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Judgment
A complaint was filed in FORM ‘M’ on 29.11.2021 by Ms. Unmesha Dev (hereinafter referred as “Complainant”) stating that in the year 2019 she approached “Delhi Heights Multi State CGHS Limited” (hereinafter referred as “Respondents or Respondent Society”) for booking of an apartment in the Respondents project namely “Delhi Society Homes” in Dwarka, New Delhi.
The Complainant signed membership application form along with “Dwelling Unit Option Form” for super HIG flat of 1387 sq. ft. built up area at a total cost of Rs.58,94,750/-(Rupees Fifty Eight Lakh Ninety Four Thousand and Seven Hundred and Fifty Only). The Respondents vide Welcome Letter dated 17.01.2019 confirmed her membership and welcomed as new resident of proposed “Delhi Society Homes”.
The Respondents have acknowledged receipt of Rs.15,31,000 /- (Rupees Fifteen Lakh Thirty One Thousand Only) deposited by the Complainant.
The Complainant submitted that the Respondent have failed to execute the flat buyer agreement and deliver the possession of the said flat even after lapse of 2 years from the date of booking. Therefore, she seeks refund of amount deposited with Respondents along with interest.
A preliminary hearing in the case was held on 01.02.2022 and a notice to the Respondents was issued on same date.
The matter was heard in several hearings dated 01.02.2022, 29.03.2022 and 07.06.2022. The Respondents were directed vide order dated 01.02.2022 to file reply by 23.02.2022. Since, the Respondents did not file reply by 23.02.2022, the Authority imposed a cost of Rs.2,000/- on them for not filing the reply vide order dated 29.03.2022. During the course of hearing held on 07.06.2022, the Ld. Counsel for Respondents submitted that they have filed reply alongwith it two applications as under:-
Application under Order 1 Rule 10 CPC for impleading Delhi Development Authority (DDA) as party;
ii) Application for condonation of cost
The application under Order 1 Rule 10 CPC was rejected by the Authority vide its order dated 07.06.2022 as DDA never asked the Respondent Society to either make members or collect money from them or allotted any parcel of land to them for housing project. The application for condonation of cost was rejected as during the hearing held on 29.03.2022, the Authority had already taken a lenient view and reduced the cost from Rs.5,000/- to Rs.2,000/-.
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. Further, disputes between the parties should be referred for arbitration under section 84(1) of the said Act.
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 issued three receipts dated 17.01.2019, 28.01.2019 and 02.02.2019 acknowledging deposits of Rs.45,000/-, Rs.7,23,150/- and Rs.7,62,850/- respectively. Hence, the payment of Rs.15,31,000 /- (Rupees Fifteen Lakh Thirty One Thousand Only) made by the Complainant to the Respondents is a recorded 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 homebuyers/allottees and promoters/developers of a real estate project, covered under Section 3 of 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 Act 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 Housing 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 have 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 one part of the project. The welcome letter dated 17.01.2019 issued to the Complainant by the Respondents clearly mentions about project “Delhi Society Homes” promoted by the society. Further, the “Dwelling Unit Option Form” 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 member of Society for housing project and not for the purchase of land only. Therefore, the Respondents cannot shirk 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 the 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.
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 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 cast 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 the Complainant 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. It is a pure simple case of giving part information and cheating the members of public.
From the facts produced before us it is clear that the Respondent Society issued the welcome letter to the Complainant for the unit and collected money from her after 01.05.2017, the day RE(RD) Act, 2016 came into force, without registering the project with RERA, Delhi under Section 3 of RE (RD) Act, 2016. Further, they collected an amount of more than ten percent (10%) of total sale consideration from the Complainant in violation of Section 13 of RE (RD) Act, 2016. These two actions of the Respondent Society make them liable for action under Sections 59 & 61 of RE (RD) Act, 2016. The Authority would take separate action against Respondents on this account.
Further, it is observed that the Respondents had filed an application for waiver of cost of Rs.2,000/- imposed upon them. The application for waiving of the cost was rejected for the reasons mentioned above. The Authority decides that this cost be paid to the Complainant.
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 Respondents, Delhi Heights Multi State CGHS Limited to refund the entire amount of Rs.15,31,000 /- (Rupees Fifteen Lakh Thirty One Thousand Only) deposited with them to the Complainant within 45 days of issuance of this order along with interest at the rate of 9% per annum (i.e., MCLR+2%) from the date of payment of each sum until the date of its actual return and also pay to her Rs.2,000/- cost imposed vide order dated 29.03.2022 for delay in filing reply.
The case is disposed of accordingly.
No order as to costs.
Footnotes
- 1.The Real Estate (Regulation and Development) Act, 2016