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Judgment
A Complaint in Form M was filed on 21.12.2020 by Sh. Rahul Gyanchandani (hereinafter referred to as "Complainant") stating that he booked a penthouse flat in Respondents project 'LA Tropicana', Khyber Pass, Civil Lines, Delhi. A Flat Buyer Agreement (hereinafter referred as "Agreement or FBA") was signed between the Complainant and the Respondents on 21.08.2007 for the penthouse flat bearing no. 701: PH-1 in Tower 17 having an approximate saleable/ super built up area of 9550 sq.ft. (equivalent to 887.2 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 flat was Rs. 6,16,19,950/- (Rupees Six Crore Sixteen Lakh Nineteen Thousands Nine Hundred Fifty Only) calculated @ Rs.6452.35 per sq. ft. of saleable. As per clause 2(a) of the FBA, the super built up area can 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 with the Agreement. The details of all payments made by the Complainant to the Respondents area as given below:-
| S. No | Date of payment | Amount Paid by the Complainant |
| 1. | 29-05-2007 | Rs.60,00,000/- |
| 2. | 29-04-2010 | Rs.94,85,985/- |
| 3. | 03-08-2007 | Rs.30,80,997.50/- |
| 4. | 24-06-2010 | Rs.30,80,997.50/- |
| 5. | 13-19-2011 | Rs.38,29,653/- |
| 6. | 12-01-2012 | Rs.3,13,64,858.90/- |
| 7. | 29-01-2014 | Rs.2,93,126/- |
| 8. | 29-01-2014 | Rs.2,93,126/- |
| Total Payment | Rs.6,04,28,744/- |
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 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 Respondents offered to pay.
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 or Act”] and Respondents were directed to file reply to the request so made by the Complainant. 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 has already registered these projects on 16.03.2022. Considering these facts, the Authority specifically asked the Ld. Counsel for the Complainant to confirm whether he 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 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:
a. The Complainant has not signed any MoU with the Respondents. The office bearers of the RWA who signed the MoU are not even the allottees in the project.
b. The Complainant is not a party to the MoU signed between the LTRA and the Respondents.
c. That the area of the flat promised has been reduced considerably from 9550 sq.ft. to about 2500 sq.ft.
d. The Complainant has waited for more than 14 years since the Respondents executed the Agreement on 20.08.2007 and more than 09 years after he paid Rs.6,04,28,744/- (Rupees Six Crore Four Lakh Twenty Eight Thousand Seven Hundred Forty Four only) to them.
e. As per current status of Tower-17, the Respondents are not in a position to execute title documents or/and give possession of the unit having saleable area of 9550 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 9550 sq. ft. cannot be forced to receive a unit of size 2500 sq.ft.
f. 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.
g. As per section 14 of RE (RD) Act, 2016 sanctioned building plans cannot be changed without the consent of 2/3rd of flat buyers. The Complainant has never given the consent for change in the sanctioned plan of the unit allotted to the Complainant. 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.
h. In the interest of real estate project and its allottees, this Hon’ble Authority should conduct an inquiry about the reasons and manner of LTRA entered into MoU with the Respondents and take appropriate action against the persons acting on behalf of Respondents.
The arguments and submissions made on behalf of the Respondents are summarized as under:
a. 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 further amended on 20.10.2020 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 and 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.”
b. The Complainant even if not a member of the LTRA is bound by the terms of the MoU as per Hon’ble NCDRC’s order dt. 30.4.2019 which has further been upheld by the Hon’ble Supreme Court. Thus, the Agreement executed with the Complainant ceases to be in effect. In terms of the aforesaid MoU, Respondents are now bound to hand over the possession of the unit within extended timeline. The period of handing over the possession of the unit is not over and the Respondents are willing to handover the possession of the unit to the Complainant within the stipulated new timeline.
Ld. Counsel for the Respondents during the course of hearing held on 28.04.2022 submitted that the Hon’ble NCDRC vide their order dt.16.02.2022 has ordered that the “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 Authority considered this order of Hon’ble NCDRC and only after its consideration 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 received a sum of Rs.6,04,28,744/- (Rupees Six Crore Four Lakh Twenty Eight Thousand Seven Hundred and Forty Four 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/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 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.”
As per the MoU singed between the LTRA and the Respondents on 30.04.2019 which was amended subsequently through addendum MoU dt. 27.10.2020 and later modified as per consent application moved before Hon’ble NCDRC decided and allowed on 16.02.2022, all phases of the projects are required to be completed by 31.03.2023.
We have gone through the contents of aforementioned MoU, Addendum and Consent Application and also orders of Hon’ble NCDRC dt. 11.09.2019 and 16.02.2022. Ld. Counsel for Complainant though argued that the Complainant is not a party to MoU between LTRA and the promoter but in the rejoinder to reply of the Respondents, it is mentioned that the Complainant became member of the association by paying the subscription fees. In our opinion, orders of Hon’ble NCDRC are applicable to all allottees including the Complainant so far as consent of 2/3rd allottees under section 14(2)(ii) of RE(RD) Act, 2016 and revised date of completion of all 3 phases of project are concerned.
Since, NCDRC has made the MoU, Addendum and Consent Application applicable to all the allottees of the project vide order dt. 16.02.2022, we are of the opinion that the Complainant cannot seek remedy under section 18(1) of RE(RD) Act, 2016. The orders of Hon’ble NCDRC, however, do not affect the bilateral agreement signed between the Respondents and the allottees.
We recognize that in this case the Complainant is seeking refund not only on account of delay in handovering the possession of the penthouse flat but also on account of change in size and location of penthouse flat. To adjudicate the issue of change in the size and location of the penthouse flat we need to look into sections 12 and 14(2)(i) of the RE(RD) Act, 2016.
Section 12 of the RE(RD) Act, 2016 casts a duty upon the promoter to provide correct and updated information to the allottees. 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.”
From the perusal of the Flat Buyer Agreement and the project documents submitted by the Respondents to the Authority it is evident that the Complainant was initially allotted penthouse bearing no. 701 in Tower-17 on 7th and 8th floors with super built up area of 9550 sq. ft. and now he is being allotted penthouse on 9th and 10th floors having a carpet area of 4449.19 sq. ft. with balcony area of 848 sq. ft. and terrace area of 405 sq. ft. We understand that generally, the super built up area to carpet area ratio remains as 100:70. Even, if we give benefit of doubt to the Respondents regarding change in area of the flat, they should have taken consent of the Complainant for changing the floors of the penthouse flat.
Ld. Counsel for Respondents has argued that all receipts of deposits issued after 2010, mention clearly the penthouse (i.e. PH-1) and thus, there is no concealment of any fact. We have noticed that though the receipts mention penthouse (PH) but they do not mention the floors of the penthouse flat. The Respondents could not show any communication made to the Complainant informing about the change in the floor of the penthouse flat. The Respondents never informed the Complainant about the increase in height of tower and change in the floor of the penthouse flat to 9th and 10th floors from 7th and 8th floors.
Section 14(2)(i) of RE(RD) Act, 2016 mandates that the promoter shall take consent of the allottee before making any changes in the unit allotted to him/her. The text of this section is given 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.”
A home buyer invests his hard earned money to buy a house in any housing project after ascertaining the size, location and the cost. The home buyer cannot be forced to accept a flat of changed location and size, different from the one that was agreed upon at time of booking, unless allottee agrees for such change. A home buyer has every right to withdraw from the project if there is change in location or layout plan or specifications or nature of fixtures, fittings and amenities in respect of the apartment/ flat allotted to him/her without his/her previous consent. We note, here in this case, the Respondents did not take any consent of the Complainant before changing the floors of the penthouse as per the mandate of section 14 (2)(i) of RE(RD) Act, 2016.
In view of the above, we are of the opinion that though the Complainant is not entitled for refund under section 18(1) of RE(RD) Act, 2016 but he is eligible for refund of the deposits made by him with Respondents along with interest as per section 12 read with section 14(2)(i) of RE(RD) Act, 2016.
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).
Since, the Respondents changed the flat size & dimensions without the consent of the Complainant, we direct the Respondents M/s Parsavnath Land Mark Developers Pvt. Ltd. to refund the entire amount of Rs.6,04,28,744/- (Rupees Six Crore Four Lakh Twenty Eight Thousand Seven Hundred and Forty Four Only) to the Complainant, Mr. Rohit Gyanchandani 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 and to the date of its order.
The case is disposed of accordingly.
No order as to costs.