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Judgment
A complaint was filed in Form M on 03.12.2021 by Mr. Om Prakash Singh (hereinafter referred to as “Complainant”) stating that in the year 2015 he approached M/s Revanta Multi State Cooperative Group Housing Society Ltd. (hereinafter referred to as “Respondents or Respondent Society”) for booking of an apartment in the Respondents project namely “Smart Residency” in L-Zone, New Delhi (hereinafter referred to as “Project”).
The Complainant signed membership application form for a 2 BHK apartment of 1175 sq. ft. built up area at a total consideration of Rs. 35,00,000/- (Rupees thirty five lakh only). Out of which he paid Rs.14,20,900/- (Rupees fourteen lakh twenty thousand nine hundred only) to the Respondents by way of four cheques dated: 24.09.2015. The Respondents vide Welcome Letter dated 24.09.2015 confirmed his membership and welcomed him as a new resident of proposed project “Smart Residency”.
The Complainant submitted that the Respondents have failed to execute the flat buyer agreement and deliver the possession of the said flat even after lapse of 6 years from the date of booking. Therefore, he seeks refund of amount deposited with Respondents along with interest.
A preliminary hearing in the case was held on 23.12.2021 and a notice to the Respondents was issued on same date.
The matter was heard in several hearings dated 23.12.2021, 10.02.2022, 07.04.2022 and 31.05.2022. The Respondents filed reply on 05.04.2022. During the course of hearing held on 31.05.2022, the Ld. Counsel for the Respondents submitted that they have filed two applications as under:
Application under Order 1 Rule 10 CPC for impleading Delhi Development Authority (DDA) as party
ii) Application for correction in the name of the Authorized Representative of the Respondents.
The application under Order 1 Rule 10 CPC was dismissed on 11.05.2022 after hearing the submission of Ld. Counsel for Respondents as impleadment of D.D.A. was neither required nor desirable to decide the complaint as D.D.A. neither asked the Respondents to collect money for the subject project nor land pooling policy envisaged collection of money from general public on pretext of providing flats. The other application for correction in the name of the Authorized Representative was allowed.
We have heard the arguments and perused the records. For the sake of convenience, the arguments and submissions made on behalf of Respondents are summarized as under:
The Authority cannot adjudicate in the matter as the Respondent Society is registered under the Multi State Co-operative Societies Act, 2002 and does not come under the purview of RE (RD) Act, 20161 and further disputes between the parties should be referred to arbitration under section 84(1) of the Multi State Co-operative Societies Act, 2002.
The money taken from the Complainant was for land to be submitted to DDA under the land pooling policy and not for providing flats and apartments.
Analysis and Consideration:
A perusal of the documents available on record shows that the Respondents have received Rs.14,20,900/- (Rupees fourteen lakh twenty thousand nine hundred only) from the Complainant by way of four cheques dated: 24.09.2015 and is an admitted fact.
The RE (RD) Act, 2016 was enacted to induct professionalism and standardization in the real estate sector, thus paving way for accelerated growth and investments in the long run. The submission of Ld. Counsel of Respondents that RE (RD) Act, 2016 is not applicable in this case as Respondents are a Multistate Cooperative Group Housing Society registered under the Multi State Co-operative Societies Act, 2002, cannot be accepted. The RE (RD) Act, 2016 is a special law enacted to address issues in the real estate sector. All dispute between home buyers/allottees and promoters/developers of a real estate project, covered under the RE (RD) Act of 2016, can be raised before Real Estate Regulatory Authority (RERA). Section 79 of the RE (RD) Act, 2016 even bars the jurisdiction of civil courts to entertain any suit or proceeding in respect of any matter which this Authority is empowered by or under the RE (RD) Act, 2016 to determine. Moreover, Section 88 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. Section 84(1) of Multi State Co-operative Societies Act, 2002 cannot put fetters on the jurisdiction of Authority to decide disputes between promoters and homebuyers.
Further, in the RE (RD) Act 2016, an exhaustive definition of "promoter" is provided under section 2. The sub clause (iv) of clause (zk) of section 2 defines “promoter” as:
“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”
The Respondent Society is a Multi-State Co-operative Society, which advertised membership, made members for their housing project and collected monies from them. The Respondents thus, fall within the definition of “promoter” as defined in the RE (RD) Act, 2016. Therefore, the Authority has jurisdiction to adjudicate the matter and pass appropriate orders on the complaint.
The Ld. Counsel for Respondents has submitted that the monies collected were for purchase of land under the Land Pooling Policy of DDA and not for any flat or apartment. This argument is not tenable. The Respondents collected monies for housing project and purchase of land was a part of that Housing project. The Welcome Letter dated 24.09.2015 issued to the Complainant by the Respondents clearly mentions about project “Smart Residency” promoted by the society. Further, the “Payment Plan” mentions different categories of residential flats for which monies were collected by the Respondent Society. The aim and objective of Respondent Society, thus, was to raise housing project and the Complainant invested money and became members of Society for housing project and not for the purchase of land only. Therefore, the Respondents cannot shirk away from the obligation cast upon them by RE (RD) Act, 2016.
The statement of objects and reasons of the RE (RD) Act, 2016 clearly states that it attempts to balance the interests of consumers and promoters by imposing certain responsibilities on both. It seeks to establish symmetry of information between the promoter and purchaser, transparency of contractual conditions, sets minimum standards of accountability and a fast-track dispute resolution mechanism.
A homebuyer/allottee 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 on the ground of delay 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 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 duty upon the promoter to provide correct and updated information to allottees regarding the current status of the project and the likely date by which the project will be completed. 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, other members and general public by concealing information that the housing project cannot be developed on agricultural land proposed to be purchased by them. They did not disclose the risks associated with the project to the society members including the Complainant. The Respondents for their own benefit misinterpreted the land pooling policy of D.D.A and started collecting money from public in the name of providing flats. It is a pure simple case of giving part information and cheating.
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).
In the light of the aforesaid, we direct the Respondent Society, Revanta Multi State CGHS Limited to refund the entire amount of Rs.14,20,900/- (Rupees fourteen lakh twenty thousand nine hundred only) deposited with them to the Complainant Om Prakash Singh, within 45 days of issuance of this order along with interest at the rate of 10% per annum (i.e., MCLR+2%) from the date of payment of each sum until the date of its actual return.
The case is disposed of accordingly.
No order as to costs.
Footnotes
- 1.The Real Estate (Regulation and Development) Act, 2016