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Judgment
A complaint under section 31 in FORM ‘M’ of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as RE (RD) Act, 2016 or “Act”) was filed on 12.07.2019 by Ms. Maldeep Sidhu (hereinafter referred to as “Complainant”) against M/s CJ Infrastructure Pvt. Ltd., M/s Bhandari Infrastructure, Mr. Jaideep Bhandari, Mr. Jagdish Dhingra and Mr. Ramesh Wadhwa (hereinafter referred to as Respondents 1 to 5 respectively), stating that the above mentioned advertised and developed a commercial complex by the name “Metroplex East” on Plot No.21, District Centre, Laxmi Nagar, Delhi (hereinafter referred to as “Project”).
The Complainant, vide allotment letter dated: 23.07.2012, booked shop bearing No. 101 and 102 having area of 651.18 sq. ft. and 434.54 sq. ft., respectively, on first floor of the project at total consideration of Rs. 2,02,26,963/- (Rupees two crore two lakh twenty six thousand nine hundred sixty three only), after 10% discount at total consideration of Rs. 2,24,74,978/- (Rupees two crore twenty-four lakh seventy-four thousand nine hundred seventy-eight only).
The Complainant paid the complete amount towards consideration and it was duly acknowledged by Respondents-1 on page No.3 of both the allotment letters dated: 23.07.2012.
The Complainant has stated that Respondents-1 have deviated from the original sanctioned building plan and building has many defects.
The Complainant stated in her petition that as Respondents failed to obtain C.O.C. and did not get water connection, they did illegal boring in the premises of the project. Later, on a complaint, a raid was conducted by Sub Divisional Magistrate on 14.05.2019 and the illegal boring has been sealed. Since then there is no water connection inside the premises of the project.
The case of the Complainant is also that the Respondents have allowed unauthorized parking in the parking area of the owners of the units of the project and have sub-letted the same to third parties at monthly rent of approximately 4,00,000/- (Rupees four lakh only). She has also stated that Respondents are illegally constructing additional shops in the open area within the project.
She has further stated that Respondents have allowed occupancy in the building without obtaining Completion-cum-Occupancy Certificate (hereinafter mentioned as C.O.C.) from the Competent Authority.
She has also stated in her complaint that Respondents-1 have not provided any layout/ sanctioned plan of the building to her and since the project is still ongoing/incomplete, they have not registered the same with the Real Estate Regulatory Authority, N.C.T. of Delhi (hereinafter mentioned as R.E.R.A. Delhi) till date.
It has been stated in petition that she did not take possession of the unit allotted to her due to above mentioned discrepancies in the project.
With these grievances the Complainant approached this Authority for the following directions to be issued to Respondents:
(i)Direct Respondents-1 to complete the development of the Commercial Complex including functioning of PVR cinema complex.
(ii)Pay interest at 18% per annum on Rs. 2,02,26,963/- (Rupees Two Crore Two Lakh Twenty Six Thousand Nine Hundred Sixty Three only) from 01.01.2013, paid by her to Respondent-1;
(iii)Direct Respondents-1 to obtain C.O.C.
(iv)Direct Respondents-1 to pay admitted charges @70/- per sq. ft. per month till the date of actual possession of shops and register them after obtaining Completion and Occupancy Certificate along with interest @18% per annum as per clause 19 of the allotment letter read with section 2(za) of the Act.
(v)Direct Respondents-1 not to charge maintenance charges till the actual possession has been given her.”
A preliminary hearing in this case was held on 05.09.2019. Notice was accepted by Respondent-1 on same date. Written submissions by them were submitted on 18.01.2022.
The matter was further heard in several hearings on 05.09.2019, 17.09.2019, 03.10.2019, 30.10.2019, 04.12.2019, 15.01.2020, 25.02.2020, 04.08.2020, 22.09.2020, 04.11.2020, 16.12.2020, 04.02.2021, 11.03.2021, 17.06.2021, 29.07.2021, 23.09.2021, 21.10.2021, 21.12.2021, 04.02.2022, 04.03.2022, 01.04.2022 and 26.07.2022.
Respondents-1 filed reply on 03.10.2019.
An application was made by Complainants on 20.11.2019 for impleadment of Delhi Development Authority (hereinafter referred to as D.D.A.) as additional Respondents which was allowed by this Authority vide order dated 04.12.2019, terming them as Respondents-6. Notice to D.D.A. was also issued on the same date.
Final Written submissions by D.D.A., impleaded as Respondent-6 was submitted on 04.05.2022. Respondents-1 filed final written submissions on 09.05.2022.
While examining the record, it was found that notices were never issued to Respondents 2 to 5. It was also seen that though the Complainant had made all payments to M/s C.J. Infrastructure Pvt. Ltd., the receipts were issued on behalf of M/s Bhandari Infrastructure listed as Respondents-2 by the Complainant.
Considering the above, fresh notices were issued on 20.07.2022 to all Respondents including 2 to 6 for appearing before the Authority on 26.07.2022.
On 26.07.2022 appearances were made on behalf of Respondents-1, Respondent-4. None appeared on behalf of Respondents 2, 3 and 5 & 6.
Respondents-1 submitted that M/s Bhandari Infrastructure is the group under which M/s CJ infrastructure Pvt. Ltd. has been registered as a company. It was confirmed by Respondent-1 that all payments were made by the Complainant to M/s CJ Infrastructure Pvt. Ltd. only and they only have given or will give possession of booked shops/space to the allottees by way of registered deeds.
Ld. Counsel Mr. Ajeet Kumar, appearing on behalf of Mr. Jagdish Dhingra, Respondent-4 stated that his client being a real estate agent has no role in construction of project or collecting deposits from the Complainant.
After hearing the parties at length, the Authority ordered that only M/s CJ Infrastructure Pvt. Ltd. (hereinafter referred to as ‘Respondents-1’) and Respondents-6, D.D.A. shall be necessary parties for the adjudication of the matter and none other. The case was again reserved for orders on 26.07.2022.
The summary of arguments and submissions made by Respondents-1 is as under:
They constructed “Metroplex East” project strictly as per the sanctioned building plan. The project is having 242 shops/units besides two multi-screen auditoriums, food court etc. As on date, they have given possession of more than 190 units/shops.
Since the project was completed in the year 2013, it does not come under the purview of RE (RD) Act, 2016 and therefore, this Authority has no jurisdiction to entertain the present complaint.
They made an application addressed to Deputy Director (Buildings) C&I, D.D.A. bearing receiving stamp of Joint Director (Buildings) C&I, D.D.A. for issuance of C.O.C. on 14.02.2013 and sent two reminders on 31.10.2013 & 02.01.2014. Since D.D.A. did not give any reply to this application and reminders, project got the status of ‘deemed completion’ after expiry of thirty days.
The report submitted by the Local Commissioner in Suit No 173/2018, titled as C.J Infrastructure Pvt. Ltd. Vs Reels Cinemas Pvt. Ltd. instituted by the Hon’ble High Court of Delhi, shows that project is complete with respect to electricity, water/sewer, maintenance etc. since 2013.
The summary of arguments and submissions made by Respondents-6 is as under:
According to clause 7.5.2 of Delhi Building Bye Laws, 1983 (hereinafter referred to as ‘Bye Laws, 1983’), Respondents-1 were supposed to make an application along with fee of Rs.20/- for issuance of C.O.C. However they did not make any such application till date.
D.D.A. vide letter dated 07.08.2020 requested Respondents-1 to provide sanctioned drawings and documents in respect of the project but no reply has been given by Respondents-1.
D.D.A. in its status report dated 19.09.2020 submitted that the concerned file is not traceable and that as such drawings were procured from Delhi Fire Service. Further, they stated that an inspection was carried out on 29.10.2020 in which they noticed that there were various discrepancies from the drawings approved by Delhi Fire Service.
The claim of Respondents-1 that they submitted an application addressed to Deputy Director (Buildings) C&I, D.D.A. bearing receiving stamp of Joint Director (Buildings) C&I, D.D.A. on 14.02.2013 and sent two reminders on 31.10.2013 and 02.01.2014 for the issuance of C.O.C. is not based on facts as the letters produced by Respondents-1 were addressed to Deputy Director (Buildings) C&I, D.D.A. and bear the stamp of Joint Director (Buildings) C&I, D.D.A. There was no post of Joint Director (Buildings) C&I in D.D.A. in the year 2013 and even till date.
A show-cause notice under sections 30(1) and 31(A) of D.D.A. Act, 1957 was issued to Respondents-1 on 27.01.2021 seeking explanation as to why they have not applied to D.D.A. for C.O.C. till date. In response, Respondents-1 appeared before D.D.A. on 11.02.2021 and sought time to apply for C.O.C.
On 13.03.2021 Respondents-1 applied for C.O.C. The application was examined in accordance with Urban Building Bye Laws, 2016 (hereinafter referred to as “UBBL, 2016”) and was found incomplete.
Respondents-1 were intimated of the shortcomings/discrepancies in the application. Since they failed to cure them, D.D.A. rejected their application on 8.9.2021.
Analysis and Consideration:
A perusal of the documents available on record shows that the Respondents-1 have received from Complainant Rs. 2,02,26,963/- (Rupees two crore two lakh twenty six thousand nine hundred sixty three only), after 10% discount at total consideration of Rs. 2,24,74,978/- (Rupees two crore twenty-four lakh seventy-four thousand nine hundred seventy-eight only). Full payment for allotment of shops bearing nos. 101 & 102 as mentioned above has been acknowledged by Respondents-1 on page no.3 of both the allotment letters dated 23.07.2012. Therefore the payment mode is on record.
The Ld. Counsels of Respondents-1 vehemently argued that the project was completed in the year 2013 and therefore does not come within the purview of RE (RD) Act, 2016.
It would be relevant to go through the provisions of section 3 of the RE (RD) Act, 2016 to examine this point, which reads as under:
“3. Prior registration of real estate project with the Real Estate Regulatory Authority.
(1)No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act;
Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act:
Provided further that if the Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act or the rules and regulations made thereunder, shall apply to such projects from that stage of registration.”
The sub-clause (b) of clause (2) of section 3 makes it abundantly clear that only those real estate projects have been kept out of the purview of the Act, in respect of which completion certificate had been received prior to commencement of this Act i.e. 01.05.2017, the day Act came into being. The relevant text of sub-clause (b) of clause (2) of section 3 is reproduced below:
“(2)Notwithstanding anything contained in sub-section (1), no registration of the real estate project shall be required-
(b)where the promoter has received completion certificate for a real estate project prior to commencement of this Act;”
A combined reading of the underlined portions of section 3 of RE(RD) Act,2016 makes it clear that the ongoing projects would be those in respect of which the completion certificates had not been issued by the Competent Authority before 01.05.2017, the day Act came into force.
In the present case, Respondents-1 had no C.O.C. in respect of subject project as on 01.05.2017 and therefore promoter was required to make an application before the Authority for registration by 31.07.2017. The proviso of section 3 of RE(RD) Act,2016 creates an obligation on the promoters to apply for registration for projects that were ongoing on the date of commencement of the Act i.e. 01.05.2017 (i.e in respect of which the completion certificates had not been issued by that date) within a period of 3 (three) months (i.e. by 31.07.2017).
The Hon’ble Supreme Court in the case of “M/S Newtech Promoters And Developers Pvt. Ltd. Vs The State of Uttar Pradesh & Ors. Etc. 2022 (1) R.C.R. (Civil)” have clearly held that this Act includes within its fold all those projects which were “on-going” and in respect of which completion certificate had not been issued on the date of commencement of the Act. On the point of whether the Act is retrospective or retroactive in its operation the Hon’ble Supreme Court has observed:
“The issue concerns the retroactive application of the provisions of the Act 2016 particularly, with reference to the ongoing projects. We take note of the objects and reasons and scheme of the Act, it manifests that the Parliament in its wisdom after holding extensive deliberation on the subject thought it necessary to have a central legislation in the paramount interest for effective consumer protection, uniformity and standardization of business practices and transactions in the real estate sector, to ensure greater accountability towards consumers, to overcome frauds and delays and also the higher transaction costs, and accordingly intended to balance the interests of consumers and promoters by imposing certain duties and responsibility on both”
It is further held by Hon’ble Supreme Court that:
“The clear and unambiguous language of the statute is retroactive in operation and by applying purposive interpretation rule of statutory construction, only one result is possible i.e. the legislature concisely enacted a retroactive statute to ensure that the sale of plots, apartment or building in real estate project, is done in an efficient and transparent manner so that the interest of the consumers in the real estate sector is protected by all means. Section 13, 18 and 19(4) are all beneficial provisions for safeguarding the pecuniary interest of home buyers/allottees.”
The stand of Respondents-1 is that the Act is not ‘Retrospective’ in nature. As per the aforesaid ratio of law, the provisions of the Act are ‘Retroactive’. The Act serves as safeguard for the real estate projects which not only commenced after the Act came into being, but also for ongoing real estate projects that started prior to the date when this Act was brought into force. If the Act is held only prospective then the Adjudicating mechanism under section 31 of the Act would not be available to any allottee of ongoing projects.
The Ld. Counsel for Respondents-1 laid emphasis that the certificate of architect Mr. Subher Khan is a proof of completion of the project. He also argued that report submitted by the Local Commissioner in Suit No 173/2018, titled as C.J Infrastructure Pvt. Ltd. Vs Reels Cinemas Pvt. Ltd. instituted in Hon’ble High Court of Delhi, shows that project has been complete with respect to electricity, water/sewer, maintenance etc. since 2013.
The expression “completion certificate” has been defined under section 2(q) and “occupancy certificate” under section 2(zf) of the Act which reads as under:
“2(q) “completion certificate” means the completion certificate, or such other certificate by whatever named called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws;
2(zf) “occupancy certificate” means the occupancy certificate, or such other certificate by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity;”
Clause 7.5.2 of the Bye Laws, 1983 mandates that upon completion of the building, the builder/ developer/ promoter of the project should submit a notice to the Authority regarding the completion of the project. This clause reads as follows:
“7.5.2 Notice of Completion-
Every owner shall have to submit a notice of the building to the Authority regarding completion of the work described in the building permit. The notice of completion shall be submitted by the owner through the licensed Architect/Engineer/supervisor/group as the case may be who has supervised the construction, the proforma given in Appendix ‘G’ accompanied by three copies of completion plan and the following documents and along with a fee of Rs.20/-:-
i.Copy of lease deed
ii.Copy of sewer connection permission
iii.Clearance from Chief Fire Officer, Delhi
iv.Clearance from Chief Controller of Explosives, Nagpur, as required
v.Clearance from DESU regarding provisionof Transformers/ Sub-stations Ancillary power supply system etc. are required
vi.Structural stability certificate duly signed by the licensed Architect/Engineer
vii.Certificate from the Lift Manufacturers as required.
viii.Certificate from Air-conditioning Engineer, Manufacturers as required”
Upon completion of the building, the builder/ developer/ promoter of the project should have made an application to D.D.A. as per clause 7.5.2 of the Bye Laws, 1983 for issuance of C.O.C. The completion certificate is proof that the project has been built adhering to sanctioned plan, applicable building codes, relevant regulations and laws. The occupancy certificate proves that building has all necessary civic facilities and is fit for occupation by the allottees. Occupying a building without C.O.C is illegal. In the present case the Respondents-1 have allowed occupancy without C.O.C.
The Competent Authority for issuance of C.O.C. in this case is not architect but D.D.A
So far as the submission in respect of report of local commissioner in Suit No. CS(OS)173/2018 of Hon’ble High Court of Delhi, titled C.J Infrastructure Pvt. Ltd. Vs Reels Cinema Pvt. Ltd. is concerned, it has no stand or bearing on the present case. What is being urged by Respondents-1 is that the report submitted in the above titled case is a proof of completion of the project with respect to construction of the project, provision of amenities like water, sewer etc. It may be relevant to note that the above mentioned suit was instituted on 19.04.2018 and was disposed of on 05.09.2019 as withdrawn by the plaintiff (Respondents-1 in the present case). The above mentioned suit was not decided on merit hence the report of Local Commissioner cannot be taken as proof of completion in the present case.
Respondents-1 have specifically mentioned that they made an application addressed to Deputy Director (Buildings) C&I, D.D.A. bearing receiving stamp of Joint Director (Buildings) C&I, D.D.A. for issuance of C.O.C. on 14.02.2013 and also sent two reminders on 31.10.2013 & 02.01.2014. Since D.D.A. did not give any reply to this application and reminders, they claim project got the status of ‘deemed completion’ after expiry of thirty days.
Respondents-6 in their reply have specifically mentioned that the application dated 14.02.2013 produced by Respondents-1 is not based on facts as it bears receiving stamp of Joint Director (Buildings) C&I D.D.A., a post which did not exist.
Respondents-6 have stated that they could not locate this application & reminders in their record. Even if we give benefit of doubt to Respondents-1 that they submitted the application & reminders, we fail to understand as to why fee of Rs. 20/-, which was mandatory as per clause 7.5.2 of the Bye Laws, 1983, was not paid along with the application.
Respondents-1 have tried to mislead this Authority by producing applications dated 14.02.2013 addressed to Deputy Director (Buildings) C&I, D.D.A. bearing receiving stamp of Joint Director (Buildings) C&I, D.D.A. and two reminders dated 31.10.2013 and 02.01.2014. The fact remains that when Respondents-1 submitted this application, allegedly received by the office of Joint Director (Buildings) C&I, D.D.A., the said post did not even exist in D.D.A.
The incomplete application dated 14.02.2013 addressed to Deputy Director (Buildings) C&I , D.D.A. bearing receiving stamp of Joint Director (Buildings) C&I, D.D.A., which has not been found in the record of D.D.A. cannot form basis of ‘deemed completion’. If Respondents-1 had deemed completion then why did they submit fresh application for issuance of C.O.C. on 13.03.2021? It seems ‘deemed completion’ has been an afterthought.
It would be relevant to go through clause 7.6 of the Bye Laws, 1983 which clearly states that a project shall be considered ‘deemed approved’ for occupancy only if after receipt of notice of completion, the Authority i.e D.D.A. fails to communicate the acceptance or refusal within 60 days. The said clause of the Bye Laws, 1983 is reproduced below for the sake of convenience:
“7.6Occupancy Certificate- The Authority on receipt of completion shall inspect the work and communicate the sanction or refusal or objection thereto in the proforma given in Appendix ‘H’ within 60 days from the date of receipt of notice of completion. If nothing is communicated within this period, it shall be deemed to have been approved by the Authority for occupation. Where the occupancy certificate is refused, the various reasons shall be quoted for rejecting at the first instance itself.”
In this case Respondents-1 did not submit any ‘Notice of completion as required by the Bye Laws.
As Respondents-1 did not make any application of ‘notice of completion’, D.D.A sent a show-cause notice on 27.01.2021 under section 30(1) and section 31(A) of D.D.A. Act to Respondent-1 to appear before them and explain as to why they had not applied for Completion Certificate till date. In response to the show-cause notice, Respondents-1 appeared before D.D.A. and sought time for the same and on 13.03.2021 applied for Completion Certificate. Their application was examined as per the provisions of UBBL-2016 and found to have various discrepancies mentioned as under:
Declaration/appointment of architect, Structural Engineer and supervisor were not submitted;
The Structural safety Certificate A-4 was not signed digitally;
Report of Soil Testing was not submitted;
DUAC and DFS performa was not submitted;
The toilets were not as per sanctioned plan;
Labour cess NOC was not submitted.
D.D.A. informed Respondets-1 about the above mentioned shortfall/shortcomings of the application. As Respondents-1 failed to rectify them in spite of being given various opportunities D.D.A. rejected their application on 08.09.2021.
Not obtaining C.O.C. till date is a serious lapse on the part of Respondents-1. If a promoter fails to obtain C.O.C. then the project remains incomplete in terms of section 3 of RE (RD) Act, 2016. Since project remains incomplete & without C.O.C., the allottees cannot be held liable to pay maintenance charges for their flat/ apartment/ floor/ shop or space or unit even if they have been allowed to occupy the flat/ apartment/ floor/ shop or space or unit. The maintenance charges should become payable only from the date of receiving C.O.C or possession whichever is later.
They not only failed to obtain C.O.C. from the competent authority i.e. D.D.A. but also allowed occupancy in an incomplete project, thereby endangering the lives of occupants.
At this stage it would be appropriate to refer to clause 7.5.1 of the Bye Laws, 1983 which reads as under:
“7.5.1- Occupation of Building- No person shall occupy or allow any other person to occupy any building or a part of a building for any purpose until such building or part has been granted occupancy certificate”
The above stated clause imposes a liability with regard to allowing the occupancy in an incomplete building. Respondents-1 ought not to have allowed the owners to occupy their respective units in the absence of C.O.C.
Respondents-1 have definitely failed to abide by the law of land. They not only failed to obtain C.O.C. from the competent authority i.e. D.D.A. in spite of having given various opportunities but also allowed occupancy in an incomplete project, thereby endangering the lives of occupants. It seems a blatant violation of Bye Laws, 1983 which were to be strictly adhered to by Respondents-1.
The Government should not allow occupancy of any building unless promoter/developer/builder has obtained C.O.C. from Competent Authority. The occupancy of any building without C.O.C. can assume serious proportions and cause huge loss of life and property. The Authority shall send an advisory to the Government that no transfer/registering of any flat/apartment/floor/unit/space or building should be allowed unless it has a completion and occupancy certificate.
In this case, the allottees have suffered agony and harassment, as a result of carelessness and inaction on the part of the promoter i.e. Respondents-1. It is evident from various letters written by the Complainant to Respondents-1 that she is concerned about the defects in the construction of the project.
The RE (RD) Act, 2016 was enacted to induct professionalism and standardization in the real estate sector, thus paving way for its accelerated growth and investments in the long run. This Act is a special law enacted to address issues in the real estate sector. All disputes between home buyers/allottees and promoters/developers of a real estate project, covered under the Act, can be raised before Real Estate Regulatory Authority (R.E.R.A.).
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.
Section 18(1) of the Act deals with the situation if the promoter fails to complete or give possession either in terms of the agreement for sale or complete the project by the date specified therein etc. Under this section the allottee/ homebuyer holds an unqualified right to seek refund of the amount with interest at such rate as may be prescribed. It also clearly states that in case the allotte/ home buyer does not wish to withdraw from the project he shall be paid interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.
The text of section 18 of RE (RD) Act, 2016 is reproduced below for the sake of convenience:
“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.
(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 to sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act.”
In the instant case the Complainant does not wish to withdraw from the project and wants interest on the total amount paid by her till date for the delayed possession.
As Respondents-1 could not complete the project in stipulated time adhering to the terms and conditions of the allotment letter, the Complainants could not take the possession of their unit/shop till date. Since there is no Completion Certificate for the project, no occupation should have been allowed by Respondents-1. The delay in giving the possession to the allottees cannot be compromised. Complainants invested their hard earned money in the project but due to inaction and greed of Respondents-1 they have been deprived of enjoying the benefit of the same till date.
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 bilateral agreement entered into between the Complainant and Respondents-1 forms a contract. It has been specifically mentioned under Clause 26(e) of the allotment letter that promoter shall pay penalty of Rs. 70/- per sq. ft. of super area per month for a period of delay by the developer. This clause states as under:
“26(e)- However in case of delay in construction of the unit/ commercial Complex attributable to delay by the Developer, the Developer shall pay penalty of Rupees seventy per sq. ft. of the super area per month for a period of delay”
The Respondents-1 are thus under contractual obligation and bound by the terms and conditions of the agreement.
Since the Complainant does not wish to withdraw from the project, she is entitled for interest for the delayed possession as per the bilateral agreement between the Complainant and Respondents-1 and proviso of section 18(1) of the Act.
As Respondents-1 could not complete the project and obtain C.O.C. till date, the Complainants could not take the possession of their unit/shop. Since there is no C.O.C. for the project, no occupation should have been allowed by Respondents-1. The delay in giving the possession to the allottees after obtaining C.O.C. cannot be ignored. The Complainant and other allottees invested their hard earned money in the project but due to the greed of Respondents-1 they are being deprived of peaceful possession.
In this case, the promoter/builder not only failed to provide correct information to the Complainant and other allottees but also tried to mislead them by providing wrong information about the ‘deemed completion’ of project.
Clause 7.6 of the Bye Laws clearly states that a project shall be considered to be deemed approved for occupancy only if after receipt of notice of completion, the Authority i.e. D.D.A. fails to communicate the acceptance or refusal within 60 days. The said clause of the Bye Laws is produced below for the sake of convenience:
“7.6Occupancy Certificate- The Authority, on receipt of the notice of completion, shall inspect the work and communicate the sanction or refusal or objection thereto in the proforma given in Appendix ‘H’ within 60 days from the date of receipt of notice of completion. If nothing is communicated within this period, it shall be deemed to have been approved by the Authority for occupation. Where the occupancy certificate is refused, the various reasons shall be quoted for rejecting at the first instance itself”
We are aware that the builders sometimes make deviations from the original sanctioned plan in anticipation that at some point of time they would be regularized after paying penalty. Sometimes, they also make deviations which cannot be regularized. The Respondent-1 in this case, perhaps made deviations which cannot be regularized and hence they are hesitating to apply for C.O.C. with complete application and documents.
Clause 7.4 of Building Bye Laws, 1983 clearly states that:
“If during the construction of a building any substantial departure from the sanctioned plan is intended to be made by way of internal alterations or external additions, sanction of the authority shall be obtained. The revised plan showing the deviations shall be submitted and the procedure laid down for the original plan heretofore shall apply to all such amended plans.”
There is no distinction qua the rights of allottees in respect of the units sold or allotted prior to enforcement of the Act. As Respondents-1 could not complete the project in stipulated time adhering to the terms and conditions of the allotment letter, the Complainant could not take the possession of her unit/shop till date. Since, there is no Completion Certificate for the project, no occupation should have been allowed by Respondents-1. The delay in giving the possession to the allottees cannot be compromised. Complainants invested their hard earned money in the project but due to inaction and greed of Respondents-1 they have been deprived of enjoying the benefit of the same till date.
The argument about applicability of section 114 and sub-section (f) of the Indian Evidence Act, 1872 that court may presume the existence of certain facts “that the common course of business has been followed in particular cases” has no relevancy in the present case.
The RE (RD) Act, 2016 mandates under section 11 (4) (d) that the developer will be responsible for providing and maintaining the essential services, on reasonable charges, till the taking over of possession of the project by the Association of the Allottees. In the present case it is seen that the project is still incomplete as no C.O.C has been obtained and project lacks basic amenities like sewer and water connection etc.. This being the case, Respondents-1 have no right to demand maintenance charges from Complainants or other allottees.
Thus, we hold that the project “Multiplex East” is ongoing even today as no Completion Certificate has been issued in respect of this project till date. It appears, Respondents-1 have deviated significantly from the original sanctioned plan and failed to provide basic civic facilities and that may be the reason they are hesitating to apply properly for C.O.C. & obtain it. Had that not been the case, they would have applied for C.O.C in time following proper procedure. The delay in obtaining C.O.C. has actually become the cause of agony and mental harassment of Complainant and other allottees.
In view of the above discussion, we have no hesitation in saying that Respondents-1 have miserably failed to perform their responsibilities and obligations. Therefore we direct and order as follows:
D.D.A. is directed to conduct physical inspection of the building; list deviations made by Respondents-1 from the sanctioned building plan and submit a report to the Authority by 30.11.2022.
D.D.A. is directed to submit a report regarding fitness of building for occupation by 30.11.2022.
D.D.A. is directed to inquire into the fact as to how occupancy was allowed in the project building without obtaining C.O.C.
Respondents-1 are directed to register the subject project with RERA NCT of Delhi within 45 days of the date of this order as the project remains ongoing in terms of section 3 of RE (RD) Act, 2016.
Respondents-1 are directed to obtain necessary clearances from concerned Civic Authorities in respect of project “Multipleax East” and file with the Authority.
The Respondents shall pay to the Complainant Ms. Maldeep Sidhu, an interest @ 10% (M.C.L.R. + 2%) from the date of promised possession i.e. on all deposits made till then till the date of actual possession of the shops.
Respondents-1 are directed not to collect any maintenance charges from the allottees as the project is still ongoing.
The Complainant and other allottees will be free to make an application before the Adjudicating Officer for seeking compensation for inconvenience and mental harassment caused by Respondents-1.
The complaint is accordingly disposed of with no order as to costs.
File may be consigned to record room.