AI Structured Summary
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Judgment
A complaint was filed in FORM ‘M’ on 13.09.2021 by Mr. Adarsh Aggarwal (hereinafter referred to as “Complainant”) under section 31 r/w section 18 of RE (RD) Act, 20161 stating that he took membership of the Jeevan Ashray Welfare Society (hereinafter referred to as “Respondents” or “Respondent Society”) and paid Rs. 8,15,500/-(Rupees Eight Lakh Fifteen Thousand Five Hundred Only) in the years 2012 and 2014 on different dates towards membership fees and land charges to the Respondents.
The Respondent Society had promised to develop their housing project under the Delhi Development Authority’s (DDA) Land Pooling Policy. The Complainant submitted that the Respondents did not start the project even after 8 years since launch. Therefore, the Complainant seeks refund of amount deposited with Respondents along with interest.
A preliminary hearing in the case was held on 07.12.2021 and a notice to the Respondents was issued on 16.12.2021.
The matter was heard on 07.12.2021, 22.02.2022, 26.04.2022, 19.07.2022, 08.09.2022 and 15.09.2022.
The Respondents were directed vide order dated 07.12.2021 to file reply by 27.01.2022. Since, the Respondents did not file reply by 27.01.2022, the Authority imposed a cost of Rs.25,000/- on them for not filing the reply vide order dated 22.02.2022. The Respondents finally filed a reply on 25.04.2022 and moved an application for waiver of cost imposed upon them by the Authority vide order dated 22.02.2022. Ld. Counsel for Respondents submitted that he could not appear on 22.02.2022 as he was sick but could not communicate his inability to appear on behalf of the Respondents. After considering the grounds mentioned in the application Authority decided to waive of the cost.
We have heard the arguments and perused the records. For the sake of convenience, the arguments and submissions made on behalf of the Respondents are summarized as under:
The Respondents are a society registered under the Societies Registration Act, 1860 and therefore RERA, NCT of Delhi does not have jurisdiction to adjudicate in this matter.
The basic purpose of society is to provide land to its members on no-profit and no-loss basis in terms of Delhi Development Authority’s Land Pooling Policy floated under Master Plan of Delhi (MPD) 2021. It was never an objective of the society to earn profit from the members.
The members contributed their share to purchase the agricultural land way back in 2012 and waited to follow the development of Land Pooling Policy of DDA.
The members made payments towards the ‘land cost’ only which was utilized towards the purchase of land which is wrongly projected as booking amount for flat.
The land purchased with the amount received from members have been registered on DDA's registration portal at the first available opportunity and all the members are waiting for further directions and instructions from DDA.
Analysis and Consideration:
A perusal of the documents available on record shows that the Respondents have issued three receipts dated 16.12.2012 and 29.01.2014 acknowledging deposits of Rs. 2,500/-, Rs. 6,48,000/- and Rs. 1,65,000/- respectively. Hence, payment of Rs. 8,15,500/- (Rupees Eight Lakh Fifteen Thousand Five Hundred Only) by the Complainant to the Respondents is a recorded fact.
After hearing the arguments and having gone through the records of the case, we notice that the Respondent Society is registered under Societies Registration Act, 1860 vide registration no. 1307/SDM/NW/2012 by the Registrar of Societies, North-West District, Govt. of NCT of Delhi. No Society registered under the Societies Registration Act, 1860 can undertake housing as an activity considering the provision made under section 20 which is reproduced as under:
“20.To what societies Act applies.—The following societies may be registered under this Act:— Charitable societies, the military orphan funds or societies established at the several presidencies of India, societies established for the [promotion of science, literature, or the fine arts for instruction]*, the diffusion of useful knowledge, 1[the diffusion of political education], the foundation or maintenance of libraries or reading-rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collections of natural history, mechanical and philosophical inventions, instruments, or designs.”
State Amendment
*Section 20 (Delhi) in The Societies Registration Act, 1860
“ —In section 20, for the words “promotion of science, literature, or the fine arts”, substitute the words “promotion of social welfare, activities conducive to the promotion and improvement of the natural environment (including forests, rivers and wild life), compassion for living creatures, literature, science, sports, games or the fine arts”. [Vide Act 26 of 1983, sec. 2(c) (w.r.e.f. 22-6-1983).]”
On perusal of the Memorandum of Society, under the heading aims and objects it is mentioned at serial no. 40 the objective stated is "To provide the low cost housing to the society members at no profit no loss basis". The main argument of the Respondent Society is that they were planning to construct the houses for their members as social welfare activity and not for commercial purpose. This argument cannot stand scrutiny of law as any activity for own benefit cannot be termed as social welfare activity.
Another argument of the Respondents that they purchased land for submitting to DDA under Land Pooling Policy, can also not be justified as the Respondent Society by virtue of its registration under Societies Registration Act, 1860 cannot undertake housing as an activity.
The Respondents, a Society registered under Societies Registration Act, 1860, though not authorized to undertake “housing” activity; advertised membership, misled the people, made members for their housing project and collected monies from them & therefore, would come under the purview of RE (RD) Act, 2016. The Respondents by collecting the monies in the name of housing project have, on the face of it, committed a fraud on the members and general public.
The statement of objects and reasons of RE(RD) Act, 2016 clearly states that the Act attempts to balance the interests of consumers and promoters by imposing certain responsibilities on both. It also seeks to establish symmetry of information between the promoter and purchaser, enhance transparency of contractual conditions, set minimum standards of accountability and a fast-track dispute resolution mechanism.
An allottee/house buyer can seek refund of amount invested with promoter under section 18 of RE(RD) Act, 2016, if the promoter fails to complete project by the date specified in agreement to sale with interest including compensation and also under section 12 of RE(RD) Act, 2016 if he/she was misled by any information furnished by promoter with regard to the proposed project either through advertisement or otherwise.
In the present complaint, the Complainant intends to withdraw from the said project and is seeking refund of the amount paid to Respondents in respect of subject unit under section 18(1) of the RE(RD) Act, 2016 on account of delay which reads as under:
“Section 18. Return of amount and compensation.-
18(1). If the promoter fails to complete or is unable to give possession of an apartment, plot, or building,
(a). in accordance with the terms of the agreement for sale or, as the case 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 shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act.”
Section 12 of the RE(RD) Act, 2016 casts a duty upon the promoter to provide correct and updated information to allottees regarding the project. It reads as under:
“Section 12. Obligations of promoter regarding veracity of the advertisement or prospectus.-
Where any person makes an advance or a deposit on the basis of the information contained in the notice advertisement or prospectus, or on the basis of any model apartment, plot or building, as the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under this Act:
Provided that if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, or the model apartment, plot or building, as the case may be, intends to withdraw from the proposed project, he shall be returned his entire investment along with interest at such rate as may be prescribed and the compensation in the manner provided under this Act.”
The Respondents, in complete disregard to their duties, not only failed to furnish correct information to the Complainant but also misled him by concealing information that the society cannot undertake housing activity.
The law is well settled that the allottees/homebuyers hold an unqualified right to seek refund of the amount with interest at such rate as may be prescribed in this behalf. A conscious decision has been taken by the legislature to cast an obligation upon the promoter to refund the amount on demand along with interest at rate prescribed. It has also been held through the recent judgments of the Hon’ble Supreme Court that the Regulatory Authority has exclusive jurisdiction to direct refund of the amount, and interest on the refund amount to the allottees. (Vide: Imperia Structures Ltd. Vs. Anil Patni and Another, 2020 (10) SCC 783, and Newtech Promoters and Developers Pvt. Ltd. v. State of UP And Ors. LL 2021 SC 641).
During the course of hearing, the Authority directed the Deputy Commissioner, Economic Offence Wings (EOW) Delhi Police, to conduct an inquiry and submit a report as to how this society was registered under Societies Registration Act, 1860 and allowed to undertake housing activity and collect monies from its members on the pretext of constructing flats/apartments. Sub-Inspector Nikhil Singh, Section-2, EOW filed a status report on 09.09.2022 stating that at present total five complaints against the Respondent Society have been received and investigation is in progress and will be concluded in the due course of time. However, the EOW proceedings initiated against the Respondent Society do not bar this Authority to direct the Respondents to refund the monies deposited to the allottees.
On perusal of the documents on record and submissions made by both the parties, the Authority is of view that the Respondents are in contravention of the sections 18 and 12 of RE (RD) Act, 2016. As such, the Complainant is entitled to get the refund of the amount paid by him alongwith interest at prescribed rate @ 10% p.a. (i.e., MCLR plus 2%) as per provisions of section 18 and 12 of RE (RD) Act, 2016 read with Rule 15 of the NCT of Delhi RE(RD) (General) Rules, 20162.
In the light of the aforesaid, we consider it appropriate to direct the Respondents, the Jeevan Ashray Welfare Society to refund the entire amount of Rs. 8,15,500/-(Rupees Eight Lakh Fifteen Thousand Five Hundred Only) to the Complainant, Mr. Adarsh Aggarwal within 45 days of issuance of this order along with interest at the rate of 10% per annum (MCLR+2%) from the date of payment of each sum until the date of its actual return.
The case is disposed of accordingly.
No orders as to costs.