is neither maintainabre nor tenabre and is liable to be out-rightly dismissed.

The allotment of the unit allotted to the complainants was terminated prior to the enactment of the Real Estate (Regulation and Development) Act, 2016 and the provisions laid down in the said Act cannot be applied retrospectively.

That there is no cause of action to file the present complaint.

48S of202O 71.

L2.

C, 74.

D. /L.-,; Page 5 of 15 ffiHARERA S- eunuennH,r Complaint No.

4BS of 2020 17.

That the complainants have no locus standi to file the present complaint.

18.

That the present complaint is barred by limitation.

19.

That the complainants are estopped from filing the present complaint by their own acts, conducts, omissions, admissions, acquiescence and laches.

20.

That this Hon'ble Authority does not have the iurisdiction to trv and decide the present complaint.

21.

That the complaint is not maintainable for the reason that the agreement contains an arbitration clause which refers to the dispute resolution mechanism to be adopted by the parties in the event of any dispute i.e., clause 35 of apartment buyers agreement.

22. ement.

22.

That the complainants have not approached this authority with clean hands and have intentionally suppressed and concealed the material facts in the complaint.

The present complaint has been filed by them maliciously with an ulterior motive and it is nothing but a sheer abuse of the process of law.

The true and correct facts are as follows; 23.

That complainants, after checking the veracity of the proiect namely, ,The Corridors', Sector 67-4, Gurgaon had applied for allotment of an apartment vide their booking application form dated 2 2.03.2013.

24.

That based on the application for booking, the respondent vide its letter dated 07.08.2013 allotted to complainants apartment no.

CD_B3_05-504 having tentative super area of 1726.6g sq. ft. for a total sale consideration of Rs.

1,73,06,088.42.

25.

That the respondent had sent the copies of the apartment buyer,s agreement to the complainants vide its retter dated 21.03.201,4.

However, the same was executed between the parties on 31,.07.2014 only after issuance of reminders dated 2g.O5.ZO.L4 and 17 .07 .ZCJ.4 by respondent.

Page 6 of 15 lARElA P*GURUGRAI/ That the respondent raised payment demands from the complainants in accordance with the agreed terms and conditions of the alrotment as well as of the payment plan and they made some payments in time and then started delaying and committing defaults.

The respondent had raised the third instalment demand on Ig.03.2074 for the net payable amount of Rs.

19'96'928/-.

However, they faired to do so despite issuance of reminders dated 13.04.2014,04.05.2014 and final norice dated 29.08.2074.

That timely payment of installments within the agreed time schedule was the essence of allotment.

The complainants are real estate investor who had booked the unit in question with a view to earn quick profit in a short period. rt period.

However, their calculations went wrong on account of slump in the real estate market, and they were not possessed with sufficient funds to honour commitments.

The complainants were never ready and willing to abide by contractual obligations.

That as per clause 13.3 of the apartment buyers agreement and clause 43 of schedule- I of the booking application form, the respondent was to offer the possession to the complainants within a period of 42 months + 1g0 days grace period from the date of approval of the Building plans and/or fulfilment of the preconditions imposed thereunder.

Furthermore, complainants had undertaken in clause 44 of schedule_ I of the booking application form for an extended deray period of 12 months from the date of expiry of the grace period.

From the aforesaid terms of the booking application form, it is evident that the time was to be computed from the date of receipt of all requisite approvals.

Even otherwise construction can't be raised in the absence ofthe necessary approvals.

It is pertinent to mention here that it has been specified in sub_ clause (ivJ of clause 17 of the memo of approval of building plan dated 23.07 .ZOl3 of the said proiect Complaint No.

48S of 2020 26.

27.

28.

Page 7 of 15 HARERA P*GUI?UGRAII that the clearance issued by the Ministry of Environment and Forest, Government of India has to be obtained before starting the construction of the prorect.

It is submitted that the environment clearance for construction of the said project was granted on 72.12.2013.

Furthermore, in clause 39 of part-A of the environment clearance dated L2.12.2073 it was stated that fire safety plan duly was to be duly approved by the fire department before the start of any construction work at site.

The fire scheme approval was granted on 22.LL.2014 and the time period for offering the possession, according to the agreed terms of the booking application form, would have expired onty on 22.71,.2019.

There could not be any delay till 27. y till 27.71.2019.

29.

That on account of non-fulfilment of the contractual obligations by complainants and despite several opportunities extended by the respondent, their allotment of the unit was cancelled, and the earnest money was forfeited vide cancellation letter dated 17.11.2014 in accordance with clause Z1 read with clause 21.3 of the apartment buyer,s agreement.

The respondent has applied for the grant of occupation certificate vide application dated 06.07.2017 and the occupation certificate was granted on 31.05.2019.

30.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.

E.

Jurisdiction ofthe authority 31..

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

The Complaint No, 485 of 2020 Page B of 15 HARERA MGURUGRAN/ authority has complete territorial and subiect matter iurisdiction to ad.iudlcate the present complaint for the reasons given below: E. l Territorial rurisdiction 32 As per notification no.

L/92/2077-7TCp dated 1,4.1,2.2017 issued bv Town and Country planning Department, the jurisdiction of Real Estate Regulatory Authority, Gurugram shall be entire Gurugram District for a[ 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 .iurisdiction to deal with the present complaint.

II Subject matter iurisdiction 33.section 11(4)[a] of the Act, 2016 provides that the promoter shalr be responsible to the allottee as per agreement for sale.

Section 11[4)(aJ is reproduced as hereunder: Section 11(4)(a) Be responsible lor all obligations, responsibilities ond functions under the provisions of this Act or the rules ond regutation, iidi ii"re iidi ii"rerrae, or__to the allottees as per the ogreement for ;ole, or to the associotion of allottees, os the case may be, till the conveyorie ol o inl-oportm"rx, plots or buildings, as the case moy be, to ihe a o*ees, o,r rli" ro.ron areqs to the association of dllottees or the competent authonLy, as the case moy be; Section 34-Functions of the Authority: 344 ol the Act provides rc ensure compliance of the obligottons cost upon the promoters, the allottees ond the reat eslote ogenis inder this Act and the rules and regulations mode thereunder.

34.

So, in view of the provisions of the Act quoteJ 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 Complaint No.

485 of2020 Page 9 of 15 HARERA *.GURUGRAI,/ decided by the adjudicating officer if pursued by the complainants at a later Complaint No.

485 of2020 stage.

35.

Further, the authority has no hitch in proceeding with the complaint and to grant a relief of refund in the present matter in view of the judgement passed by the Hon'ble Apex Court in Newtech promoters and Developers Private Limited Vs State of ll.p, and Ors.,, SCC Online SC 1044 decided on 1,1,.1,7.2027 wherein it has been laid down as under: "86.

From the scheme of the Act of which o detoiled reletence hos been mode ond toking note oJ powet of odjudicotion delineoted with the regulotory outhority ond odjudicoting officer, whot linolly culls out is thot olthough the Act indicotes the distinct exprcssions like .ret'und,, .interest,, 'pehalty' ond 'cofipensotion,, o conjoint reodinq of Sections 18 dnd 19 cleorly nonifests thot when it comes to refund of the omount, ond intercst on the rclund omount, or dirccting poyment ol interest t'or deloyed delivery oJ possession, or penolty ond interest thereon, it is the regulotory outhority which hos the power to exomine ond detetmine the outcome of o complaint. complaint.

At the some time, when it comes to o question of seeking the relief of odjudging compensotion ond interest thereon undet Sections 12, 14, 18 ond 19, the odjudicoting ollicer exclusively hos the powet to determine, keeping in view the collective reoding of Section 77 rcod with Section 72 of the Act. if the odjudicotion under Sections 12, 14, 18 ond 19 othet thon compensotion os envisoged, if extended to the odjudicoting oJficer os proyed thot, in our view, fioy intend to expond the ombit ond scope of the powers ond functions of the odjudicoting olt'icer under Section 71 ond thot would be ogoinst the mondote of the Act 2016.,, F.

Findings on the obiections raised by tlle respondent.

F.l Obiection regarding complainants are in breach of agreement for non-invocation of arbitration 36.

The respondent submitted that the complaint is not maintainable for the reason that the buyer's agreement contains an arbitration clause which refers to the dispute resolution mechanism to be adopted by the parties in the event of any dispute and the same is reproduced below for the ready reference: "35.

Dispute Resolution by Arbitration Page 10 ol 15 HARERA gP* GURUGRAI/ "Allor ony disputes arising out or touching upon in relotion to the terms ofthis Agreement or its terminotion including the interpretotion and validiqt of the terms thereofand the respec ve rights and obtigotions of the parties shqll be settred amicobly by mutuqr discussions fairing which the some shott be settred through reference to a sole Arbitrator to be appointed by o resotution of the Board of Directors of the Company, whose decision shall be finol and binding upon the parties.

The allottee hereby confirms that it sholl hove no objection to the appointment of such sole Arbitrator even if the person so appointed, is an employee or Advocote of the Compony or is othetwise connected to the company and the Arottee hereby accepts qnd ogrees that this arone sho, not constitute a ground for challenge to the indep the independence or impartiality of the said sole Arbitrator to conduct the arbitrotion.

The orbitrotion proceedings sholl be governed by the Arbitrqtion and Conciliotion Act, 1996 or any statutory amendments/ modifications thereto and sho be held at the Company's offces or at q location designoted by the said sole Arbitrqtor in Gurgoon.

The languoge ofthe arbitration proceedings and the Aword shall be in English.

The compqny qnd the ollottee will share the fees of the Arbitrator in equol proportion',.

37.

The authority is ofthe opinion that the jurisdiction ofthe authority cannot be fettered by the existence of an arbitration clause in the application form as it may be noted that section 79 of the Act bars the jurisdiction of civil courts about any matter which falls within the purview of this authority, or the Real Estale Appellate Tribunal.

Thus, the intention to render such disputes as non-arbitrable seems to be clear.

Also, section gg of the Act says that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.

Further, the authority puts reliance on catena of judgments of the Hon,ble Supreme Court, particularly in Nationol Seeds Corporation Limited v.

M.

Madhusudhan Reddy & Anr. (2012) Z SCC 506, wherein it has been held that the remedies provided under the consumer protection Act are in addition to and not in derogation of the other laws in force, consequently A the authority would not be bound to refer parties to arbitration even ifthe I fu ^gr""^"nt between the parties had an arbitration clause, Complaint No.

485 of 2020 Page 11 of 15 39.

SHARERA flhounGnnr,rr 38.

Therefore, in view ofthe above judgements and considering the provisions of the Act, the authority is of the view that complainants are well within right to seek a speciar remedy availabre in a beneficial Act such as the Consumer protection Act and RERA Act, 2016 instead of going in for an arbitration. bitration.

Hence, we have no hesitation in holding that this authority has the requisite jurisdiction to entertain the complaint and that the dispute does not require to be referred to arbitration necessarily.

In the light of the above-mentioned reasons, the authority is of the view that the objection of the respondent stands rejected.

F.ll Obiection regarding ,urisdiction of the complaint w.r.t the apartm_ent buyer,s agreement executed prior to coming into force ofthe Act.

The respondent submitted that the complaint is neither maintainable nor tenable and is liable to be outrightly dismissed as the buyer,s agreement was executed between the complainants and the respondent prior to the enactment of the Act and the provision of the said Act cannot be applied retrospectively.

The authority is of the view that the provisions of the Act are quasi retroactive to some extent in operation and will be applicable to the agreements for sale entered into even prior to coming into operation of the Act where the transaction are still in the process of completion.

The Act nowhere provides, nor can be so construed, that all previous agreements would be re-written after coming into force of 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 would be dealt with in accordance with the Act and the rules after the date of coming into force of the Act and the rules.

40.

Page 12 of 15 HARERA GURUGRAM The numerous provisions of the Act save the provisions of the agreements made betlveen the buyers and sellers.

41.

Further, in appeal no.

L73 of ZO],g titled as Magic Eye Devetoper pvL Ltd. vs' Ishwer singh Dahiya, in order dated 1,7.1-2.2079 the Haryana Real Estate Appellate Tribunal has observed_ "34. rved_ "34.

Thus, keeping in view our oforesoid discussion, we are of the considered :1,::,, :h:: ^:l:. !:ov isiois..of the ect o,e q uos i-,itl,ii,ri, i"*iii:,, ":,::::,,:!^"::.:::: :,a ,n L" ,p,ii,,iri i" rii 'i,"","tri,-ri?li '!'!':'t::' I::!tu:!" t,,. ,!,i2il!":,f^:J,::,::,of^po,ssesston.ai per tne rc,ms ona conaitionl ii tie ogreemen( Ior sale the olottee sholt he eri,iii ,"""r,i"',i,'"ri'riii!lr|,2i possession chorges on the reasonable r t -s o f t h e * ti r - r ri i ", " "'r", a li -, :;i :' ;:';' ;;: r:: :; : :'f, :, ::,:, : f i;f:il::""' menLioned in the osreement ror sarp ts tiobte to iL 42.

The agreements are sacros h ave b een a b ro gated r,,, "T: ;ffi T:ff:T I i::T::;:ilH buyer agreements have been executed in the manner that there is no scope left to the alrottee to negotiate any of the clauses contained therein.

Therefore, the authority is of the view that the charges payable under various heads shalr be payabre as per the agreed terms and conditions of the agreement subiect to the condition that the same are in accordance with the plans/permissions approved by the respective departments/competent authorities and are not in contravention of any other Act, rures and regulations made thereunder and are not unreasonable or exorbitant in nature.

Hence, in the light of above_ mentioned reasons, the contention of the respondent w.r.t. .iurisdiction stands re.iected. c.

Findings regarding reliefsought by the complainants.

Page 13 of 15 HARERA Complaint No.

485 of 2020 gP* GURUGRAM (i) Direct the respondent to refund the money paid by the complainants till date i.e., Rs.33,46,4g6/_ along with prescribed rate of interest from the date of payment till realisation of the amount.

43.

The complainants-allottees booked a residential apartment in the project of the respondent named as ,,Corridors,, situated at sector 67-A, Gurgaon, Haryana for a total sale consideration of Rs.

1,73,06,0gg/_.

The allotment of the unit was made on 07.0g.201,3.

Thereafter on 37.02 . on 37.02 .2014 the builder buyer agreement was executed between the parties.

44.

As per the payment plan the respondent started raising payments from the complainants but they defaulted to make the payments.

The complainants- allottees in total has made a payment of Rs.33,46,4g6/_.

The respondent vide letter dated 1g.03.2014 raised the demand towards third instalment and due to non-payment from the comprainants it sent reminders on 13.04.2074 and 04.05.2014 and final notice on Zg.Og.2}1,4.l._urther due to non-payment respondent cancelled the allotment of the unit of complainants on -1.7.1!.2074.

The occupation certificate of the tower where the allotted unit is situated has been received on 31.05.2 019.

The respondent-builder took a plea that after the cancellation of allotted unit on 17.11.2014, the complainants filed the present complaint on 37.01.2020 i.e., after more than 5 years and thus, is barred by the limitation.

The authority observes that the case of the complainants is not against the cancellation letter issued way back as on 17.11.2014 as the same cannot be agitated as complaint was filed after more than 5 years well beyond the limitation period.

But the promoter was required to refund the balance amount as per applicable cancellation clause of the buyer's agreement.

45.

Page 14 of15 HARERA Haryana Real Estate Regulatory Authority, Gurugram Dated: 20.04.2023 M,GURUGRAI/ 46.

The cancellation of the unit was held before the Act was in force.

So, the deduction should be made as per the relevant clause of the buyer,s agreement.

Clause 6 of earnest money is reproduced hereunder: The Company and the Allottee hereby ogree that 200/0 of the Sale consideration of the Apqrtment shqll be deemed to constitute the Earnest MonE/," 47.

Keeping in view the above-mentioned facts the promoter was to return the paid-up amount after retaining ZOo/o of the sale consideration and that amount should have been paid on the date of cancellation itself. on itself.

However, in the present matter the complainants have paid only Rs.33,46,486/- against the total sale consideration of Rs.

1,73,06,0g8/_ which is less than 2Oo/o.

The authority is of the view that deductions of earnest money has been made as per builder buyer agreement and the complaint is barred by limitation and hence, no case for refund of any amount is made out.

48.

Complaint stands disposed of.

49.

File be consigned to the registry.

Complaint No, 485 of 2020 \.t- +-2 (viiay Kurfi/ar coyal) Member Page 15 of 15