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Judgment
A complaint was filed in FORM „M‟ on 08.04.2024 by Mr. Ambarish Chandra Chaubey and Ms. Seema Chaubey (hereinafter referred to as “Complainants”) under section 31 r/w section 18 of RE (RD) Act, 20161 stating that they booked a 2BHK Apartment in the housing project, „CSSOS Officers Enclave‟ (hereinafter referred to as „Project‟) promoted by Central Secretariat Services Officers Society (hereinafter referred to as “Respondents” or “Respondent Society”) in L Zone, Dwarka, New Delhi. The Complainants submitted that the Respondents being in the position of authority misused their position to defraud the Complainants of their hard-earned money. The Complainants have now filed the present complaint, alleging delay and fraudulent conduct by the Respondent Society and thus are seeking a refund of the amounts paid.
The Respondents through Welcome Letter dated 01.06.2017 confirmed their membership and welcomed them as a new resident of proposed “CSSOS Officers Enclave” project.
The Complainants submitted that they paid a total of Rs. 19,09,125/- (Rupees Nineteen Lakhs Nine Thousand One Hundred Twenty five only) to the Respondents in eight instalments for the proposed flat in their project “CSSOS Officers Enclave” and thus are claiming the refund for the same amount.
A preliminary hearing in the case was held on 03.06.2024. Notice to the Respondents was issued on 10.06.2024 through registered post and via email.
In spite of the service of various notices, the Respondents did not file a reply to the complaint. Also no one appeared for the Respondents during the hearings held on various dates. Therefore, vide order dated 29.07.2025, the Authority decided to proceed ex-parte due to repeated absence of the Respondents on various dates.
We have perused the documents available on records and heard the arguments of the Ld. Counsel of the Complainants.
Analysis and Consideration:
A perusal of the documents available on record shows that eight receipts were issued by the Respondents to the Complainants comprising the payments as follows:
| S. No. | Date of Receipt | Amount paid |
|---|---|---|
| 1. | 31.05.2017 | Rs. 3,91,875/- |
| 2. | 31.05.2017 | Rs. 3,73,875/- |
| 3. | 31.05.2017 | Rs. 11,000/- |
| 4. | 31.05.2017 | Rs. 19,000/- |
| 5. | 16.06.2017 | Rs. 82,500/- |
| 6. | 04.07.2017 | Rs. 82,500/- |
| 7. | 05.06.2018 | Rs4,60,375/- |
| 8. | 05.06.2018 | Rs. 4,88,000/- |
| Total | Rs. 19,09,125/- |
Hence, a total payment of Rs. 19,09,125/- (Rupees Nineteen Lakhs Nine Thousand One Hundred Twenty five only) by the Complainants to the Respondents is a recorded fact.
The Complainants have placed on record copies of Membership Certificate and receipts which clearly show that the Respondents collected money for constructing flats in their project “CSSOS Officers Enclave”.
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 by the Registrar of Societies. 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).]”
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 the housing project have, on the face of it, committed fraud on the members and general public.
The RE (RD) Act, 2016 has been enacted to induce professionalism and standardization in the real estate sector, paving the way for catalyzing investments and accelerating growth of the sector in the long run. To achieve these objectives, the Act created a Regulatory Authority to supervise the conception, initiation and completion of a real estate project. The RE (RD) Act, 2016 is a special law enacted to address issues in the real estate sector. Therefore, all disputes between homebuyers/allottees and promoters/developers relating to any real estate project covered under RE (RD) Act of 2016, can be raised before the concerned Real Estate Regulatory Authority (RERA). Section 79 of the RE (RD) Act, 2016 even bars jurisdiction of civil courts to entertain any suit or proceeding in respect of any matter which the Authority is empowered under the Act to determine. Moreover, section 89 of RE (RD) Act, 2016 says that provisions of this Act shall have an overriding effect on anything inconsistent in any other law in force.
An exhaustive definition of "promoter" is provided under section 2(zk) of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as “RE (RD) Act, 2016 or Act”) which is reproduced below:
2. (zk) “promoter” means, -
i)a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or
ii) a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or
iii) any development authority or any other public body in respect of allottees of-
(a)buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or
(b)plots owned by such authority or body or placed at their disposal by the Government, for the purpose of selling all or some of the apartments or plots; or
iv) an apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its members or in respect of the allottees of such apartments or buildings; or
v)any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or
vi) such other person who constructs any building or apartment for sale to the general public.
Explanation. - For the purposes of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the persons who sells apartments or plots are different persons, both of them shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified, under this Act or the rules and regulations made thereunder;
Furthermore, the issue of whether a Society falls under the preview of the RE (RD) Act, 2016, has been thoroughly discussed by the Hon‟ble Real Estate Appellate Tribunal („REAT‟), Delhi, in its order dated 12.05.2023, in the case titled Jeevan Ashray Welfare Society Vs. Diwakar Garg. The relevant paragraph of the said order rewards as follows:
"14.The appellant society by no stretch of imagination is a welfare society even though their registration is under the Societies Registration Act, 1860. The registration of the appellant society, as also similarly placed Cooperative Societies under the Multistate Cooperative Societies Act or the Societies Registration Act or similar such enactment, despite their sole or primary object being to develop land and construct apartments, is clearly an abuse of the process of law for escaping other stringent statutes which make them accountable to the buyers as also the Regulatory Authorities. As noted above, despite opportunities, appellant was not able to show any activity of the Society which could be termed as a welfare activity. The sole intent of the registration of this and similarly placed societies is to develop land and construct apartments and in the process to enrich themselves inappropriately by tweaking, twisting or abusing the law, which cannot be permitted under the garb of an argument that the appellant and similarly placed societies are not „promoter‟ within the meaning of section 2(zk) solely for reasons of their registration under the Societies Registration Act or the Multistate Cooperative Societies Act or similar such enactments.
15.A literal interpretation of the definition of promoter under section 2(zk) itself is clear and apparent, notably sub-clause (iv) which provides for an Apex State Level Cooperative Housing Finance Society and a Primary Cooperative Housing Finance Society, similar to the appellant society, which constructs apartments or buildings for its Members to be a promoter. Section 2(zg) of the Act, which defines the word „Person‟ used while defining the word „Promoter‟, reinforces the above position of law. The appellant society is registered under the Societies Registration Act, 1860 and their activity as a society is confined to constructing a „real estate project‟, as defined under Section 2 (zn) comprising apartments for its members. The appellant society has a large number of members, who have been solicited for membership on assurances of a plot of land on a share of plot of land and an apartment to be constructed by the society. The appellant society admits having purchased land for development and construction of apartments and such activity makes them amenable to the Real Estate (Regulation and Development) Act, 2016 and for prior registration of their project under Section 3 of the Act at the appropriate stage. The context of the activities of the appellant has been shown on record by way of documents that the members have been assured of a constructed apartment and that the respondents have deposited moneys with the appellant from time to time as per the demands raised by the society. The contours of the activities and the conduct of the appellant does make them fall within the ambit of the definition of promoter as provided in Section 2 (zk) of the Act. Even though, we are not examining the felicity or correctness of their registration under the Societies Registration Act, but their amenability to the Real Estate (Regulation and Development) Act, 2016 cannot be doubted. Even the elaborated definition of the word „Person‟ used to define the promoter, as given in Section 2(zg) categorically includes in its fold a cooperative society registered under any law relating to cooperative societies, as also an association of persons or body of individuals, whether incorporated or not, thus shutting the door to prevent unscrupulous persons from hiding under the garb of their registration under any other law relating to cooperative societies.
16.In view of the aforesaid discussion, the contention of the appellant that it is not a promoter as defined under the Act and that they are not amenable to RERA jurisdiction, is rejected and the finding of the Authority that appellant is a „Promoter‟ within the meaning of Section 2(zk) of the Act, is upheld.”
It is clear from the above that Respondents comes under the jurisdiction of Authority and also squarely falls within the definition of “Promoter” as given under Section 2(zk) of the RE (RD) Act, 2016.
It must be appreciated that 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 Complainants intend to withdraw from the said project and are seeking refund of the amount paid to Respondents in respect of subject unit under sections 18(1) and 12 of the RE(RD) Act, 2016 on account of delay and misrepresentation of facts by the promoter. These sections read 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. Obligations of the 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 Complainants but also misled them by concealing information that the society cannot undertake housing activity and they do not have any approved land for the project.
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. The legislature has taken a conscious decision 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).
On perusal of the documents on record and submissions made by both the parties, we are of the view that the Respondents are in contravention of the sections 18 and 12 of RE (RD) Act, 2016. As such, the Complainants are entitled to get the refund of the amount paid by him along with the interest at prescribed rate @ 10.80% 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, „Central Secretariat Services Officers Society (CSSOS)‟ to refund the entire amount of Rs. 19,09,125/- (Rupees Nineteen Lakhs Nine Thousand One Hundred Twenty five only) to the Complainants, Mr. Ambarish Chandra Chaubey and Ms. Seema Chaubey within 45 days of issuance of this order along with interest at the rate of 10.80% 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.