BAL KISHAN GUPTA AND RITU GUPTA vs RAHEJA DEVELOPERS LIMITED

HARERA ffiGURUGRAM BEFORE THE HARYANA REAL ESTATE REGULATORY AUTHORITY, GURUGRAM ORDE.R, 1.

This complaint has been filed by the complainant/allottees under section 31 of the Real Estate [Regulation and DevelopmentJ Act, 2016 (in short, the Actl read with rule 28 of the Haryana Real Estate fRegulation and Development] Rules,2017 (in short, the Rules) for violation of section 11(a) [aJ of the Act wherein it is ln ter alia prescribed that the promoter shall be responsible for all obligations, responsibilities and functions under the provisions of the Act or the * 1.

Mr.

Bal Kishan Gupta 2.

Mrs.

Ritu Gupta Both RR/o: - B-4, Satyawati III, New Delhi- 110052 CORAM: Shri Ashok Sangwan APPEARANCE: Sh.

Venket Rao [Advocate) Sh.

Garvit Gupta (Advocatel Complaint No.

5511 of 2022 Complaintno. t 5511^ of ZO22 Date of liling of complaint: Oa.OA.Z|ZZ Ordre reserved on; 1O.03.2023 Order pronounced on: 23,05.2023 Complainants Respondent Member Complainants Respondent M/s Raheja Developers Limited.

Regd.

Office at: W4D, 204/5, Keshav Kunj, Western Avenue, Sainil< Farms, New Delhi- 110062 Page l of 27 HARERA P* GURUGI?AI/ Complaint No.

5511 of 2022 Rules and regulations made thereunder or to the allottees as per the agreement for sale executed infer se.

A.

Unit and project 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 following tabular form: S.No.

Heads Information 1.

Pro.iect name and locati "Raheja's Atharva", Sector 109, Gurugram 2.

Project area ltl L4.81-2 acres 3.

Nature of the project 'R6sidential Group Housing Colony 4.

D'I-CP license no, and validity status 257 0f 2007 dated 07.11.2007 valid up to 06.11.2017 Name of [icensee I Brisk Construction Pvt. ltd and 3 others 6.

RERA Registered/ not registered Registered vide no.

90 of 2017 dated 28.08.201.7 7.

RERA registration valid up to 27.02. to 27.02.2023 5 Years from the date of revised Environment Clearance Unit no.

IF16 - 01, ground floor, block/tower- IF 16 lPage no.

42 of the complaintl 9.

Unit measuring 2152.640 sq. ft. [Page no.

42 ofthe complaint] 10.

Date of allotment letter N.A 11.

Date of execution of flat buyer agreement t2.02.2070 [Page no.

39 of the complaint] PaBe 2 of 27 HARERA GURUGRAN1 |coiplri,r, II".5511 ,f ,0rr-l L2.

Possession clause +.2 Possession Time and Compensation Thot the compony shall endeovor to give possession of the apartments to the qllottee(s) within thirty-six (36) months in case of tower and thi@ (30) months in case oI 'lndependent Floor' from the dote of the execution of the Agreement to sell ond ofter providing of necessary infroslructure in the sector by the Government, but subject to force majeure conditions or any Government/ Regulatory o uthority's action, inqction or omission ond reasons beyond the conLrol of the compony.

The company on obtoininq certilicote for occupat[on and use by the Competenl Authorities sholl hond over the Unit to the Purchoser for this occupation and use ond subject to lhe Purchaser having complied with oll the terms and conditions of Lhis application form & Agreement To sell. ln the event of his failure to take over and /or occupy ond use the unil provisionally and/or finally ollotted within 30 days from the dote ol intimotion in writing by the seller, then the same sholl lie at his/her risk and cost and lhe Purchaser shall be lioble to compensolion @ Rs.7/- per sq. [t. of the super areo per month os holding charges for the entire period of such de I ay........... " Page 3 of 27 HARERA P*GURUORANI Complaint No, 5511 of 2022 B.

3.

Facts ofthe complaint The complainants have made the fotlowing submissions in the complaint: - I.

That in the year 2009, the complainants came to know about project through marketing representative of the respondent. espondent.

Acting on the tall claims and assurances provided by him on behalf of it, they booked an Independent Floor in the aforesaid project believing that the respondent had obtained all approvals /permissions necessary for construction of the project.

13.

Due date of possession 12.oa.20t2 [Note: 30 months form the date of agreement to sell i.e., 1,2.02.20 701 t4.

Payment plan Installment Payment Plan [as per payment plan at page no.

64 of the complaintl 15.

Basic sale consideration as per BBA at page no.64 of the complaint Rs.93,1,6,633 /- 76.

Total amount paid by the complainants Rs.B8,3 6,975l- (As pleaded by the complainants at page 13 of the complaint) 77.

0ccupation certificate /Completion certificate Not received 18.

Offer of possession Not offered L9.

Delay in handing over possession till date ofthis order i.e., 23.05,2023 10 years 9 months and 1L days Page 4 of 27 HARERA GURUGRA[/ Complaint No.

5511 of 2022 II.

That the respondent through its marketing representative claimed to be a renowned developer in the real estate sector and invited the complainants to book Independent Floor in the said project.

It was assured that the instant project is one of the finest and is free from all kinds of encumbrances.

Further, it also claimed that construction of the project was in full swing and promised to deliver the possession of the said unit as per the projected date.

Thereafter, believing i:pon 3qc. ! 'assurances and commitments, they, agreed to purchase the',iiiiependent Floor bearing no.

IF 16- 01, ground floor, admeasiirin gto 2752.64 sq. ft. along with court/ terrace area of 1485.75 iq. ft. for a total sale consideration of Rs.93,16,633.7 t /- and paid an advance booking amount of Rs.7 ,8L,920 /- for further registration.

That the complainants opted for a construction linked plan and the respective instalments were to be raised only upon achieving the proposed milestone.

The respondent at times failed to achieve the milestone for the pro. r the pro.lect in question but being aware of the same, they continued to pay the instalment as and when demanded by it.

The respondent failed to offer possession within proposed time.

That the respondent vide allotment letter dated 08.01.2010, provisionally allotted an independent floor, in the aforesaid project.

Thereafter, on 72.02.2070, a flat buyer's agreement was executed between the parties for the above-mentioned floor.

The respondent was required to deliver the possession of the unit III.

IV, Page 5 of 27 jy HARERA ffi, GURUGRAM VII.

VI. within 30 months from the date ofexecution ofthe agreement.

But it failed to offer the said unit even after the delay of almost 10 (Tenl years.

V.

That in accordance with clause 4.2 ofthe agreement so signed and acknowledged, the respondent proposed to provide possession on or before 12.0a.2012.

But it was utter shock for the complainants on knowing that even on the due date as proposed by it the construction was not even completed.

Despite, paying more than half of the total sale consideration, the respondent has not only violated the terms of the agreement but has also failed to give the possession as on date.

That believing upon the assurances and false promises made by it, they paid a total amount of Rs.88,36,975/- towards the agreed sale consideration of Rs.

93,16,633.71/-.

The complainants have also obtained a housing loan from the Federal Bank to the tune of Rs.40,26,770/- in order to pay the instalments as and when demanded by it for the said floor in the project.

They have been paying EMI's of Rs.95,247 /- every month for the said loan.

That as per the agreement, the possession was proposed to be given by 22.10.2072.

But, to the utter shock of the complainants the construction was not even completed even after the lapse of due date of possession.

Despite making almost entire sale consideration, the respondent has not only violated the terms of the agreement but has also failed to give the possession as on date. s on date.

Complaint No.

5511 of 2022 Page 6 of 27 HARERA ffi,GUI?UGRAI/ XII.

5511 of 2022 VIII.

That as per the commitment made at the time of booking and agreed under the agreement payment plan table, 5olo of basic sale price timely payment incentive was assured to be provided by it.

It is an evident fact that the respondent as on date has not paid any sort of incentive or rebate despite after receiving the instalment amount as and when demanded.

IX.

That they have already paid the amount ofclub membership and car parking apartment and:0f!e1 necessary charges as and when demanded by its way back in the years 2012 and 2 013.

However, x. till date, the respondent has failed to provide any ofthose facilities.

That the respondent has not provided the complainants with any interest on delay in handing over the possession of the unit and thus violated the provision ofsection 18 ofthe Act, 2016.

That the terms and the conditions provided under the agreement are one-sided, unfair, and arbitrary in nature and were drafted merely to protect the interest of the respondent.

On account of delay in payment the respondent, it is liable for delay charges and the rights provided to the respondent for default of others are not placed on an equal platform with the rights of the complainants.

That the respondent is a habitual defaulter and has defaulted in his various other projects by not delivering the possession of the unit in time.

It is tactics of the respondent to cheat and dupe the innocent and gullible buyers by diverting the money collected from them for its own use or benefits. xt.

Page 7 of 27 C.

4. ffiIAREBA ffi, euRuenRvr XIII, 5.

5511 of 2022 D.

6.

That the respondent had utterly failed to fulfil his obligations to deliver the possession in time or refund the money along with the interest and caused mental agony, harassment, and huge loss to the complainants.

Hence the present complaint. complaint.

Reliefsought by the complainant: The complainant has sought following relief(s).

I.

Direct the respondent to handover the actual physical possession of the unit of the complglriqnts. immediately along with all the amenities as promised underrthe agreement.

II.

Direct the respondent to pay the prescribed rate of interest on the amount paid i.e., Rs.8836,975 /- for delay in handing over of possession from the due date ofpossession i.e.,20.08.2012 till the date of actual handing over of possession.

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(4J (aJ of t]1e Act to plead guilty or not to plead guilty.

Reply by the respondent.

The respondent contested the complaint on the following grounds: - aJ That the complaint filed by the complainants is neither maintainable nor tenable and is liable to be out-rightly dismissed.

The present complaint has been filed without any locus standi, cause of action against the respondent and rather by divulging incorrect facts.

There was no ground at all to have filed the present baseless, false and frivolous complaint.

The respondent has registered the project Page B of 27 /\, ffiHARERA #"eTuerw Complaint No.

5511 of 2022 with the authority under the provisions of the Act of 2016, vide registration no.

90 of20u dated 29.09.2017. b) 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 ofany dispute i.e., clause 15.2 ofthe agreement. cJ That the complaint filed by the complainants is on the face of it highly frivolous, not maintainable and barred by law and has been filed with the sole motive tq illegally extort money from the respondent.

The present co.mplaint has been filed by misinterpreting the provisions ofAc!

201.6 and the Rules, 2017 in order to somehow."u.urv.or. "u.urv.or.'gfuig"in to himself and wrongfulloss to the respondeirt and they cannot be allowed to succeed in their malafide motives.

The true and correct facts are that: - .

That the respondent is a reputed real estate company having immense goodwill, comprised of law abiding and peace-loving persons and has always believed in satisfaction ofits customers.

The respondent has developed and delivered several prestigious projects such as 'Raheja Atlantis', 'Raheja Atharva', and 'Raheja Vedanta' and in most of these projects Iarge number of families have already shifted after having taken possession and resident welfare associations have been formed which are taking care of the day to day needs of the allottees of the respective projects. .

That the complainants are real estate investors who had booked the commercial unit in question with a view to earn quick profit in a short period.

However, it appears that their calculations have gone wrong on account of severe slump in the real estate )v Page I of 27 WHARERA S-eunuennrvr Complaint No.5511 of 2022 market, and they are now raising untenable and illegal pleas on highly flimsy and baseless grounds.

Such malafide tactics ol the complainants cannot be allowed to succeed.

That based on the application for booking the respondent allotted to the complainant's unit no.

IF-1601.

However, the complainants are still liable to make payment towards the registration charges, stamp duty, service tax and other charges at the applicable stage and the same is known to the complainants from the ver.y inception.

That they were continudUs. defaulters from the very inception and despite being aware that timely payment was the essence of the allotment, they failed to remit the same on time and the respondent was constrained to remind them frequently. requently.

It is submitted that the complainants signed and executed the agreement to sell, and the complainants agreed to be bound by the terms contained therein- That the respondent raised payment demands from the complainants in accordance with the mutually agreed terms and conditions of allotment as well as of the payment plan and the complainants made the payment ofthe earnest money and part- amount of the total sale consideration and is bound to pay the remaining amount towards the total sale consideration of the unit along with applicable registration charges, stamp dury, service tax as well as other charges payable at the applicable stage.

That the time period for calculating the due date of possession shall start only when the necessary approvals will be provided Page lO of 27 HARERA ffiGURUGRAN/] Complaint No.

5511 of 202 2 by the governmental authorities and the same was known to the complainants from the very inception.

It is submitted that non- availability of the occupational certificate is beyond the control of it and the same also falls within the ambit of the definition of 'Force Majeure' condition as stipulated in Clause 4.4 of the agreement to sell.

That despite the respondent fulfilling all its obligations as per the provisions laid down by law, the government agencies have failed miserably to provide essential basic infrastructure facilities such as roads,. sewerage line, water, and electricity supply in the sector where the said project is being developed.

The development of roads, sewerage, laying down of water and electricity supply lines has to be undertaken by the concerned governmental authorities and is not within the power and control ofthe respondent.

The respondent cannot be held liable on account of non-performance by the concerned governmental authorities.

The respondent company has even paid all the requisite amounts including the external development charges (EDCJ to the concerned authorities. thorities.

That despite the respondent fulfilling all its obligations as per the provisions laid down by law, the government agencies have failed miserably to provide the timely occupational certificate.

That the respondent applied to the Director General, Town & Country Planning, Haryana on 27.04.2077 for the grant of occupation certificate.

The District Town Planner, Gurugram on 31.07.2018 sent a report to the Senor Town Planner, Gurugram Circle, Gurugram wherein it was evident that the construction of Page ll of 27 HARERA HP- GURUGRAM Complaint No.

5511 of 2022 the proiect had already been completed.

A perusal of the report dated 31.07.2018 makes it evident that the construction of the project was complete and ready for possession.

That the construction activity ofthe Raheja Shilas -lndependent FIoors (lF) which consists of low-rise floor apartment is already completed and only after completion of construction of the Raheja Shilas -lndependent Floors (lF), the respondent applied for grant of occupation certificates to the Department of Town and Country Planning llglyana on 05.06.2018 and the same is still pending with the deiiafthent.

That apartments are ready for delivery as is evident from the report of DTCp dated 3l.OZ .2019.

It is further submitted that the physical possession may only be offered to the complainants after obtaining occupation certificate from the concerned department.

That every iomplaint has to be decided according to law, but there is a bdnchmark (the lawJ, which the authority applies to the facts in order to discern (and adjudicatel what was the obligation, and if there is any deficiency in intent, effort or delivery as claimed but then facts have to reach the record completely and accurately.

That variation in the economic situation and the upturns and the downturns or unfulfilled expectations ofa few cannot form the basis or an excuse to feign deficiency in service delivery. delivery.

That the unit buyers who had invested in the hope of rising markets, finding insufficient price rise - due to delay of Dwarka expressway, delay in development of allied roads and shifting of toll plaza engineered false and ingenious excuses to complain PaEe 12 of 27 Complaint No.

5511 of 202 2 HARERA GURUGRAI./ and then used social media to make other (non-speculator) shop buyers join them and make complaints, in all probability, by giving them an impression that the attempt may mean 'profit', and there is no penalty if the complaint failed. .

That the three factors: (1) delay in acquisition of land for development of roads and infrastructure (21 delay by government in construction of the Dwarka Expressway and allied roads; and (3) oversupply of the commercial units/shops in the NCR region, operated to not yield the price rise as was expected by a few.

This cannot be a ground for complaint for refund as the applicatign form itself has abundantly cautioned about the possible delay that might happened due to non- performance by Government agencies. .

That the complainants willingly and voluntarily signed the application for allotment, after carefully reading and understanding tIe terms thereofand agreed to be bound by the terms and conditions ofthe booking application form.

They were neither forced nor pressurized to apply for the allotment of the Independent Floor.

It is stated that the agreement was in symmetry with the application form signed by the complainants.

Further the buyer's agreement was executed between the Parties.

The said agreement was duly signed by the complainants after going through the same and understanding each and every clause contained in the agreement as well as the application form.

They were neither forced nor were influenced by anyone to transfer the allotment in their name and the same Page 13 of 27 HARERA ffi GURUGRAI/ Complaint No.

5511 of 2022 E.

8.

2022 E.

8. was voluntarily and willingly entered into by the complainants after understanding the clauses thereo[ 7.

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 submissions made by the parties.

Jurisdiction of the authority The authority has complete territqrial and subject matter .iurisdiction ..:ll',.':: to adjudicate the present complarlilt(fgr the reasons given below.

E.I Territorial iurisdiction:. ,. - As per notification no. l/92/2077-1TCP dated 14.12.2017 issued by Town and Country.

Planning Department, Haryana the jurisdiction of Haryana Real Estate Regulatory Authority, Gurugram shall be entire Gurugram district for all purposes.

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.

E.ll Subiect-matteriurisdiction 10.

Section 11(4)(aJ ofthe Act,2076 provides that 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 otl obligations, responsibilities and functions under the provisions of this Actor the rules and regulationsmade thereunder or to the allottees as per the agreementfor sale, ot to the association ofallottees, as the case may be, tillthe conveyance Page 74 of 27 + HARERA ffiGURUGRAI/ L7.

1_2.

5511 of 2022 F. ofoll the apartments, plots or buildings, as the case may be, to the allottees, or the common areas to the associotion of allottees or the competent outhoity, os the case mqy be; Section 34-Functions of the Authority: 344) ofthe Act provides to ensure compliqnce ofthe obtigqtions cast upon the promoters, the allottees and the real estote agents under this Act and the rules and regulqtions made thereunder. hereunder.

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. ' i:'- l Findings on the obiections raised by the respondents F.l.

Obiection regarding entitlement of DpC on ground of complainant being investor.

The respondent has taken a stand that the complainants are investors and not a consumer.

Therefore, they are not entitled to the protection of the Act and is not entitled to file the complaint under section 31 of the Act.

The respondent also submifted that the preamble of the Act states that the Act is enacted to protect the interest of consumer of the real estate sector.

The authority observes that the respondent is correct in stating that the Act is enacted to protect the interest of the consumers of the real estate sector.

It is settled principle of interpretation that the preamble is an introduction of a statute and states main aims & objects of enacting a statute but at the same time the preamble cannot be used to defeat the enacting provisions ofthe Act.

Furthermore, it is pertinent to note that any aggrieved person can file a complaint against the promoter if he contravenes or violates any provisions of the Act or rules PaEe 15 of 27 k HARERA ffi" GURUGRAM Complaint No.

5511 of 2022 or regulations made thereunder.

Upon careful perusal of all the terms and conditions of the apartment buyer's agreement, it is revealed that they are buyers and paid total price of Rs.88,36,975/- to the promoter towards purchase of an apartment in its project.

At this stage, it is important to stress upon the definition of term allottee under the Act, the same is reproduced below for ready reference: "2(d) "allottee" in relation to a reql estote project means the person to whom a plot aportment or building, as the case may e case may be, has been ollotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the soid allotment through sale, transfer or otherwisq but does not include o person to whom such plot, apartment gr building, as the cose moy be, is given on rent;" 13. ln view of above-mentioned definition of "allottee" as well as all the terms and conditions of the apartment application for allotment, it is crystal clear that the complainants are allottee as the subject unit was allotted to them by the promoter.

The concept of investor is not defined or referred in the Act.

As per the definition given under section 2 of the Act, there will be "promoter" and "allottee" and there cannot be a party having a status of "investor".

The Maharashtra Real Estate Appellate Tribunal in its order dated 29.01.2019 in appeal no.

00060000000105 57 titled as M/s Srushti Sangam Developers PvL Ltd.

Vs.

Sarvapriya Leasing (P) Lts, And anr. has also held that the concept of investor is not defined or referred in the Act.

Thus, the contention of promoter that the allottee being an investor is not entitled to protection of this Act also stands rejected.

PaEe 16 of 27 HARERA ffiGURUGRAM Complaint No.

5511 of 2022 F.

II Obiection regarding agreements contains an arbitration clause which refers to the dispute resolution system mentioned in agreement.

14.

The agreement to sell entered into between the two side on LZ.O2.Z}IO contains a clause 14.2 relating to dispute resolution between the parties.

The clause reads as under: - "All or any disputes arising out or touching upon in relation to the terms of this Application/Agreement to Sell/ Conveyance Deed including the interpretation and validity of the terms thereofand the respective rights and obligotions of the parties shall be settled through arbitrqtion. bitrqtion.

The arbitrotion proceedings sholl be governed by the Arbitrotion and Conciliation Act, L996 or:dny stotutory amendments/ modifications thereof for'thb time being in force.

The arbitration proceedings shall be held qtthe office ofthe seller ln New Delhi by a sole.arbitator who shall be appointed by mutual consent of the porties. ry there is no consensus on appointment ofthe Arbitrotor, the matterwill be referred to the concerned court for the same.

In cqse of any proceeding, reference etc. touching upon the arbitrator subject including any aword the territoriql jurisdiction ofthe Courts shall be Gurgaon as well os of Punjab and Horyano High Court at Chandigarh", 15.

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

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

Also, section 88 ofthe Act says that the provisions ofthis Act shal1 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 National Seeds Corporation Limited v.

M.

Madhusudhan Reddy & V Page 17 of 27 HARERA ffi.GURUGRAI/ Complaint No.

5511 of 2022 Anr. (2012) 2 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 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 could not be construed to take away the jurisdiction oflhe authority.

16. ority.

16.

Further, in Aftab Singh ar(:gfs,-v- Imaar MGF Land Ltd and ors., Consumer case no.

701 ofZ015 decided on 13.07.2017, the National Consumer Disputes Redressal Comrnission, New Delhi (NCDRC) has held that the arbitration clause in agreements beflveen the complainants and builders could not circumscribe the jurisdiction of a consumer.

The relevant paras are reproduced below: "49.

Support to the above view is olso lent by Section 79 olthe recently enacted Real Estate (Regulation and Development) Act 2016 (for short "the Real Estate Act").

Section 79 ofthe said Act reads os follows: - "79.

Bqr ofjurisdiction - No civil court sholl have jurisdiction to entertain ony suit or proceeding in respect of ony matter which the Authoriq) or the qdjudicating offrcer or the Appellate Tribunal is empowered by or under this Act to determine ond no injunction shall be granted by any court or other authority in respect of any oction taken or to be taken in pursuonce ofony power conferred by or under this Act." It con thus, be seen thqt the soid provision expressly ousts the jurisdiction of the Civil Court in respect of qny motter which the Reol Estote Regulatory Authoriqt, established under Sub-section (1) of Section 20 or the Adjudicating OlJicer, appointed under Sub-section (1) of Section 71 or the Reol Estate Appellant Tribunal established under Section 43 ofthe Real Estote Act, is empowered to determine.

Hence, n view of the binding dictum of the Hon'ble Supreme Court in A.

Ayyqswqmy (supra), the mqtters/disputes, which the Authorities under the Real Estote Act are empowered to decide, ore non-orbitrable, notwithstanding qn Arbitration Agreement between the porties to such + Page 78 of 27 HARERA P* GURUGRAI/ Complaint No.

5511 of 2022 motters, which, to q large extent, are similor to the disputes falling for resolution under the Consumer Act, 56. r Act, 56.

Consequently, we unhesitatingly reject the orguments on behalf of the Builder and hold thqt an Arbitrqtion Clause in the afore-stoted kind of Agreements be6,yeen the Complainonts and the Builder cannot circumscribe the jurisdiction ofa Consumer Fora, notwithstonding the omendments made to Section I ofthe Arbitration Act" 17.

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 McF Lan!

Ltd.

Aftab Singh in revision petition no.

2629-30/2018 in civil-appeal no.

23572-25573 of 2017 decided on 70.72.2078 has upheld the aforesaid judgement of NCDRC ...,....' and as provided in Article 141 of the Constitution of India, the law declared by the Supreme Court shall be binding on all courts within the territory of India and accordingly, the authority is bound by the aforesaid view.

The relevant paras are of the judgement passed by the Supreme Court is reproduced below: "25.

This Court in the series ofjudgments as noticed obove considered the provisions ofConsumer Protection Act 1986 as well qs Atbitrotion Act, 1996 ond laid down that complaint under Consumer Protection Act being a special remedy, despite there being on arbitration agreement the proceedings before Consumer Forum have to go on and no error committed by Consumer Forum on rejecting the application.

There is reason for not interjecting proceedings under Consumer Protection Act on the strength on qrbitration agreement by Act, 1996.

The remedy under Consumer Protection Act is o remedy provided to a consumer when there is o defect in any goods or seryices.

The complaint meqns any ollegation in writing mode by o complainqnt has also been explained in Section 2(c) of the Act. f the Act.

The remedy under the Consumer Protection Act is conjined to complaint by consumer os defned under the Act for defect or dertciencies caused by a service provider, the cheap oncl o quick remedy hqs been provided to the consumer which is the object ond purpose ofthe Act as noticed obove." PaEe 19 of 27 MHARERA ffi eunuennvr Complaint No.

5511 of 2022 18.

Therefore, in view of the above judgements and considering the provision of the Act, the authority is of the view that complainants are well within their rights to seek a special remedy available in a beneficial Act such as the Consumer Protection Act and RERA Act, 2016 instead of going in for an arbitration.

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

Findings on the reliefsought by the complainant.

G.

I Direct the respondent to handover the actual physical possession of the unit of the complainants immediately along with all the amenities as promised under the agreement G.

II Direct the respondent to pay the prescribed rate of interest on the amount paid i.e., Rs.88,36,975/- for delay in handing over of possession from the due date ofpossession i.e.,20.08.2012 till the date ofactual handing over ofpossession.

19.

In the present complaint, the complainants intend to continue with the project and are seeking delay possession charges as provided under the proviso to section 18(1) ofthe Act.

Sec.

18[1) proviso reads as under. "Section 18: - Return of amount and compensotion 1B(1). lf the promoter faili to complete or is unoble to give possession of an opartmen' plot, or building, - Provided that where qn ollottee 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 the possession, at such rate as may be prescribed." 20.

Article 4.

Article 4.2 of lhe agreement to sell provides for handing over of possession and is reproduced below: 4.2 Possession Time and Compensation Page 20 of 27 ffi& HARERA 6URUGRAI/ Complaint No.

5511 of 202 2 That the company shall endeavor to give possession of the apartments to the qllottee(s) within thirty-six (36) months in case of tower and thirty (30) months in case of 'Independent Floor' from the date of the execution of the Agreement to sell and qftcr providing of necessary infrastructure in the sector by the Government, but subject to force majeure conditions or any Government/ Regulatory outhoriLy's action, inaction or omission and reasons beyond the control of the compqny.

The company on obtqining certtfcate for occupqtion and use bythe Competent Authorities shall hand over the Unit to the Purchoser for this occupqtion and use and subject to the Purchaser hoving complied with all the terms and conditions of this application form & Agreement To sell. ln the event of his foilure to take over and /or occupy ond use the unit provisionally and/or linally allotted within 30 doys from the dote of intimotion in writing by the seller, then the ssme shall lie qt his/her risk dnd cost ond the Purchoser shall be lidble to compensation @ Rs.7/- per sq. ft. of the super orea per month as holding chorges for the entire period of such deloy...........

21.

At the outset, it is relevant !o comment on the preset possession clause of the agreement wherein the possession has been sub,ected to providing necessary infrastructure specially road, sewer & water in the sector by the government, but subject to force majeure conditions or any government/regulatory authority's action, inaction or omission and reason beyond the control of &e seller.

The drafting of this clause and incorporation of such conditions are not only vague and uncertain but so heavily loaded in favour of the promoter and against the allottee that even a single default by the allottee in making payment as per the pla er the plan 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 agreement to sell by the promoter is just 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 Page 2l o'i 27 V HARERA GURUGRA[/ his dominant position and agreement and the allottee dotted lines.

Complaint No.5511 of 2022 drafted such mischievous clause is left with no option but to sign the the Payment ofdelay possession charges at prescribed rate ofinterest: Proviso to section 18 provides that where 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 ofpossession, at such rate as may be prescribed and it h.as b-een prescribed under rule 15 of the :..::a4...- rules.

Rule 15 has been reproiiuCia as unae., Rule 75.

Prescribed.rate ofinterest- lProviso to section 12, section 1B and sub-section (4) anil subsectioi(7) ofsection 7gl O For the purpose of piijyiso to section 12; section 18; ond sub- sections (4) ond (7) of section 19, the "interest at the rate prescribed" shqll be.the State Bonk of India highest morginol cost of lending rate +20k.: Provided that in case the State Bank oJ lndia marginol cost of lending rote (MCLR) is not in use, it shall be reploced by such benchmark lending rates which the State Bank of lndia may f;x Irom time to time for lending to the general public, 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 reasonable and if the said rule is followed to award the interest, it will ensure uniform practice in all the cases. the cases.

Taking the case from another angle, the complainant/allottees were entitled to the delayed possession charges/interest only at the rate of Rs.7/- per sq. ft. per month as per relevant clauses of the buyer's agreement for the period of such delay; whereas the promoter was entitled to interest @ 18% per annum compounded at the time of every r _ in on 22.

24.

Page 22 of 27 25.

HARERA GURUGRAM Complaint No.

5511 of 2022 succeeding instalment for the delayed payments.

The functions of the authority are to safeguard the interest ofthe aggrieved persons, may be the allottee or the promoter.

The rights ofthe parties are to be balanced and must be equitable.

The promoter cannot be allowed to take undue advantage ofhis dominate position and to exploitthe needs ofthe home buyers.

The authority is duty bound to take into consideration the legislative intent i.e., to protect the interest of the consumers/allottees in the real estate sector.

The claliseS Of the buyer's agreement entered between the parties are one-sided, unfair, and unreasonable with respect to the grant of inteiest'for'.delayed possession.

There are various other clauses in the 6uidr;t agreement which give sweeping powers to the promoter to cancel the allotment and forfeit the amount paid.

Thus, the terms and conditions of the buyer's agreement are ex- facie one-sided, unfair, and unreasonable, and the same shall constitute the unfair trade practice on the part of the promoter.

These type of discriminatory terms and conditions of the buyer's agreement would not be final and binding Consequently, as per website of the State Bank of India i.e., https://sbi.co.in. the marginal cost of lending rate (in short, MCLR) as on date i.e., 23.05.2023 is 8.7Oo/o, Accordingly, the prescribed rate of interest will be marginal cost of lending rate +20/o i.e., 1^O.7Oo/o.

1^O.7Oo/o.

The definition ofterm 'interest' as defined under section 2(zal ofthe 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 26.

Page 23 of 27 HARERA ffi- GURUGRAM Complaint No.

5511 of 2022 the promoter shall be liable to pay the allottee, in case of default.

The relevant section is reproduced below: "(za) "interest" means the rotes of interest payable by the promoter or the 0llottee, os the case may be.

Explqnation. -For the purpose ofthis clouse- (i) the rote of interest chorgeoble t'rom the qllottee by the promoter, in case of default, shall be equal to the rate of interest which the promoter sholl be liqble to pqy the allottee, in case ofdefault; tii) the interest payable by the promoter to the allottee shqll be from the date the promoter received the omount or ony port thereoftill the date the amount or pqrt thereof and interest thereon is refunded, and the interest patable by the allottee to the promoter sholl be from the dqte.the allottee defqults in poyment to the promoter lill Lhe dote it is poid;" 27.

Therefore, interest on the delf payrnents from the complainant shall be charged at the prescriled rate .i.e., 10.70%0 by the respondent /promoter which is the same as is being granted her in case of delayed possession charges.

28.

0n consideration of the circumstances, the documents, submissions made by the parties and based on the findings of the authority regarding contravention as per provisions of rule 28(2), the Authority is satisfied that the respondent is in contravention of the provisions of the Act.

By virtue of clause 4.2 of the agreemeirt'executed between the parties on 72.02.2010,the possession ofthe subject apartment was to be delivered within 30 months from the date of agreement to sell which comes out to be 12.08.2012.

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

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

The authority is ofthe considered view that there is delay on the Page 24 of 27 ffiHARERA *6b, eunuenRvt Complaint No.

5511 of 2022 part of the respondent to offer of possession of the allotted unit to the complainant as per the terms and conditions of the agreement to sell dated 72.02.201,0 executed between the parties.

Further, no OC/part OC has been granted to the project.

Hence, this project is to be treated as on-going project and the provisions of the Act shall be applicable equally to the builder as well as allottee.

It is pertinent to mention over here that even after a passage dmore than 10.9 years neither the construction is complete ndr.a!,oiieiirf porr".rion of the allotted unit has been made to the allottee by the builder.

Further, the authority observes that there is. no document on record from which it can be ascertained as to whether t}le respondent has applied f,or occupation certificate/part occupation certificate or what is the status of construction of the proiect.

Hence, this project is to be treated as on- going project and the provisions ofthe Act shall be applicable equally to the builder as well as allottees.

29.

Accordingly, the non-compliance of the mandate contained in section 11(4J (a) read with section 18(1J ofthe Act on the part of the respondent is established.

As such the complainants are entitled to delay possession charges at rate of the prescribed interest @ 10.7 0o/o p.a. w.e.f.

12.0a.2012 till actual handing over ofpossession or offer ofpossession plus two months after obtaining occupation certificate from the competent authority, whichever is earlier, as per section 18(1) of the Act of 2016 read with rule 15 ofthe rules. .^( PaEe 25 of 27 ffi& H.

30.

HARERA GURUGRAM Complaint No. plaint No.

5511 of 2022 Directions of the authority Hence, the authority hereby passes this order and issues the following directions under section 37 of the Act to ensure compliance of obligations cast upon the promoter as per the function entrusted to the authority under section 34(0: i.

The respondent is directed to pay interest to the complainant against the paid-up amount-at the prescribed rate of 1,O.7Oo/o p.a. for every month of delai-a&;lilirthe due date of possession i.e., 1.2.0A.2012 till actual ii{i,iiting over of possession or offer of possession plus two rnoiiths after obtaining occupation certificate from the competent authorify, whichever is earlier, as per section L8(11 of the Act of 2016 read with rule 15 of the rules. ii.

The arrears ofsuch interest accrued from 12.08.20L2 till the date of order by the authority shall be paid by the promoter to the allottee within a period of 90 days from date of this order and interest for every month ofdelay shall be paid by the promoter to the allottees before 1Oth of the subsequent month as per rule 16(2J ofthe rules; iii.

The respondent is directed to offer the possession ofthe allotted unit within 30 days after obtaining occupation certificate from the competent authority.

The complainants w.r.t. obligation conferred upon him under section 19(10) of Act of 2016, shall take the physical possession ofthe subject unit, within a period of two months ofthe occupancy certificate.

V PaEe 26 of 27 HARERA OURUGRAM iv.

The complai v.

The rate of promoter, in rate i.e., 10.7 o/o by vi.

The which is Complaint stands File be consigned to F".p"tu, N" 5511 "f ,0rr-l ln chargeable from the allottees by th case of ult shall be charged at the prescrib ants directed to pay outstanding dues, if any. after adjus ent of terest for the delayed period and clearing all eo dues, if any, the respondent sha handover the n of the allotted unit. tted unit. rate of interest whi allottee, in case of per section 2 romoter which is the sam r shall be liable to pay th elayed possession charges the complainan Regulatory Authority, Gurugram 31.

Dared: 2 3.0 5.2 023 (Ashok Sangwan) Member Haryana Real Estate e anything /& .*', Page27 of 27