HARISH ARORA vs ROYAL BLUE CITY DEVELOPERS PVT LTD

HARERA GURUGRANll BEFORE THE HARYANA REAL AUTHORITY, complaint No.

5556 of 2022 ESTATE REGULATORY GURUGRAM Complainant Respondents Member Complainant Respondents ORDER L. 'l'he present complaint has been filed by the complainant/allottee under Section 31 of the Real Estate (Regulation and Development) Act, 2016 (in short, the ActJ read with rule 28 of the Haryana Real Estate (Regulation and DevelopmentJ Rules, 2017 (in short, the Rules) for violation of section 11[a](a) of the Act wherein it is inter alia prescribed that the promorer shall be responsible for all obligations, responsibilities and functions under the Sh.

Harish.Arora R/o: 98, Street No.

4, Dhawan Colony, Ferozepur City, Ferozepur, punjab-152002 Versus 1.

Royal Blue City Developers pvt.

Ltd.

Regd.

Office at: Unit No.-314, 3.d floor, ILD 'frade Centre, Sohna Road, Sector-47, Gurugram- 122 001 2.

Royal Infra Buildtech Private Limited Regd.

Office at: Office No.-220, 2no floor, ILD Trade Centre, Sohna Road, Sector-47, Gurugram-12 2001 COMM: Shri Vijay Kumar Goyal APPEARANCE: Ms.

Daggar Malhotra[Advocate) None v Complaint no.

5556 of2O22 $r tdateofhearing: L6.rt.2022 Order reserved on: 79.70.2023 0rder pronounced on 14.t2.2023 Page 1of 11 ffiHARERA ffi eunuennHl Complaint No.

5556 of 202 2 provision of the Act or the rules and regulations made there under or to the allottee as per the agreement for sale executed inter se.

A.

Unit and proiect related details 2. 'lhe particulars of the project, the details of sale consideration, the amount paid by the complainant, date of proposed handing over the possession and delay period, if any, have been detailed in the following tabular form: S.No.

Particulars Details 1.

Name and location of the project "Royal Homes", Sector39, Gurugram 2.

Nature ofthe project Residential tJnit 3.

RERA Registered/ not registered Unregistered 4.

Unit no.

Flat no.-001, Upper Ground Floor, Tower-A (As per page no.

14 of the complaint) 5.

Unit area admeasuring 850 sq. ft.

50 sq. ft. (Super Area) (As per page no.

28 of the complaintJ 6.

Allotment letter 07.09.2019 (As per page no.

15 of complaint) 7.

Date of execution of agreement to sell 06.1.1..2019 [As per page no.

13 of the complaint) 8.

Possession clause Not mentioned in agreement to sell 9.

Due date of possession Cannot be ascertained 10.

Penalty to be paid as per agreement to sell in case of delay in handing over of possession Clause 2 That the work of building stops before the possession, then I will refund the money.

11.

Total sale consideration Rs.52,00,000/- (As per payment plan on page no.

15 of Page 2 of 11 HARERA GUI?UGRA[,{ Complaint No.

5556 of 2022 co mp laint) 12.

Amount paid by the complainant Rs.15,51,000/- (As per page no.

L6 of the complaintl 13.

0ccupation Certificate/ Completion Certificate Not obtained 74.

Offer of possession Not offered B.

Facts of the complaint: 3. 'l'hat the respondents had advertised under-construction residential units in its project namely, Royal Homes situated in Jharsa, Sector-39, Gurugram.

The complainant found the said residential units, as advertised, suitable to his requirements.

Accordingly, on 20.10.2019, the complainant paid a booking amount of Rs.51,000/- to the respondents Thereafter, the complainant entered into respondent no.1 on 06.11.2079 in regard to Flat No.001, Tower A on Upper Ground Floor, having covered area of850 sq. ft. in the total plot admeasuring 325 sq. yards.

The respondents had failed to issue one receipt but the said payment is duly recorded with cheque number, date and amount in clause 1 of the agreement to sell. respondent no.1 and some Some payments were sought in the names of payments were sought in the name of respondent no.2 and thus the complainant had made the payments as sought by the respondent no.1. 'l'hat the total sale consideration of the unit is Rs.52,00,000/- and the complainant has paid to the respondents an amount of Rs.15,51,000/- till date. till date.

I'hat the pace of construction of the unit was very slow and the complainant brought that up before the respondent several times but to no avail.

As per clause 2 of the agreement to sell, the respondent undertook to Page 3 of 11 for an Flat No.001 in Tower A. agreement to sell with 4. /u.

5.

6. ffi HARERA #* eunuennvr Complaint No.

5556 of 202 2 refund the entire amount so paid by the complainant in case the work of the building stopped before possession.

The status of construction was nearly at a halt since several months and seeing the same, the complainant sought for refund of his hard-earned money from the rerspondent. 'l'he respondent instead of abiding by the terms of clause 2 of the agreement, stopped picking up the phone calls of the complainant.

Later, the complainant stumbled upon a piece of information regarding the project and was shocked to learn that the Authority vide order dated 10.11.2020 in complaint bearing number RERA-GRG-2553-2020 ordered sealing of the said project premises on account of non-registration of the project with the Authority. 'that the complainant seeks refund of the entire amount paid by the complainant to the respondents with interest as it is clearly mentioned in the clause 2 of the agreement to sell that the respondent will refund the amount paid if the work of building stops before the possession. 'fhat on account of all of the above-mentioned reasons, sealing of site prernises, failure of the respondents to carry out their obligations as per section 11[ ) (a) the complainant in line with section].8 and 19(4J wishes to withdraw from the project and humbly prays for his hard earned money to be refunded to him with interest.

C.

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

Direct the respondents to refund the entire amount of Rs.15,51,000/- paid by the complainant along with interest at the prescribed rate on the paid amount from the date of payment till actualisation. ii. ation. ii.

Direct the respondents to pay the litigation cost of Rs.1,00,000/-.

The authority issued a notice dated 1,8.08.2022 [o the respondents by speed 7. o. post and also on the given email address at [email protected], [email protected] and w Page 4 of 11 ffi HARERA #" eunuennt'l Complaint No.

5556 of 2022 [email protected].

The delivery reports have been placed in the file. 'fhe counsel for the respondents neither put in appearance nor filed a reply to the complaint within the stipulated period despite publication dated 16.03.2023 in various newspapers.

Accordingly, the authority is left with no other option but to struck offthe defence ofthe respondents and proceed ex-parte against the respondents and decide the complaint on the basis of documents and pleadings filed by the complainant.

D. furisdiction of the authority: 9. 'the authority observes that it has territorial as well as subject matter jurisdiction to adjudicate the present complaint for the reasons given below.

D.l Territorialiurisdiction As per notification no. l/92/2077-lrcp dated 14.72.2017 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 area of Gurugram district.

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

D.ll Subiect matter iurisdiction Section 11(a)(a) of the Act, 2016 provides that the promoter shall be responsible to the allottees as per agreement frrr sale. section 11(a)[aJ is reproduced as hereunder: Section 11(+)(a) Be responsible for all obligotions, responsibilities ond functions under the provisions of this Act or the rules and regulations made thereunder or to the allottee os per the agreement for sole, or to the assotriotion of altottee, os the cose may be, till the conveyance of all the a all the aportments, plot.s or buildings, os the cose moy be, to the ollottee, or che common areas to the ossociation of a ottee or the competent authority, as the cose moy be; ^ Section 34-Functions oI the Authority: lL Page 5 of 11 ffi HARERA ffi eunuonnnt Complaint No.

5556 of 2022 3a(fl of the Act provides Co ensure compliance of the obligations cast upon the promoter, the allottee and the reol estate agents under this Act and the rules and regu Ia ti ons m ade thereunder.

10.

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.

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 U.P. and Ors." SCC Online SC 1044 decided on 77.77.2021 and followed in M/s Sana Reqltors Private Limited & others V/s Union of India & others SLP (Civil) No.

13005 of 2020 decided on 12.05.2022 wherein it has been laid down as under: "86.

From the scheme of the Act of which a detailed reference has been made ond toking note of power of adjudication delineated with the regulotory outhoriry ond adjudicating ofJicer, what finally culls out is that although the Act indicates the distinct expressions like 'refund', 'interest', 'p'enalty' and 'compensation', a conjoint reading of Sections 1.8 and L9 clearly manifests that when it comes to refuid of the omount, and interest on the refund amount, or directing poyment of interest for deloyed delivery of possession, or penolty ond interest thereon, it is the regulotory authority which has the power to exomine and determine the outcome of o complaint. complaint.

At the same time, when it comes to a question of seeking the relief of adjudging compensotion and interest thereon under Sections 12, 14, 18 and 19, the adjudicoting officer exclusively has the power to determine, keeping in view the collective reoding of Section '.71 read with Section 72 of the Act. if the odjudicacion under Sections 12, 14, 18 ond 19 other thon compensotion as envisaged, if extended to the adjudicating officer as prayed that, in our view, may intend to expand the ambit and scope of the powers ond functions of the adjudicating officer under Section 71 ond thot would be ogoinst the mandlte of the Act 2016." 12.

Hence, in view of the authoritative pronouncement of the Hon'ble Supreme Court the authority has the jurisdiction to entertain a complaint seeking refund of the amount and interest on the amount paid by the complainant.

E.

Findings on relief sought by the complainant: t4." Page 6 of 11 '. ri< rl i;,rlJ E.I HARERA GURUGRAI/] Complaint No.

5 556 of 2022 seek refund referred Under Section dependent on any contingencies or Page 7 of 11 Direct the respondent to refund the entire amount i'e., Rs.15,51,000/- to the complainant at the prescribed rate of interest from the date of respective payments till its complete realization 13.'lhe complainant was allotted a unit in the project of respondent "Royal Homes", in Sector 39, Gurugram vide allotment letter dated 01.09.2019 for a total sum of Rs.52,00,000/-.

An agreement to sell dated 06.11.2019 was executed between the parties and the complainant started paying the amount due against the allotted unit and paid a total sum of Rs.15,51,000/.

14.

The due date of possession cannot be ascertained as there is no possession clause in the agreement to sell.

The occupation certificate of the proiect where the unit is situated has still not been obtained by the respondents/promoter.

15. moter.

15.That it is evident from the above mentioned facts that respondents will refund the amount paid if the work of the construction stops before the p ossessio n.

16.

The authority is of the view that the allottee cannot be expected to wait endlessly for taking possession of the allotted unit and for which s\he has paid a considerable amount towards the sale cc,nsideration and as observed by Hon'ble Supreme Court of India in lreo Grace Realtech Pvt.

Vs.

Abhishek Khanna & Ors., civil appeal no.

5785 of 2019, decided on 1r.01.2021.: - " ....

The oicupation certifcate is not available even os on date, which clearly omounts to deficiency of service.

The allottee cannot be made ta wait indefinitely for possession of the apartments allotted to them, nor can they be b,cund to take the aportments in Phase 1 of the project......." 17.

Further in the judgement of the Hon'ble Supreme Court of lndia in the cases of Newtech Promoters and Developers Private Limited Vs Stqte of U.P. and Ors. (Supra) reiterated in case of M/s Sana Realtors Private Limited & other Vs llnion of India & others SLP (Civil) No.

13005 of 2020 decided on 1,2.05.2022 observed as under: 25.

The unqualified right of the allottee to ^ lB(1)(o) ond Section 19@) of the Act is not ld/ ffi HARERA ffi eunuennitt Complaint No.

5556 of Z0ZZ stipulotions thereof. lt oppears thot the legisloture has consciously provided this right of refund on demand os an unconditional absolute right to the allottee, if the promoter fails to give possession ol the apartment, plot or building within the time stipulated under the teims of the agreement regardless of unforeseen events or stay orders of the Court/Tribunal, which is in either way not ottributoble t:o the allottee/home buyer' the promoter is under an obligation to refund the amount on demand with interest ot the rote prescribed by the State Government including compensotion in the manner provided under the Act with the proviso that if the allottee does not wish t not wish to withdrow from the project, he shall be entitted for interest for the period of delay till handing over possession ot the rate prescribed.

18.

The promoter is responsible for all obligations, responsibilities, and functions under the provisions of the Act of 20\6, or the rules and regulations made thereunder or to the allottee as per agreement for sale under section 11[a)(a).

The promoter has failed to complete or unable to give possession of the unit in accordance with the terms of application form or duly completed by the date specified therein.

Accordingly, the promoter is liable to the allottee, as the allottee wish to withdraw from the project, 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.

19.

Admissibility of refund along with prescribed rate of interest: In the present complaint, the complainant intend to Withdraw from the project and is seeking refund of the paid-up amount as provided under section 18[1) of the Act.

Sec.

18[1J reads as under: "section 18: - Return of amount and compensation 18(1).

If the promoter foils to complete or is unoble to ,give possession of an aportment, plot, or building, - '(a) in accordaice with the terms ofthe agreement for sale or, as the cose may be, duly completed by the date specified therein; or (b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shalt be liable on demand ofthe allottees, in case the allottee wishes to withdrow from the project, without prejudice to any other remed-v available, to return the omount received by him in rrrprit os thot opartment, ptot, buitding, as the case may be, with interest at such rate as may be prescribedin this behalf including compensation in the monner as provided under this Act: provided thot where an allottee does not intend to withdrow from the proiect, h proiect, he shatl be poid, by the promoter, interest for every month ofdeloy, till the handing over of [Ar,..lh" nott"ssion' at such rote os moy be prescribed"' Page 8 of 11 ffiHARERA ffi eunuennvt Complarnt No.

5 556 of 202 2 (Emphasis supplied) 20.

The complainant is seeking refund of the amount paid by him with interest at the prescribed rate as provided under rule 15 ofthe rules.

Rule 15 has been reproduced as under: RuIe 75.

Prescribed rate of interest- [Proviso to section 72, section 7B ond sub' section (4) and subsection (7) of section 191 (1) For the purpose of proviso to section 12; section 1B; ond sub'sections (4) and (7) of section L9, the "interest at the rate prescribed" shall be the Stote Bonk ol lndio highest marginol cost of lending rate +20/0.: Provided that in case the State Bank of Indio marginal cost of lending rote (MCLR) is not in use, it sholl be replaced by such benchmark lending rates which the Stote Bank of lndia may fix from time to time for lending to the generol public.

21.I'he 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.

22.

Consequently, as per website of the State Bank of India i.e., https:/lsb-i.eo.tu, the marginal cost of lending rate fin short, MCLR) as on date i.e., 14.12.2023 is 8.75%.

Accordingly, the prescribed rate of interest will be marginal cost of lending rate +20/o i.e., 10.75o/o.

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

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

Explanation. -For the purpose of this clause- (i) the rate of interest chargeable from the allottee by the promoter, in case of default, shall be equal to the rote of interest which the promoter shall be liable to poy the allottee, in case of default; (ii) the interest payable by the promoter to the allottee sholl be from the date the promoter received the amount or any part thereof till the date the omount or part thereof and interest thereon is refunded, and the interest payable by the allottee to the promoter shall be from the date the ollottee defoults in payment to the promoter till the date it is paid;" Page 9 of 11 ffi HARER,q #. eunuennvr Complaint No.

5556 of 2022 24.The authority has taken suo-moto action against the respondents/promoter in complaint no.

2553-2020 and imposed a penalty of Rs.50,00,000/- vide order dated 10.71.2020 as the respondents/promoter have never applied for registration in the Authorily and directed the promoter to apply for registration within a period of one month from the date of that order and ordered sealing of the said project premises on account of non- registratio n of the project with the Authority.

But the respondents/promoter had not applied for registration till date and the occupation certificate of the project is not obtained till date and no offer has been made.

Thus, authority after considering the facts stated by the complainant and the documents placed on record is of the view that the complainant is well within his right for seeking refund under section 18(1)(a) ofthe Act, 2016.

25.

The authority hereby directs the promoter to return the amount received by him i.e., Rs.15,51,000/- with interest at the rate <tf 70. te <tf 70.750/o [the State Bank of India highest marginal cost of lending rate (MCLR) applicable as on date +20/o) as prescribed under rule 15 of the Haryana Real Estate [Regulation and Development) Rules, 2017 from the date of each payment till the actual date of refund of the amount within the timeliners provided in rule 16 of the Haryana Rules 2017 ibid.

E.ll Direct the respondent to pay an amount of Rs.

1,00,000/- to the complainant as cost of present litigation, 26.

The complainant is seeking relief w.r.t compensration in the aforesaid reliel Hon'ble Supreme Court of India in civil appeal titled as M/s Newtech Promoters and Developers Pvt.

V/s State ofIJP & Ors.

Supra held that an allottee is entitled to claim compensation under sections 12, 14, l U and section L9 which is to be decided by the adjudicating officer as per section 71 and the quantum of compensation shall be adjudged by the adjudicating officer having due regard to the factors mentioned in section 72.

The Page 10 of 11 ffiHARERA lW* eunuennnr Complaint No.

5556 of 2022 adjudicating officer has exclusive jurisdiction to deal with the complaints in respect of compensation.

F.

Directions of the Authority: 27.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(fJ: i) The respondents /promoters are directed to refund the amount i.e., Rs.15,51,000/- received by them from the complainant along with interest at the rate of 10.750/o p.a. as prescribed under rule 15 of the Haryana Real Estate fRegulation and Development) Rules, 20lZ from the date of each payment till the actual date of refund of the amount. iil A period of 90 days is given to the respondents to comply with the directions given in this order and failing which legal consequences would follow. ld follow. iii) The respondents are further directed not to create any third-party rights against the subject unit before full realization of paid-up amount along with interest thereon to the complainant, and even il any transfer is initiated with respect to subject unit, the receivable shall be first utilized for clearing dues of allottee-complainant.

28.

Complaint stands disposed of.

29.

File be consigned to the registry. vt-; (Viiay Kuffar Goyat) Member Haryana Real Estate Regulatory Authority, Gurugram Dated: L4.l2.2023 Page 11 of 1l