SATISH MALIK vs VATIKA LIMITED

*HARERA #- eunuennr,r BEFORE THE HARYANA REAt ESTATE REGUTATORY AUTHORITY, GURUGRAM Satish Malik R/o:26/27, East Patel Nagar, New Delhi_ 1r.0008.

Versus M/s Vatika Limired li"rplrt", ""rilrror, I Complainant address: A002, Inxr City Centre, GF, Block A, Sector 83, Vatika India Next, Gurgaon-Haryana 7220t2.

Respondent CORAM: Sh.

Sanjeev Kumar Arora Member APPEARANCE: Sh.

Varun Kathuria (Counsel) For Complainant For Respondent ORDER 1.

The present complaint has been filed by the complainant/allotte.e undor section 31 ofthe Real Estate (Regulation and DevelopmentJ Act,2016 (in short, the Act) read with rule 28 of the Haryana Real Estate (Regulation and Development) Rures, 2017 (in short, the IluresJ for viorariolr or section 11(41(al of the Act wherein jt is inter alia prescribed thar thc promoter shall be responsible for all obligations, responsibilities.rnd Sh.

Ankur Berry (CounselJ ORDER Page 1 of 23 'c-mptiint no. , ils-itzozz I Qate of fiting com ptaiat: lo+.oi.zozz I qlrq!4qle orllearing, 1g.B.ao22 I Date.of decjgon , lot.Os.zozg I $HARER ffi eunuennrv functions under the provisions of the Act or the rules and regulations made there under or to the allottees as per the agreement for salc executed inter se.

A.

Project and unit related details 2.

The particulars of the proiect, the details of sale consideration, tho amount paid by the complainant(sJ, date of proposed handing ovcr thc possession, delay period, if any, have been detailed in thc followrnlj tabular form: ln fb rma tio n ka lnxt City Center" at Sector 83, rugram, Harya na mercial conrplcx 2 acres S.

No.

Heads 1.

Name and Iocdrion ol the "Varr proiect Guru Nature ofthe'project : Com Area of the prolect 10.7 2.

J.

4.

DTCP License 122 valid upto 13.0 Licensee name M/s 5.

RERA registered/ not registered Not 6.

Date of booking 18.1 7.

Allotment letter 03. (par B, Unit no.

D-oa (as p coml 9.

Date of execution of buver's apreement Not ( 3.

Tt mon year on lt that colts 10. colts 10.

Assured return clause (Taken from the allotment letter) of 2008 dared 14.06.2008 06.2018 fnit ril"a"rt""i registered Lrloio e no.

39 of reply) 02.2017 age no.

14 of complaint ) 008, GF.

D block s per allotment letter on page rryrlq!nt) )t executcd oo.

14 of The dcvelopor shall rcnrit rn rssLrrcrl ,nthly return ol Rs.

B0 pcr sq. fr. rrpl1) I rr from the date ofbooking or Lln it is put lease whichever rs c.arlier. lt rs stttod rt the project is in advanco sLagcs ol rstrllction and Lhe dcvclopor bastil oI t-om ola rnl n(t 2 / \ nl /ll ) / _______t Page2 of 23 S HARER,I #, ounuennH,r 11.

Total consideration 72.

Total amount paid by the complainants 13.

Amount of assured return paid by thq lesp-onde!t _ Date of offer of possessior to the coqplainants , Occupation certificate 1,4.

15. it, p."t"nt plans and cstimatcs an(l subjccl to dll JUst r'xr'('ntr,, \ contc,mplates to complete .onstnrction ol thc said Building/said commerri.il unrt soQIl, Rs.2,06,40,000/- [as per allotmcnt letter on page no.

14 (]l complaintl Rs.'1,28,17 ,440 / Not offcrcd Not obtained B.

Facts of the complaint 3.

That on the representations made by the respondent complainant booked a unit on 15.11.2016.

The basic sale pricc of the unit rvrts Rs.

2,06,40,000/- and the total sale consideration was Rs.

2,15,68,800/ .

That an allotment letter dated 03.02.2017 was issued by the resporlrlcnt allotting unit no.

D-008 on the ground floor of its projt'ct "lNX'1.(lit)' Centre" to the complainant, having a super area of 2580 sq. ft. fbr a Lrasic sale price of Rs.

2,06,40,000/- in a 60:40 payment plan wherein 40'f.) ol the basic sale consideration is payable at the time of offer of posscssir)n 5.

That the clause 3 ofthe allotment letter specified that the responde nt w.rs liable to pay monthly assured return for the unit of the conrplain.trlt li)l ,l period of 3 years from the date of booking of the unit of thc com platna nt @ Rs.

80 per sq. ft. per month. per month.

The allotment lettcr specific;rlly nlcntioni'd that the project as in advance stages ofconstruction and was likcly lo be completed soon.

Com plaint no 275 of2022 Rs.

41,59,667 / till Septcmbcr 201B gqlgIule R2 on page no. l'i9 of replyJ l'agc 3 ol 23 S HARERT flh eunuennlrr That no builder buyer agreement was executed between the parties for reasons best known to the respondent despite of repeated req uests crf tll ir complainant.

That the respondent in Furtherance of its mala fide intentions and ulterior motives without assigning any reason stopped thc payment of thc monthly returns to the complainant from October, 201g onwards.

Despite of repeated requests, the same have not been paid to thc complainant till date.

That the respondent has not even offered the possession of the unit of thc complainant to him and has further stopped responding to thc communications ofthe complainant and has also restricted entry into its office for the complainant and other buyers and has failed to apprisc thc complainant regarding the true and correct status of the project whcrc the unit of the complainant is located and has further refused to pa1, 15g monthly assured rent/minimum guaranteed rent to the complainant for reasons undisclosed.

That the conduct of the respondent is illegal and arbitrary and thc respondent is guilty of deficiency of services and of unfair and monopolistic trade practices.

The respondent is clearly in breach cf its contractual obligations and of causing financial loss to the complaitlant and the conduct ofthe respondent has caused and is continuing to cause a great amount of financial loss stress, grief and harassment to thc complainant and their family members.

The present claim is also within limitation in view of the various orders passed by the Hon,ble Suprenre Court of lndia extending limitation due to covid.

Hence the presenr complaint.

Compfaint no.ZZS ofZOZi- l 6.

7.

B.

9.

Page 4 of 23 HARERA GURUGRAII Complaint no.275 of 2022 C. of 2022 C.

Relief sought by the complainants: 10.

The complainant has sought following relief(s): i- Direct the respondent to pay the amount of assured returns duc and payable by it to the complainanr[s] from October,20lB rill October, 2019 to be calculated at Rs. g0/- per sq. ft. per month. ii.

Direct the respondent to pay interest at the prescribed rate on thc unpaid monthly returns/investment returns to the complainantIsJ, to be calculated from the date the monthlv rctun]s became due till the date of actual payment. iii.

Direct the respondent to execute a conveyance deed for the unit ol' the complainant and to handover the physical/sym bolic possession of the unit booked by the complainant(s] to him, complete and ready in all respects.

11.

On the date of hearing, the authority explained to the respond€,nts/ promoters about the contraventions as alleged to have been commjttcd in relation to section 11(al (a) ofthe act to plead guilty or not to t,lead guilty.

D.

Reply by the respondents 12.

The respondents have contested the complaint on the following grounds.

13.

That the complainant has got no locus standi or cause ofaction to filr: the present complaint.

The present complaint is based on an erroni3ous interpretation of the provisions of the Act as well as an incorr.crt understanding of the terms and conditions of the allotment letter datcd 04.05.2010, as shall be evident from the submissions made in thc following paras of the present reply.

Page 5 of23 ffiHARERA S- e0nuennr,,r 14.

That at the very outset it is submitted that the present complainr is not maintainable or tenable in the eyes of law.

The complainant has misdirected himself in filing the above captioned complaint before this ld. authority as the reliefs being claimed by the complainant cannot be said to fall within the realm of jurisdiction of this t,d, Authority.

Authority.

It is humbly submitted that upon the enactment of the tsannin5; of Unregulated Deposit schemes Act,2o1g, (hereinafter referred as uuDS Act) the 'Assured Return, and/ or any ,,Contmitted Ileturns., on tho deposit schemes have been banned.

The respondent company having not taken registration from SEBI Board cannot run, operate, conttnuc an assured return scheme.

The implications ofenactment ofBUDS Act read with the Companies Act, ZO13 and Companies (Acceptance ol Deposits)Rures, 2014, resulted in making the assured return/comm ittcd return and similar schemes as unregulated schemes as being within thc definition of "Deposit.

15.

That as per Section 3 of the BUDS Act all Unregulated Deposit Sche,nrc have been strictly banned and deposit takers such as buirders, canrror. directly or indirectly promote, operate, jssuc any advertiscntcnrs soliciting participation or enrolment in; or accept deposit.

Thus the section 3 of the BUDS Act, makes the Assured Return Schemes, of rhc builders and promoter, illegal and punishable under law.

Further as per the Securities Exchange Board of India Act, 1992 (hereinafter referred as SEBI Act) Collective Investment Schemes as defined under Section t t AA can only be run and operated by a registered person/company.

Hencc, the assured return scheme ofthe opposite parties / respondent company has become illegal by the operation of law and the opposjte partjc; / Complaint no.275 of 2022 Page 6 of 23 HARERA GURUGRAM respondent company cannot be made to run a scheme which has beconte infructuous by law.

Thus, the present compraint deserves to be dismissed at the very outset, without wasting precious time of this Hon,blc Authority.

16.

That it is pertinent to mention that the present complaint is not maintainable before the Hon,ble Authorjty as it is apparent from the prayers sought in the complaint. complaint.

That further it is crystal clear from reading the complaint that the complainant is not an ,Allottee,, but purely is an'lnvestor', who is only seeking physical possession/delay possession charges from the respondent, by way of present petition, which is not maintainable as the unit is not meant for personal use rather it js meant for earning rental income.

17.

Thatinviewof the judgment and order dat ed 1,6..10.2017 passed by rhc Maharashtra RERA Authority in the complaint titled Mohesh poriant vs.

Monarch Solitoire order, Complaint No: CC00600000000078 of 21117 wherein it has been observed that ln case where the Complainant has invested money in the proiect with sole intention ofgaining profits out ot the prolect, then the complainant is in the position of co_promoter and cannot be treated as,Allottee,.

18.

That the complainant has come before this hon,ble authority with un clean hands.

The complaint has been filed by the complainant just to harass the respondent and to gain unjust enrichment.

The actuar reas;on for filing of the present compraint stems from the changed financial valuation of the real estate sector, in the past few years and the allottr.e malicious intention to earn some easy buck.

The Covid pandenric lras given people to think beyond the basic legal way and ro attempr ro galn Comp)aint no.27S of 2A2) -_ l PaEe 7 of 23 19.

HARERA GURUGRAI/ lc"*i^""zzm,ztlzi I financially at the cost of others.

The complainant has institutecl thc present false and vexatious complaint against the respondent company who has already fulfilled its obligation as defined under the allotment letter 03.02.2017 and already completed the construction anci cluly informed of it vide letter dated 26.03.2 01g.

It is pertinent to mentio n h ere that for the fair adjudication ofgrievance as alleged by the complainanr, detailed deliberation by leading the evidence and cross_examination is required, thus only the civil court has jurisdiction to deal with the cases requiring requiring detailed evidence for proper and Fair adjudication.

That the complainant purchased the commercial unit and issued an allotment letter with respondent company owing to the name, good will and reputation of the respondent company.

That it is a matter of record that the respondent duly paid the assured return of Rs .

4l,5g,667 / - tc tha complainant till September 2019.

Further the letter of completion ol construction of the unit was duly sent to the allottee on 2 6.03.20 1 U. l.ha t due to external circumstance which were not in control of th(, respondent, construction got deferred.

That even though the respondents suffered from setback due to external circumstances, yet the respondents managed to complete the construction, That the present compraint ofthe complainant has been filed on the basis of incorrect understanding of the ob,ect and reasons of enactment ot th0 RERA, Act, 2016.

The Legislature in its great wisdom, understanding thc catalytic role played by the Rear Estate sector in furfilling the needs and demands for housing and infrastructurc in the country, and the abscncc ofa regulatory body to provide professionarism and standardizatio, to the said sector and to address ail the conccrns of both buyers at)d 20.

Page 8 of 23 2L.

HI\RERA W* GURUGRAM promoters in the real estate sector, drafted and notified the Rlllt/, Act, 2016 aiming to gain a healthy and orderly growth of the industry. .1.he Act has been enacted to balance the interests of consumer and promoter by imposing certain responsibilities on both.

Thus, while Section l t to Section 18 of the RERA Act, 2016 describes and prescribes the funr:rion and duties ofthe promoter/Developer, Section 19 provides the rightsi and duties ofAllottees.

Hence, the RERA Act, 2016 was never intended to be biased legislation preferring the Allottees, rather the intent was to cnsu re that both the ailottee and the developer be kept at par and either ol thc party should not be made to suffer due to act and/or o t and/or omission of part of the other.

That the complainant is attempting to seek an advantage ofthe slon,down in the real estate sector and it is apparent from the facts of the present case that the main purpose of the present complaint is to harass the respondent by engaging and ignitjng frivolous issues with ult€rior motives to pressurize the respondent company.

Thus, the prescnr complaint is without any basis and no cause of action has arisen tiI date in favour of the complainant and against the respondent and hcnce, the complaint deserves to be dismissed.

That it is brought to the knowledge of this Hon,ble Authority that rhc complainant is guilty of placing untrue facts and is attempting to h idc thc true colour of the intention of the complainant.

That before buyrng the property, the complainant was aware of the status of the project and the fact that the commercial unit was only intended for lease and nevcr for physical possession.

22.

C",nel**;rsr2rlt l I'age 9 ol2 3 !A RAM lARE GURUG ,i; 23.

That, it is evident that the entire case of the complainant is nothing but a web of lies and the false and frivolous allegations made against the respondent are nothing but an afterthought, hence the present complaint filed by the complainant deserves to be dismissed with heavy costs.

24.

That the various contentions raised by the compiainant is fictitious, baseless, vague, wrong and created to misrepresent and mislead this Hon'ble Authority, for the reasons stated above.

That it is further submitted that none of the relief as prayed for by the complainant is sustainable, in the eyes of law.

Hence, the complaint is liable tc be dismissed with imposition of exemplary cost for wasting the pre(ious time and efforts ofthis Hon'ble Authority, That the present complaint is an utter abuse ofthe process of law, and hence deserves to be djsm,ssed.

25.

Copies of all the relevant documents have been filed and placecl orr thc record.

Their authenticity is not in dispute. n dispute.

Hence, the complaint can bc decided on the basis of these undisputed documents and submission made by the parties, E.

Jurisdiction ofthe authority 26.

The respondent has raised preliminary obiection regarding jurjsdiction of authority to entertain the present complaint.

The authority observcs that it has territorial as well as subject matter ,urisdiction to adjudicatc the present complaint for the reasons given below.

E.

I Territorial iurisdiction 27.

As per notification no.

1/92/2017-tTCp dared 14.12.20t7 issuecl by, Town and Country Planning Department, Haryana the jurisdictio n of lical Estate Regulatory Authority, Gurugram shall be entire Gurugram I)isIricr for all purpose with offices situated in Gurugram.

In the present case, the Complaint no 275 ol 2t22 l l'age 10 of 23 ffHARERA ffi,ounuennti,r @,1rr1?l:lr-r4-l project in question is situated within the planning area of Curugrant District.

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

E. lI Subiect-matter iurisdiction 28.

Section 11(4)(a) of the Acr, 2016 provides that the promorer shall bt: responsible to the allottee as per agreement for sale.

Section 1 1 (a)( a) is reproduced as hereunder: Section 11(4)(q) Be responsible for qll obligotions, responsibilities and functions under the provisions of this Act or the rules ontl regulations mode thereunder or to the allottees qs per the agreement fir sale, or to the ossociation of ollottees, os the case may be, till the conveyance of oll th.e oportments, plots or buildings, os the case moy be, to the aIlottees, or the common oreas to the association of oliottees or the competent authority, os the case may be; Section 34-Functions oI the Authority: 344 of the Act provides to ensure compliance oI the obligations cost upon the promoters, the allottees ond the real estote agents under this Act and the rules ond regulations mode thereunder.

29. under.

29.

So, in view of the provisions of the Act of 2016 quoted above, the authority has complete iurisdiction to decide the complaint regar,ling non-compliance of obligations by the promoter leaving asiclc compensation which is to be decided by the adiudicating officcr if pursued by the complainant at a later stage.

F, Findings on the relief sought by the complainant: F.l Assured return 30.

While filing the petition the claimant has sought assured returns on monthly basis as allotment letter at the rates mentioned therein.

It is pleaded that the respondent has not complied with the ternls ancl conditions of the allotment letter.

Though for some time, the amourt of Page 1 1 ol23 HARERA MGURUGRAM assured returns was paid but later on, the respondent refused to pay the same by taking a plea of the Banning of Unregulated Deposit Schemes Act, 2019 (herein after referred to as the Act of 2019J.

But that Act does not create a bar for payment of assured returns even after comlng into operation and the payments made in this regard are protected as pcr section 2(4)(iii) of the above-mentioned Act.

However, the plea of respondent is otherwise and who took a stand that though it paid the amount of assured returns upto the year 2 01g but did not pay the sanrc amount after coming into force of the Act of 2019 as it was declarcd illegal.

31.

The Act of 2016 defines ,,agreement for sale,, means an agreerncnt entered into between the promoter and the allottee [Section 2(cJ].

An agreement for sale is defined as an arrangement entered betwcen the promoter and allottee with freewill and consent of both the parties.

An agreement defines the rights and liabilities of both the part,es i.e., promoter and the allottee and marks the start of new contractual relationship between them.

This contractual relationship gives rjse to future agreements and transactions between them.

The different kincls of payment plans were in vogue and legal within the meaning of the agreement for sale. for sale.

One of the integral part of this agreement is thc transaction of assured return inter-se parties. ,Ihe ,,agreement for salc,, after coming into force of this Act (i.e., Act of 20161 shall be in the prescribed form as per rules but this Act of 2016 does not rewrite lhl. "agreement" entered between promoter and allottee prior to coming into force of the Act as held by the Hon,ble Bombay High Court in casc Neelkamal Realtors Suburban private Limited and Anr. v/s llnion o[ Complaint no.275 of 2022 Page 12 of 23 ffi HARER,T $- eunuennvr India & Ors., (Writ petition No.

2737 of 2017) decided on 06.12.2017.

Since the agreement defines the buyer-promoter relationship therefore, it can be said that the agreement for assured returns between the promoter and allottee arises out of the same relationship.

Therefore, it can be said that the real estate regulatory authority has conrplete jurisdiction to deal with assured return cases as the contractual relationship arise out of agreement for sare onry and between the same parties as per the provisions of section 1 1(4) (a) of the Act of Z0 t 6 wh ich provides that the promoter would be responsible for all the obligattons under the Act as per the agreement for sale tilr the execution of conveyance deed ofthe unit in favour of the allottee.

Now, three issLtcs arise for consideration as to: i.

Whether the authority is within its jurisdiction to vary its eariier stand regarding assured returns due to changed facts an.l circumstances. ii.

Whether the authority is competent to allow assured returns to the allottee in pre_REM cases, after the Act of 2016 came into operation, iii.

Whether the Act of2019 bars payment ofassured returns to tho allottee in pre-RERA cases 32.

While raking up the cases of Brhimjeet & Anr.

Vs.

M/s Landmark Apartments Pvt.

Ltd. (complaint no 141 of 2018), and Sh.

Bharam Singh & Anr.

Vs. & Anr.

Venetain LDF projecrs LLp,, [supra), ir was held by rhc authority that it has no iurisdiction to dear with cases ofassured returns.

Though in those cases, the issue of assured returns was involved to be paid by the builder to an allottee but at that time, neither the full tar:ts Complaint no.275 of2 I)age 13 of 23 ffi HARER,^.

H& eunuennr,,r liomel*--zzs "f ,0"1 were brought before the authority nor it was argued on beharf ot the allottees that on the basis of contractual obligations, the buil.ler is obligated to pay that amount.

However, there is no bar to take a diff€:rent view from the earlier one if new facts and law have been brought br:lbrc an adjudicating authority or the court.

There is a doctrine of.,prospectivc overruling" and which provides that the law declared by the court applics to the cases arising in future only and its applicability to the cases which have attained finality is saved because the repear wourd otherwise work hardship to those who had trusted to its existence.

A reference ir this regard can be made to the case of Sarwan Kumar & Anr Vs.

Maclan Lal Aggarwal Appeat [civilJ 1058 of 2003 dectded on 06.02.200u and wherein the hon,ble apex court observed as mentioned above.

So, now the plea raised with regard to maintainability ofthe complaint in the lace of earlier orders of the authority in not tenable.

The authority can take a different view from the earlier one on the basis of new facts and la,,v and the pronouncemenb made by the apex court of the land.

It is now well settled preposition of law that when payment of assured returns is paft and parcel of builder buyer,s agreement (maybe there is a ciause in that document or by way of addendum , memorandum of understanding or terms and conditions of the allotment of a unit), then the builder js liatrle to pay that amount as agreed upon and can,t take a plea that it is not lia hle to pay the amount of assured return. ed return.

Moreover, an agreement for salc defines the builder-buyer relationship.

So, it can be said that rhc agreement for assured returns between the promoter and an allotr:e arises out of the same relationship and is marked by the original agreement for sale.

Therefore, it can be said that the authontv hls l'age 14 of 23 HARERA gM GURUGRAI/ complete jurisdiction with respect to assured return cases as the contractual relationship arises out of the agreement for sale oniy and between the same contracting parties to agreement for sale.

In the casc in hand, the issue of assured returns is on the basis of contra,:tual obligations arising between the parties.

Then in case of pioneer urban Land and Infrastructure Limited & Anr. v/s Union of India & Urs.

IWrit Petition (Civil) No.

43 of 2019) decided on 09.08.2019, it was observed by the Hon'ble Apex Court of the land that ,,...allottees who had entr:rcd into "assured return/committed returns, agreements with these developers, whereby, upon payment of a substantiar portion of the total sale consideration upfront at the time of execution of agreement, the developer undertook to pay a certain amount to allottees on a monthlv basis from the date ofexecution ofagreement till the date of hand ing ovcr ofpossession to the alloftees,,.

It was further held that,amounts raised by developers under assured return schemes had the,,commercial effect of a borrowing' which became clear from the deveroper,s annuar returns in which the amount raised was shown as,,comm,tment charges,, under the head "financial costs,,.

As a result, such allottees were held to be ,,financial creditors" within the meaning of section 5(7) of the Code,, inclurling its treatment in books of accounts of the promoter and for the purpose:j of income tax.

Then, in the latest pronouncement on this aspect in c,,tsc Jaypee Kensington Boulevard Apartments werfare Association ard c,rs. vs.

NBCC (tndia) Ltd. and Ors. (24.03.2021_SC): MANU/ SC/0206 /zl. /0206 /zl.2j, the same view was followed as taken earlier in the case of pioneer Urban Land Infrastructure Ld & Anr. with regard to the allottees of assurt,ci returns to be financial creditors within the meaning ofsection S[7] ol thc t,omplaint no.275 ot 202? l ___l Page 15 of 23 SHARERA Seunuennt',r co.ptrint no.E orlo)i '1 l Code.

Then after coming into force the Act of 2016 w.e.f 01.05.201;z the builder is obligated to register the project with the authority bcing an ongoing proiect as per proviso to section 3 (1J of rhe Act of 2017 read wirh rule 2(ol of the Rules, 2017.The Act of 2016 has no provision for rc_ writing of contractual obligations betlveen the parties as held b1, the Hon'ble Bombay High Court in case Neelkamal Realtors Suburban pri!,atc Limited and Anr. v/s Union of India & Ors., (supral as quoted earljcr.

So, the respondent/buirder can't take a prea that there was no contractuar obligation to pay the amount of assured returns to the allottee aftcr thc Act of 201,6 came into force or that a new agreement is being executcd with regard to that fact.

When there is an obligation of the promcter against an allottee to pay the amount of assured returns, then he can,t wriggle out from that situation by taking a plea ol the enforcement of r\ct of 2016, BUDS Act 2019 or any other law.

33.

It is pleaded on behalf of respondent/builder that after the tsanning of Unregulated Deposit Schemes Act of2019 came into force, there is bar for payment of assured returns to an allottee.

But again, the plea taken r n this regard is devoid of merit.

Section 2(4) of the above mentioned Act defines the word , deposit, as an omount of money received by woy oj.on advance or loon or in any other form, by any deposit toker with a profiise to return whether after a specified period or otherwise, either in cash or jn kind or in the form of a specified service, with or without anJ benefit in the form of interest, bonus, profit or in any other form, but does not tnclLtde l. nclLtde l. on amount received in the coursc of ar f^r th- andbearingagenr,rrr"rr:::;::r"l::rf ;::,:r::::rii:;!;;^'"tt ii. advance received in connection with consideration of an frimorrtte Page 16 of23 HARERA P*GURUGRAM property under on agreement or arrongement subject to the condition thot such odvance is adjusted against such immovable properry as specifred in terms ofthe ogreementor arrongement.

34.

A perusal of the above-mentioned definition of the term ,deposit, shows that it has been given the same meaning as assigned to it under the Companies Act, 2 013 and the same provides under section 2 [31) includes any receipt by way of deposit or loan or in any other form by a company but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India.

Simiiarly rule Z[cJ ol the Companies (Acceptance of Deposits] Rules, 2014 defines the meanrnla ot deposit which includes any receipt of money by way of deposit o r loa n or. in any other form by a company but does not include. i. as a advance, accounted for in ctny monner whatsoever, received in connection with consideiation for an immovable pro perty tt. as dn odvance received and as allowed by any sectoral reguldtor or in accordance with directions oftentrat or State Government; So, keeping in view the above-mentioned provisions of the Act of 2ll.l9 and the Companies Act 2013, it is to be seen as to whether an allottec is entitled to assured returns in a case where he has deposited subst,lntial amount of sale consideration against the allotment of a unit wjth the builder at the time of booking or immediately thereafter and as agr,:cd upon between them.

The Government of India enacted the Banning of Unregulated Deposjt Schemes Act, 2019 to provide for a comprehensive mechanism to ban the unregulated deposit schemes, other than deposits taken in the ordin try course of business and to protect the interest of dcpositors and for 2t Complaint no.27 5 of 2022 36. f 2022 36.

I'age 17 of 23 HARERA MGURUGRAM matters connected therewith or incidental thereto as defined in secl.ion 2 (4J ofthe BUDS Act 2019 mentioned above.

37.

It is evident from the perusal of section 2t4)(l)(ii) of thc abovc mentioned Act that the advances received in connection with consideration of an immovable property under an agreemerLt or arrangement subiect to the condition that such advances are adjusted against such immovable property as specified in terms of the agreement or arrangement do not fall within the term of deposit, which have been banned by the Act of 201,9.

38.

Moreover, the developer is also bound by promissory estoppel.

A:; psr this doctrine, the view is that if any person has made a promise and the promisee has acted on such promise and altered his position, then thc person/promisor is bound to compry with his or her promise. when the builders failed to honour their commitments, a number of cases rverc filed by the creditors at different lorums such as Nikhil Mehta, pioneer Urban Land ond lnfrastructure which ultimately led the ccntral government to enact the Banning of Unregulated Deposjt Scheme 1\ct, 2019 on 31.07.2019 in pursuant to the Banning of Unregulated Deprosit Scheme Ordinance,201g.

However, the moot question to be decided is as to whether the schemes floated earlier by the builders and pronusrng as assured returns on the basis of allotment of units are covered by the abovementioned Act or not.

A similar issue for consideration arose be forc Hon'ble RERA panchkula in case Baldev Gautam VS Rise projects Privdte Limited (REM_qKL_2068-2079) where in it was held on ],1.03.2020 that a builder is iiable to pay monthly assured returns to rhO Complaint ro.27, of ZO22 Page 18 of 23 HARERA P_ GURUGRAI\,I complainants tilr possession of respective apartments stands handed over and there is no illegality in this regard.

39. egard.

39.

The definition ofterm ,deposit,as given in the BUDS Act 2019, has rhc same meaning as assigned to it under the Companies Act 2013, a:; pc.r section 2(41(ivJ(i) i.e, explanarion to sub-clause (ivl.

In pursuant ro powers conferred by clause 31 ofsection 2, section 73 and76 read with sub-section 1 and 2 ofsection 469 ofthe Companies Act 2 013, thc Fulcs with regard to acceptance of deposits by the companies were framed in the year 2014 and the same came into force on 01 .04.2 014.

The deli n itio n of deposit has been given under section 2 (c) of the above_mentjoned Rules and as per clause xii [b), as advance, accounted for in any manner whatsoever received in connection with consideration for an imntovablc properry under an agreement or arrangement, provided such advanr:c is adjusted against such property in accordance with the termsi or agreement or arrangement shall not be a deposit. .lhough there is pr-ovrso to this provision as well as to the amounts received under heading .a, and 'd' and the amount becoming refundable with or without interest due to the reasons that the company accepting the money does not h:rve necessary permission or approval whenever required to deal in the goods or properties or services for which the money is taken, then the anroLrnt received shall be deemed to be a deposit under these rules.

HoweVCr, tho same are not applicable in the case in hand.

Though it is contended that there is no necessary permission or approval to take the :;ale consideration as advance and would be considered as deposit as per sub clause 2(xv)(b) but the plea advanced in this regard is devoid of me,rrt.

First ofall, there is exclusion clause to section 2 (xivJ[b] which provitlcs Complaint no.275 of 2022 .] Page 19 ol 23 &- HARERA GURUGRAM that unless specifically excluded under this clause.

Earlier, the deposits received by the companies or the builders as advance were consjdered as deposits but w.e. f .

29.06. f .

29.06.2016, it was provided that the money received as such would not be deposit uniess specifically excluded under rhis clause.

A reference in this regard may be given to clause 2 of the First schedule of Regulated Deposit Schemes framed under section 2 (x,,/) of the Act of 2019 which provides as under:_ (2) The following shall also be treated as Regulated Deposit Schemes under this Act namely:- fo) deposits accepted under any scheme, or an arrangcmenl registered with any reguratory body in India constituted or established under a statute; and fbJ any other scheme as may be notified by the Central covernment under this Act.

40.

The money was taken by the builder as deposit in advance aga nst allotment of immovabre property and its possession was to bc offcrcd within a certain period.

However, in view of taking sare consideration by way of advance, the builder promised certain amount by way of assu rcd returns for a certain period.

So, on his failure to fullil that commrrmcnt, the alrottee has a right to approach the authority for redressar of his grievances by way of filing a complaint.

41.

It is not disputed that the respondent is a real estate d eveloper, a nd it had not obtained registration under the Act of 2016 for the prolect rn question.

However, the project in which the advance has been receivcd by the developer from the allottee is an ongoing project as per sectron 3 (1) of the Act of 2016 and, the same would fall within the ju risdiction of Lomplaiot no.275 of 20? ) l _l l'age 20 of 23 *HARERA Hb ounuennrvr the authority for giving the desired rerief to the comprainant besiriL,s initiating penal proceedings. so, the amount paid by the complainant to the buirder is a regulated deposit accepted by the later from the former against the immovable property to be transfeffed to the allottee later on.

42. er on.

42.

0n consideration of documents available on record and subnrissions made by parties, the complainants have sought assured return on monthly basis as per one of the provisions of alotment retter at tr)e agreed rates.

It was agreed that as per allotment letter, the developcr would pay assured return to the buyer Rs. g0/- per sq. tt. upro 3 years from the date of booking or unit is put on lease whichever js earlicr.

Though for some time, the amount ofassured returns was pajd but latL.r on, the respondent refused to pay the same by taking a plea of tho Banning of Unregulated Deposit Schemes Act, 2 019.

But that Act docs nor create a bar for payment of assured returns even after conring into operation and the payments made in this regard are protected as per section 2(4)(iii) ofthe above_mentioned Act.

43.

Accordingly, the promoter is liabre to pay assured return of the unpaid period as specified under the allotment letter dated 03.02.2017.

As per the statement of account on page no.

39 of reply, an amount ot Rs.

41,,59,667 / - was already paid by the respondent to the com ptarn r n t may be adjusted while making the payment ofassured return.

F.II Direct the respondent to execute a conveyance deed for the unit of the complainant and to handover the physical/symbolic possession of the unit booked by the complainant(s) to him, complete and ready in all respects, Co"r,pla nl no.27S ot 2r?) i -_l PaEe 2l of 2J HARERA P*GURUGRAI\,,1 44.

Section 17 (L) of the Act deals with dury of promoter to ger: thc conveyance deed executed and the same is reproduced below: "77.

Transfer of title.- (1).

The promoter shall execute o registered conveyance deed in favout of the allottee along with the undivided proportionate tttle in the common oreos to the ossociotion of the allottees or the competent authority, as the case may be, and hond over the physicol possession of the plot, oportment ofbuilding, os the cose moy be, to the allottees and the common areos to the qssociation of iation of the allottees or the competent quthoriq), os the case may be, in q real estate project, ond the other title documents pertaining thereto within specif;ed period as per sonctioned plons as provided under the locol laws: Provided thot, in the absence of ony locol lqw, conveyance deed tn fovour of the allottee or the associotion of the ottottees or the competent outhority, as the case may be, under this section shall be carried out bv the promoter within three months from date of issue oy orruponry certificote_" 45.

As OC of the unit has not been obtained, accordingly conveyance der:d cannot be executed without unit come into existence for which conclu sivc proof of having obtained OC from the competent authority and filing of deed ofdeclaration by the promoter before registering authority.

G.

Directions ofthe authority 46.

Hence, the authority hereby passes this order and issue the following directions under section 37 ofthe Act to ensure compliance of obligatio ns cast upon the promoter as per the function entrusted to the authcrrity under section 34(fJ: i.

The respondent is directed to pay the arrears of amount ot assured return at agreed rate to the complainant(s.) from October 2018 till October 2019.

The respo ndent/p ro mo te r is directed to adjust the amount of assured return as already paid.

C-"plrlr*,or?5 "f20rt- i Page 22 of 23 HARERA GURUGRANI Complaint no.275 of 2022 ii.

The respondent is also directed to pay the outstanding accrued assured return amount till date at the agreed rate within 90 days from the date of order after adjustment of outstanding dues, if any, from the complainant and failing which that amount would be payable with interest @g.Z5o/o p.a. till the date of actuat realization. iii.

The Authority directs the respondent/builder to get the buyer,s agreement executed between the parties within 15 days. iv. days. iv.

The respondent shall execute the conveyance deed ofthe allotted unit within the 3 months from the final offer of possession along with OC upon payment of requisite stamp duty as per norms ol the state government v.

The respondent shall not charge anything from the complainant(s] which is not the part of the agreement of sale.

47.

Complaints stand disposed ol 48.

File be consigned to registry.

Haryana Real Estate Regulatory Authority, Gurugram Dated: 01.09.2023 hleev Kumar Arora) l>a9e 23 of 23 Member