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Judgment
A complaint in Form M was filed on 21.12.2020 by Mr. Murlidhar Gyanchandani (hereinafter referred to as "Complainant") stating that he booked a flat in Respondents project 'LA Tropicana', Khyber Pass, Civil Lines, Delhi. A Flat Buyer Agreement (hereinafter referred to as "Agreement or FBA") was signed between the Complainant and the Respondents on 21.08.2007 for the residential villa flat bearing no. Tower 20-V2 having an approximate saleable/ super built up area of 9615 sq.ft. (equivalent to 893.255 sq.mtrs.) consisting of 5 bedrooms, drawing/ dining, kitchen, toilets and balconies.
The Complainant submitted that as per the Agreement, the basic price of the villa flat was Rs.5,88,34,790/- (Rupees Five Crore Eighty Eight Lakh Thirty Four Thousand Seven Hundred and Ninety Only) calculated @ Rs.6119.063 per sq. ft. of saleable area. As per clause 2(a) of the Agreement, the super built up area could be reduced or increased corresponding to actual final measurement on completion of the flat/complex.
The Complainant paid Rs.60,00,000/- (Rupees Sixty Lakh Only) on 29.05.2007 as per Payment Plan A attached to the Agreement. The details of all payments made by the Complainant to the Respondents are as given below:-
| S. No | Date of payment | Amount Paid by the Complainant |
| 1. | 29-05-2007 | Rs.60,00,000/- |
| 2. | 18-08-2007 | Rs.9,00,000/- |
| 3. | 18-08-2007 | Rs.9,00,000/- |
| 4. | 18-08-2007 | Rs.9,00,000/- |
| 5. | 18-08-2007 | Rs.3,00,000/- |
| 6. | 29-11-2007 | Rs.86,50,437/- |
| 7. | 18-04-2011 | Rs.30,38,149/- |
| 8. | 03-10-2011 | Rs.30,38,147/- |
| 9. | 12-01-2012 | Rs.3,31,76,579/- |
| 10. | 29-01-2014 | Rs.2,78,289/- |
| 11. | 12-03-2014 | Rs.2,78,289/- |
| Total payment | Rs.5,74,59,890/- |
As per clause 11 of the Agreement, the Respondents were required to complete construction of flat within a period of 36 months from the date of commencement of construction of particular tower in which the flat is located after receipt of sanction of building plans and all other requisite approvals with a grace period of six (6) months. This was subject to “force majeure” including any restrictions from any Authority etc.
The Complainant in Form-M has sought refund of the entire amount along with 12% interest as the Respondents have neither completed the project nor refunded the money as per clause 7(b) of the FBA which is reproduced as below:
“In case for any reasons the whole or any part of the project is abandoned and/or the flat agreed to be transferred herein is deleted and by reasons thereof the developer is not in a position to give possession of the flat, the buyer shall have no claim of any kind, whatsoever, against the developer except to the refund of the amount paid with simple interest @ 12% per annum till the date of refund.”
A preliminary hearing in this case was held on 27.01.2021. On the request of the Ld. Counsel for the Complainant, case was adjourned to 02.02.2021. On 02.02.2021, a notice was issued to the Respondents alongwith a copy of the complaint. The Ld. Counsel for the Respondents filed an application on 10.03.2021 for rejection of the complaint. On that day, he also submitted that he will also file reply to the complaint. The case was posted for further hearing on 06.04.2021. On 06.04.2021, the Respondents were directed to file reply by 09.04.2021 and the case was posted for further hearing on 18.05.2021.
Due to Covid-19 Pandemic Second Wave, the case could be heard further only on 26.8.2021. During the course of hearing, Ld. Counsel for the Respondents submitted that he could file the reply to the complaint only on 12.04.2021 and requested for taking it on record. The delay in filing of the reply was condoned with a cost of Rs.5,000/- to be paid to the Complainant. However, the Complainant refused to accept cost when tendered by the Respondents.
The case was subsequently heard on 10.11.2021 and Ld. Counsel for the Complainant was advised to make a formal request to the Authority for seeking refund under section 18 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred as RE(RD) Act, 2016) and Respondents were directed to file reply to the request made by the Complainant. The Respondents filed reply on 24.11.2021 to the request made by the Complainant on 16.11.2021. The matter was further heard on 25.11.2021, 27.01.2022 and 24.02.2022 and the case was reserved for orders.
While this case was reserved for orders, the office brought to the notice of the Authority that the Complainant has filed three new applications on 23.12.2021 with respect to the projects ‘Parsvnath LA Tropicana Phase-I, Phase-II and Phase-III’ with similar prayers as follows:
(i)Consider the application of the developer namely Parsvnath Landmark Developer Pvt. Ltd. seeking registration of the Phase-II of Project LA Tropicana, Civil Lines, Khyber Pass, Delhi in light of the fact that Applicant has never given any “no objection” or approval to any change in Building Plans in terms of Section 14 of the Real Estate (Regulation and Development) Act, 2016.
(ii)Conduct an inquiry into facts and circumstances under which LA Tropicana Resident Welfare Association have executed MoU dated 30.04.2019 and subsequently amended MoUs dated 27.10.2020 and 30.04.2019 with the Respondents.
(iii)Pass such other further order as this Hon’ble Authority may deem fit in the interest of Justice.
The Authority considered these applications and in the interest of natural justice decided to re-hear the case on 28.04.2022. On 28.04.2022, the Authority perused the files pertaining to registration of above mentioned three projects and observed that the Authority registered all these projects on 16.03.2022. Considering these facts, the Authority specifically asked the Ld. Counsel for the Complainant to confirm whether the Complainant would still like to have refund or would like to continue with the project. Ld. Counsel for the Complainant informed the Authority that the Complainant would like to have a refund alongwith interest as per the Agreement. The case was again reserved for orders.
We have heard the arguments and perused the records. For the sake of convenience, the arguments and submissions made on behalf of the Complainant are summarized as under:
The Complainant has not signed any MoU with the Respondents and the office bearers of the RWA who signed the MoU are not even the allottees in the project. The Complainant is not a party to the MoU signed between the La-Tropicana Residents Association (LTRA/RWA) and the Respondents.
That the area of the villa flat promised has been reduced considerably.
The Complainant has waited for more than 14 years for villa flat since the Respondents executed the Agreement on 21.08.2007 and more than 09 years after he paid Rs.5,74,59,890/- (Rupees Five Crore Seventy Four Lakh Fifty Nine Thousand Eight Hundred Ninety Only) to them.
As per current status of Tower-20, the Respondents are not in a position to execute title documents or/and give possession of the unit having saleable area of 9615 sq.ft. The allottee under no circumstances can be forced to wait for possession of unit which does not exist and will not come into existence. Any person who has paid the entire agreed sale consideration of property admeasuring 9615 sq. ft. cannot be forced to receive a unit of lesser size.
The terms of bilateral Agreement can be changed with the consent of parties only. The basic principle of law is that terms of any bilateral contract can be changed only with the consent of both parties to the agreement and not by any third party or even by any court or authority. Therefore, neither the LTRA nor the Hon’ble National Consumer Disputes Redressal Commission (NCDRC) nor the Hon’ble High Court has any power or authority to change or vary the terms of the contract between him and Respondents. Since, Hon’ble NCDRC had no jurisdiction to pass any judgment in rem, their order will neither be binding upon the Complainant nor the Authority.
As per section 14 of RE (RD) Act, 2016 no promoter can change the sanctioned building plans without the consent of 2/3rd of allottees. The Complainant has never given his consent for change in the sanctioned plan of the unit allotted to him. The Complainant has paid entire sale consideration to the Respondents and not to any other person or entity such as LTRA. The Complainant has neither appointed LTRA as his agent nor authorized it to take any decision on his behalf.
The arguments and submissions made on behalf of the Respondents are summarized as under:
The delay in construction of the project was under discussion by the promoter with the LTRA since long and the matter was also being adjudicated by Hon’ble NCDRC. The LTRA entered into an MoU dated 30.04.2019 which was later amended on 27.10.2020 and subsequently on 16.02.2022 through a Consent Application. Hon’ble NCDRC passed final orders in this matter on 30.04.2019. The relevant text of this order is reproduced below:
“We have gone through the MoU and find that all the issues/grievances raised, or which may arise in future, by the Complainant have been settled between the Parties. Therefore, in our considered opinion, we direct that this settlement (MoU) shall be applicable to an binding on all the allottees of LA Tropicana Resident Welfare Association, Magazine Road, Khyber Pass, Delhi-110054 and even the persons, who may be subsequently allotted flats in the said Project and no Consumer Fora, created under the Consumer Protection Act, 1986 shall entertain any Complaint or any proceedings in respect of this Project. The amount in the dedicated accounts as mentioned in the MoU of different phases will be converted in Escrow Account, which shall be operated by two representatives of the Parties, i.e., either of one of the Joint Signatories of LA Tropicana Resident Welfare Association, who have signed the MoU, and a representative of M/s Parsvnath Landmark Developers Pvt. Ltd.”
The Respondents moved a consent application seeking extension of time line for completion of project as 31.03.2023. Hon’ble NCDRC after considering this application ordered on 16.2.2022 as follows :
“Terms of MoU/Addendum Agreement/Consent Application will be applicable to all allottees of the project and it will be considered as their consent for any approval/re-approval of plans from competent authority as per terms of MOU/AA/Consent and specific consent for RERA registration of the project.”
The Complainant, though his name figures in the list of LTRA members even if not a member of the LTRA is bound by the terms of the MoU/Addendum and consent application as per Hon’ble NCDRC’s orders dt.30.4.2019 and 11.09.2019. In view of these orders, the Flat-Buyer Agreements executed with the Complainant ceases to be in effect. In terms of the aforesaid MoU, Addendum and Consent Application, Respondents are now bound to hand over the possession of the unit within extended timeline, i.e., 31.03.2023. The period of handing over the possession of the unit is not over and the Respondent is willing to handover the possession of the unit to the Complainant within the stipulated new timeline, i.e., 31.3.2023.
The Authority has considered the orders of Hon’ble NCDRC and only after their consideration have registered all the three Projects, i.e., Parsvnath LA Tropicana Phase-I, Phase-II and Phase-III as standalone project on 16.03.2022.
Analysis and Consideration:
A perusal of the documents available on the record shows that the Respondents have received a sum of Rs.5,74,59,890/- (Rupees Five Crore Seventy Four Lakh Fifty Nine Thousand Eight Hundred Ninety Only) on various dates from the Complainant and is a recorded fact.
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/home 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 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.”
Provided 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 of the possession, at such rate as may be prescribed.
(2)The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed, in the manner as provided under this Act, and the claim for compensation under this subsection shall not be barred by limitation provided under any law for the time being in force.
(3)If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act.”
The Ld. Counsel for the Respondents submitted that as per the MoU, Addendum and Consent Application, the construction work of the project will be completed in accordance with revised timelines given to this Authority. He further submitted that Hon’ble NCDRC has taken the MoU, Addendum and Consent Application signed by the Respondents with LTRA on record. And, in its order dated 16.02.2022 has stated that the Amended Agreement dated 27.10.2020 and Consent Application shall be binding on all the allottees of “La-Tropicana Project”. He further argued that the delay in completion of the project is on account of inter-se dispute between the Government agencies which could be finally resolved only in the year 2019.
From the contentions raised before us following issues arise for adjudication:
Whether Complainant is entitled for refund under section 18 of RE(RD) Act, 2016;
Whether section 14 (2)(ii) of the RE(RD) Act, 2016 has been violated by the promoter by making additions/alterations without consent of 2/3rd of allottees;
Whether section 14(2)(i) of the RE(RD) Act, 2016 has been violated by the promoter by reducing or altering the size or changing location of the villa flat.
It was argued that as per Flat Buyer Agreement, the Respondents have violated section 14 (2)(ii) of the RE(RD)Act, 2016 as the Complainant has not given any consent for change in the sanctioned building plans. Section 14 (2)(ii) of RE(RD) Act, 2016 is reproduced as below:
“Section 14. Adherence to sanctioned plans and project specifications by the promoter.-
(1)The proposed project shall be developed and completed by the promoter in accordance with the sanctioned plans, layout plans and specifications as approved by the competent authorities.
(2)Notwithstanding anything contained in any law, contract or agreement, after the sanctioned plans, layout plans and specifications and the nature of the fixtures, fittings, amenities and common areas, of the apartment, plot or building, as the case may be, as approved by the competent authority, are disclosed or furnished to the person who agree to take one or more of the said apartment, plot or building, as the case may be, the promoter shall not make-
(i)any additions and alterations in the sanctioned plans, layout plans and specifications and the nature of fixtures, fittings and amenities described therein in respect of the apartment, plot or building, as the case may be, which are agreed to be taken, without the previous consent of that person:
Provided that the promoter may make such minor additions or alterations as may be required by the allottee, or such minor changes or alterations as may be necessary due to architectural and structural reasons duly recommended and verified by an authorised Architect or Engineer after proper declaration and intimation to the allottee.
Explanation. - For the purpose of this clause, "minor additions or alterations" excludes structural change including an addition to the area or change in height, or the removal of part of a building, or any change to the structure, such as the construction or removal or cutting into of any wall or a part of a wall, partition, column, beam, joist, floor including a mezzanine floor or other support, or a change to or closing of any required means of access ingress or egress or a change to the fixtures or equipment, etc.
(ii)any other alterations or additions in the sanctioned plans, layout plans and specifications of the buildings or the common areas within the project without the previous written consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in such building.
Explanation. - For the purpose of this clause, the allottees, irrespective of the number of apartments or plots, as the case may be, booked by him or booked in the name of his family, or in the case of other persons such as companies or firms or any association of individuals, etc., by whatever name called, booked in its name or booked in the name of its associated entities or related enterprises, shall be considered as one allottee only.
(3)In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, it shall be the duty of the promoter to rectify such defects without further charge, within thirty days, and in the event of promoter's failure to rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation in the manner as provided under this Act.”
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).
The contention of the Complainant is that there has been a considerable delay in completion of the above mentioned unit of the project. As per clause (11) of the FBA, the Respondents had to deliver the possession within 36 months with grace period of six months. It is an admitted fact that the possession could not be given within time frame given in the FBA. Ld. Counsel for the Respondents have argued that on account of inter-se dispute between government agencies, the project was stalled and it could start only in the year 2019. He has further submitted that an association was formed by the home buyers in LA Tropicana named as “La Tropicana Residents Association (LTRA)”. This Association had filed a complaint before the Hon’ble NCDRC. During the pendency of the complaint, a Memorandum of Understanding (MoU) was signed by the Association and the promoter. This MoU was executed on 30.04.2019 which was further amended on 27.10.2020. It is submitted that as per the amended agreement, the date of delivery of possession was 24 months from the date of Amended Agreement, i.e., 27.10.2020. He further submitted that subsequently a Consent Application was filed before the Hon’ble NCDRC, by both the parties, inter alia, seeking extension of time of completion of the project upto 31.03.2023. Hon’ble NCDRC vide its order 16.02.2022 allowed the Consent Application. Thus, by virtue of the said Consent Application, the date of completion of the project stood extended upto 31.03.2023.
We have gone through the copy of the Consent Application which was moved before the Hon’ble NCDRC and the order passed thereon on 16.02.2022, which is as under:
“4.Terms of MoU/ Addendum Agreement/ Consent Application will be applicable to all Allottees of the project and it will be considered as their consent for any approval/re-approval of plans from competent authority as per terms of MoU/AA/Consent and specific consent for RERA registration of the project. In this view of the matter, no order is required to be passed on the Application filed by the Complainant.”
Ld. Counsel for the Complainant argued that since he is not the member of the LTRA (although his name is seen included in the list attached with the MoU,Addendum and Consent Application) and, therefore, orders of the Hon’ble NCDRC are not binding on him. However, a perusal of the rejoinder filed by the Complainant clearly shows in paragraph-5 that he had made payment towards membership fee of this Residents Welfare Association in 2015. Thus, it means that the Complainant is a member of the Association, therefore, the order the Hon’ble NCDRC would be binding on him as well.
The terms of any bilateral agreement between the home buyer and the promoter will remain effective despite the registration of the on-going project as per section 3 of the RE(RD) Act, 2016 by the Authority. The promoter while submitting application for registering an on-going project under section 4 (2)(l)(c) can give a fresh time line for completion of the project. So a question arises which time limit for completion of the project will be applicable, the one which was given in the bilateral agreement or one which is given by the promoter at the time of registering the on-going project. In the case of Neelkamal Sub-urban & Ors. Vs. UOI in Writ Petition No.2737 decided on 06.12.2017, the Hon’ble Bombay High Court while considering the right of a home buyer to seek refund under section 18 and the effect of section 4 (2)(l)(c) of the RE(RD) Act, 2016 made the following observations:
“Section 4 (2)(l)(c) enables the promoter to revise the date of completion of project and hand over possession. The provisions of RERA, however, do not re-write the clause of completion or handing over possession in agreement for sale. Section 4 (2)(l)(c) enables the promoter to give fresh time line independent of time period stipulated in the agreement for sale entered into between him and the allottees so that he is not visited with penal consequences laid down under RERA.”
It is clear from the above judgment that in case of extended time line given by the promoter at the time of registration of its on-going project, the allottee/home buyer can seek withdrawal from the project on the basis of his bilateral agreement.
However, the facts of the present case are different. The LTRA, of which the Complainant became a member by subscribing to its membership in 2015 had entered into the agreement with the promoter, thereby, extending the time line for completion of the project. The Hon’ble NCDRC is very categorical in saying that the terms of the MoU,Addendum and Consent Application will be applicable to all the allottees. Therefore, we are of the considered view that the Complainant is also bound by the MoU, Addendum and Consent Application and the revised time line given by promoter therein to complete the project, which is 31.03.2023.
As per section 14(2)(ii) consent of 2/3rd of the allottees is mandatory for any alteration/additions in the sanctioned building plans, lay out plans, specifications of the buildings or the common areas within the project. Ld. Counsel for the Complainant has argued that his client never gave his consent for modifications or changes to the sanctioned building or lay out plans. As we have observed earlier, the LTRA had entered into an agreement with the promoters on 30.4.2019 which was modified on 27.10.2020 and 16.02.2022. The Hon’ble NCDRC have categorically stated that the terms of MoU, Addendum Agreement and Consent application will be applicable to all the allottees of the project and their consent will be considered as a specific consent for RERA registration of the project. Thus, the Complainant cannot claim that there was violation of section 14(2) (ii) of the Act.
The contention of the Complainant that the size of his flat has been considerably reduced does not appear to be correct. As per FBA executed on 21.08.2007, the Complainant was allotted 9615 sq. ft. of saleable area/super area in Villa-2 in Tower-20 of the project. During the course of arguments, it was submitted by the Ld. Counsel for the Respondents that there is no change in the area of Villa-2 allotted to the Complainant. The Respondents have furnished details of area of Villa-2 in Tower-20 in the documents submitted with their application for registration of project. The Respondents have mentioned that the carpet area of Villa-2 in Tower-20 is 6728.25 sq. ft. with balcony area of 917 sq. ft. We take note of the general rule that super area is generally about 30% more than the carpet area. By applying this general rule, we found that the carpet area with balcony area works out to be almost same as given in the FBA. The Complainant has not given any details as to how size of his Villa flat has been reduced. In the written arguments also he has mentioned the super area/saleable area of Villa flat as 9615 sq. ft. However, he has not specified how much area is now being given and how much is the reduction in the size of flat. The Ld. Counsel for the Complainant also could not offer any reasonable explanation in this regard except the claim that the size of the Villa has been reduced. Thus, we are of the considered view that the Complainant was not able to substantiate his claim that the Respondents have reduced the size of his Villa-2 in Tower-20. So, we do not find any violation of section 14(2)(i) as well.
As per MoU, Addendum and Consent Application which have been approved by the Hon’ble NCDRC, the period of completion of Tower-20 is 31.03.2023 and these agreements constitute a consent under section 14 (2)(ii) of the RE(RD) Act, 2016. Since, the date of completion for Tower-20 is not yet over, we are of the view that it would be premature to give any relief of refund to the Complainant at this stage. However, if Respondents are not able to provide the subject Villa flat to the Complainant on or before the mutually agreed date as per the amended Consent Application, i.e., 31.03.2023, he will be at liberty to file a fresh complaint seeking relief u/s 18 of the RE(RD) Act, 2016.
In view of the above, the Authority dismisses the complaint.
No order as to costs.
File may be consigned to Record Room.