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Judgment
A complaint was filed in FORM ‘M’ on 30.07.2021 by Ms. Nisha Gupta (hereinafter referred to as “Complainant”) stating that she booked office space bearing unit no. 991, 9th floor, “Vegas Mall”, Dwarka City Centre, New Delhi, developed by M/s Pratham Infrastructure Pvt. Ltd (hereinafter referred as “Respondents”) . An ‘Agreement to Sale’ was duly executed on 18.03.2020 between the Complainant and the Respondents. As per the Agreement, total cost of office space was Rs. 68,00,000/- (Rupees Sixty Eight Lakh Only). The Complainant paid full amount towards the cost of office space through RTGS on different dates to the Respondents.
The grievance of the Complainant is that the allotment has been cancelled by the Respondents without any intimation to the Complainant, any formal cancellation letter, without any cause or deficiency on the part of the Complainant. It is further stated that the Respondents subsequent to cancellation of the allotment refunded the entire money by way of transfer of amount in her account on 20.05.2021.
After the cancellation of the allotment and receiving the amount in her account, she contacted the Respondents. But they did not provide any worthwhile reason for cancellation and insisted that if the Complainant wants the space back she will have to pay current market price which is much higher than the price settled with the Complainant earlier.
The Complainant has claimed that the Respondents cancelled the allotment arbitrarily and without any intimation to the Complainant.
The Complainant, therefore, has sought following reliefs:
Direct the Respondents to provide peaceful possession of the office space booked by the Complainant.
Direct the Respondents to accept the reversal of the refund and execute conveyance deed of the allotted property in favour of the Complainant.
Direct the Respondents to pay compensation to the Complainant on account of delay in handing over possession.
Direct the Respondents to pay Rs. 10 lakh on account of mental tension, agony and harassment and;
Direct the Respondents to make payment of Rs. 1 lakh to Complainant towards litigation expenses.
A preliminary hearing in this case was held on 23.09.2021 and a notice to the Respondents was issued on same date.
The matter was heard in several hearings dated 23.09.2021, 30.11.2021, 18.01.2022, 19.01.2022 and 02.03.2022. The Respondents filed their reply on 28.02.2022. As per order dated 05.04.2022, the final written submission was filed by the Respondents on 18.04.2022 and by the Complainant on 20.04.2022.
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 project ‘Vegas Mall’ was registered with this Authority vide Registration No. DLRERA2018P0001 dated 05.01.2018 and was completed on 17.10.2019, much before the schedule date of completion i.e., January 2021.
The Complainant is sister-in-law of one of the Directors of the Respondent Company namely Sh. Harsh Vardhan Bansal.
The amount deposited by the Complainant was refunded as voluntarily requested by her husband who sought refund of the amount through whatsapp messages on 14.05.2021 and 18.05.2021.
The amount was, accordingly, refunded / transferred back to the account of Complainant through RTGS on 20.05.2021. The Respondents have placed on record a screenshot of WhatsApp Chat stated to be between Sh. Harsh Vardhan Bansal and Sh. Suresh Kumar Gupta to show that a request for refund was indeed made by Sh. Suresh Kumar Gupta.
Sh. Suresh Kumar Gupta had earlier booked a unit in the same project in December 2017 and later got that cancelled on his own. It is stated that the Complainant has concealed the fact that the Complainant is real sister-in-law of Sh. Harsh Vardhan Bansal. For concealment of the material facts, the complaint is not maintainable.
The Complainant made full deposit towards cost of subject space voluntarily and there was no demand from the Respondents. The Complainant through her husband sought refund voluntarily. Considering the relationship between the Complainant and Sh. Harsh Vardhan Bansal, one of the Directors of the Respondent Company, no documentation was done before giving the refund.
The Complainant filed the rejoinder reiterating the facts mentioned in the complaint and admitting relationship with Sh. Harsh Vardhan Bansal. With regard to WhatsApp Chat the Complainant stated that is not admissible piece of evidence. With regard to booking of space in December 2017, the fact was admitted by the Complainant but she cited different reason for cancellation.
Analysis and Consideration:
A perusal of the documents available on record shows that the Complainant deposited Rs. 33,00,000/- on 24.02.2020, Rs. 34,00,000/- on 25.02.2020 and Rs. 32,000/- on 16.03.2020 with the Respondents and deposited in Govt. Account Rs. 68,000/- as T.D.S. Hence, payment of Rs.68,00,000/- (Rupees Sixty Eight Lakh Only) by the Complainant to the Respondents is a recorded fact.
The payment of Rs. 68,00,000/- minus the T.D.S. at rate of the 1% was made by the Complainant to the Respondents towards the consideration for allotment of office space in “Vegas Mall”, before the “Agreement for Sale” dated 18.03.2020. The amount deposited by the Complainant was refunded/transferred to her account by Respondents through RTGS on 19.05.2021 / 20.05.2021.
The Authority has to consider and decide: (i) whether the cancellation of allotment of office space and refund made by the Respondents was as per the ‘Agreement of sale’ dated 18.03.2020 executed between both the parties and the provisions of RE (RD) Act, 20161 (ii) whether request made by husband of Complainant can be considered as request made by the Complainant.
To decide on this issue the relevant terms of the ‘Agreement of sale’ and the provisions of RE (RD) Act, 2016 are considered.
Clause 7.5 of the ‘Agreement for sale’ dated 18.03.2020 executed between the Complainant and Respondents gives a right to the allottee to cancel or withdraw allotment. It reads as under:-
“Cancellation by Allotee: The Allottee shall have the right to cancel / withdraw his allotment in the Project as provided in the Act: provided that where the allottee proposes to cancel / withdraw from the project without any fault of the promoter, the promoter herein is entitled to forfeit the booking amount paid for the allotment. The balance amount of money paid by the allottee shall be returned by the promoter (in the proportion of the amounts received by it) to the allottee within 45 days of such cancellation.”
The Respondents claim that they made refund to the Complainant on the basis of WhatsApp request made by Sh. Suresh Kumar Gupta to Sh. Harsh Vardhan Bansal. This WhatsApp Chat shows that Sh. Suresh Kumar Gupta is reminding Sh. Harsh Vardhan Bansal regarding transfer of money via RTGS and later Sh. Bansal informing that refund is being made.
Clause 9.3 of the Agreement dated 18.03.2020 deals with default by the allottee and consequences thereof and entitles the promoter to cancel the allotment. It reads as under :
9.3“The Allottee shall be considered under a condition of Default, on the occurrence of the following events: (i) In case the Allottee fails to make payments for 2 consecutive demands made by the Promoter as per the Payment Plan annexed hereto, despite having been issued notice in that regard the allottee shall be liable to pay interest to the promoter on the unpaid amount at the rate prescribed in the Rules.
(ii)In case of Default by Allottee under the condition listed above continues for a period beyond two consecutive months after notice from the Promoter in this regard, the Promoter may cancel the allotment of the Apartment Unit in favour of the Allottee and refund the amount money paid to him by the allottee by deducting the booking amount and the interest liabilities and this Agreement shall there upon stand terminated. Provided that the promoter shall intimate the allottee about such termination at least thirty days prior to such termination.”
Section 11(5) of the RE(RD) Act, 2016, provides how an allotment can be cancelled by the promoter. It reads as under:-
“11(5) …..The promoter may cancel the allotment only in terms of the agreement for sale: provided that the allottee may approach the Authority for relief, if he is aggrieved by such cancellation and such cancellation is not in accordance with the terms of the agreement for sale, unilateral and without any sufficient cause.”
A bare reading of the above provision would make it clear that cancellation of allotment either by allottee or the promoter can only be in terms of the ‘Agreement for Sale’ executed between promoter / builder and allottee. The Complainant in this case could seek cancellation/withdrawal of her allotment as provided in clause 7.5 of agreement and the provisions of RE(RD) Act, 2016. But if such withdrawal is without any fault of promoter, the booking amount paid for allotment is liable to be forfeited, and balance amount can be returned. The Respondent Company could have cancelled allotment and refund amount paid by allottee, if the allottee had failed to make payment of two consecutive demands made by promoter and this default continues for two consecutive month after the notice from promoter in this regard. Section 11(5) of RE(RD) Act, 2016 gives right to an allottee to approach the Authority if the cancellation is; (i) not in accordance with the terms of ‘Agreement of Sale’; (ii) it is unilateral; (iii) without any sufficient cause.
The Respondents Company claims that request for cancellation of allotment was made by the father of the Complainant. The communication on which the Respondents Company is relying upon is simply a WhatsApp Chat between Sh. Suresh Kumar Gupta who is stated to be husband of Complainant, Ms. Nisha Gupta and Sh. Harsh Vardhan Bansal. This WhatsApp Chat shows that Sh. Suresh Kumar Gupta is reminding Sh. Harsh Vardhan Bansal regarding some transfer via RTGS but this conversation in WhatsApp Chat does not indicate that it is with regard to the cancellation of allotment of office space to the Complainant in Vegas Mall. Moreover, there is no such demand made by the Complainant. Mr. Suresh Kumar Gupta who is stated to be husband of Complainant and also related to Sh. Harsh Bansal, is not privy to the agreement between the parties. It is the Complainant and the promoter who are bound by terms of agreement and not Mr. Suresh Kumar Gupta. There is no material to show that Mr. Suresh Kumar Gupta acted on behalf of the Complainants. An ‘Agreement to Sale’ has sanctity and any deviation with its terms and/or its revocation can only be with consent of parties not at instance of any third person.
Ld. Counsels for the Respondents argued that the Complainant and Sh. Harsh Vardhan Bansal, Director of Respondents Company are related to each other, therefore, no documentation was done regarding the refund. Here again, the Respondents are at fault. Once the parties have entered into an Agreement they have to abide by its terms. Section 11(5) of RE(RD) Act, 2016 says it in so many words that cancellation of allotment cannot be dehors the terms of Agreement.
The purpose of RE(RD) Act, 2016 is to bring transparency in the transaction between promoters and home / space buyers and to effectively protect their rights. Neither can bypass the provision of the RE(RD) Act. 2016.
Once an Agreement has been executed between the promoter and home/space buyer than cancellation of allotment could be done only as per the terms of the Agreement and the provisions in RE (RD) Act, 2016. The Respondent Company has not alleged violation of any obligation cast upon Complainant/allottee under section 19 of RE(RD) Act, 2016.
The Ld. Counsel of the Respondents stated that the ‘Agreement of Sale’ was executed on 18.03.2020, the refund was made on 19.05.2021 but the complaint was filed as after-thought on 30. 07.2021. He argued that if the Complainant had not sought cancellation or had any objection to the refund they should have raised the issue immediately with the Respondents. The Ld. Counsel for the Complainant, on the contrary, argued that they raised the issue with the Respondents Company regarding cancellation of the allotment verbally but when they were convinced that the objection to refund is not being entertained, the Complainant approached the Authority for appropriate remedy. The Complainant should have known the importance of raising the issue in writing and place on record. We definitely find fault on the complainant on this ground but at the same time we are of view that delay in approaching the Authority is not inordinate so as to divest her of the right to seek redressal of grievance under the Act.
The Complainant has also raised issue of violation of section 13 by the promoter. It has been stated that the Respondents Company took 100 % payment in advance before execution of the ‘Agreement to Sale’. The Section 13 (1) of RE(RD) Act, 2016 restrict the promoter not to take more than 10% of the cost of apartment / space prior to written ‘Agreement for Sale’. It reads as under:
“Section 13. No deposit or advance to be taken by promoter without first entering into agreement for sale.-
(1)A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.
(2)The agreement for sale referred to in sub-section (1) shall be in such form as may be prescribed and shall specify the particulars of development of the project including the construction of building and apartments, along with specifications and internal development works and external development works, the dates and the manner by which payments towards the cost of the apartment, plot or building, as the case may be, are to be made by the allottees and the date on which the possession of the apartment, plot or building is to be handed over, the rates of interest payable by the promoter to the allottee and the allottee to the promoter in case of default, and such other particulars, as may be prescribed.”
Ld. Counsels for the Respondents argued that the cost of office space was deposited by Complainants voluntarily and as such, Respondent Company did not raise any such demand.
Section 13(1) is a mandatory provision and imposes complete restriction on the promoter to “accept” more than 10% of cost home/apartment/space/ as advance payment or an application fee without entering into an Agreement for Sale. This is in consonance with the objective of the RE(RD) Act, 2016 to standardize business practices and transactions in the real estate sector. The Respondent Company is clearly in violation of section 13(1) of the RE(RD) Act, 2016. They cannot take the plea that deposit was made voluntarily because embargo is on “acceptance” by the promoter.
Having considered the facts of the case we are of the view that Respondent Company has violated the provision of section 13 (1) and section 11 (5) of the RE(RD) Act, 2016. Therefore, we issue following directions:-
The Respondents Company shall provide peaceful and vacant possession of shop / office space 991, block-B, 9th Floor, Vegas Mall, Dwarka City Center, New Delhi to Ms. Nisha Gupta and accept the reversal of sale consideration (which the Respondent Company has transferred in the bank account of the Complainant unilaterally) with interest accrued and shall execute the conveyance deed of the allotted shop / office space in favour of the Complainants within 45 days of this order.
For violation of the mandatory provision of section 13 (1) and for want of satisfactory explanation for such violation, we impose a penalty of Rs.1,00,000/- (Rupees One Lakh only) under section 61 of the RE(RD) Act, 2016, upon the Respondent Company with direction to deposit the penalty in “Bharat Kosh” within 45 days of this order.
The Complainant has also sought compensation under the RE(RD) Act, 2016. However for this relief the Complainant may approach the Adjudicating Officer of this Authority and file the complaint in Form ‘N’ as per the NCT Real Estate (Regulation and Development) Rules, 2016.
The case is disposed of accordingly.
No orders as to costs.
Footnotes
- 1.The Real Estate (Regulation and Development) Act, 2016