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Judgment
A complaint was filed in FORM ‘M’ on 22.09.2023 by Mr. Ravi Tiku (hereinafter referred to as “Complainant”) stating that in the year 2015, he booked a 3BHK flat in the project “Smart Homes” promoted by “M/s Revanta Multi-State CGHS Limited” (hereinafter referred to as “Respondents or Respondent Society”) located at Dwarka, Delhi.
The Respondents’ vide welcome letter dated 15.10.2015 confirmed membership of the Complainant and welcomed him as a new resident of proposed “Smart Homes” project.
The Complainant paid Admission Fee, Annual Operation Charges, Share Money, Booking Amount, Land Cost etc., totaling to Rs.24,40,240/- (Rupees Twenty-Four Lakh Forty Thousand and Two Hundred and Forty Only) to the Respondents.
The Complainant submitted that in the name of DDA approved flats the Respondents fraudulently and through cheating have looted his hard-earned savings. As a result, he is seeking a full refund of his deposited amount, along with interest from the Respondents.
A preliminary hearing in the case was held on 11.12.2023. Notice to the Respondents was issued on 02.01.2024 via post and on 04.01.2024 via email.
Inspite of service of various notices, the Respondents did not file reply to the complaint. Therefore, vide order dated 16.07.2024, the Authority decided to proceed ex-parte due to failure to file the reply by the Respondents and repeated absence of the Respondents on various dates.
We have perused the documents available on records and heard the arguments of the Complainant.
Analysis and Consideration:
A perusal of the documents available on record shows that seven receipts were issued by the Respondents are as follows:
| S. No. | Date of Receipt | Amount paid |
|---|---|---|
1. 2. | 10.10.2015 15.10.2015 | Rs. 5,17,500/-Rs. 10,900/- |
| 3. | 15.10.2015 | Rs. 5,17,500/- |
| 4. | 25.05.2016 | Rs. 4,50,000/- |
| 5. | 27.01.2017 | Rs. 9,900/- |
| 6. | 15.03.2019 | Rs. 7,42,500/- |
| 7. | 29.11.2019 | Rs. 1,91,940/- |
| TOTAL | Rs.24,40,240/- |
Hence, payment of Rs.24,40,240/- (Rupees Twenty-Four Lakh Forty Thousand and Two Hundred and Forty Only) by the Complainants to the Respondents is a recorded fact.
The RE (RD) Act, 2016 has been enacted to induct professionalism and standardization in the real estate sector, paving the way for catalyzing investments and accelerating growth of the sector in the long run. To achieve these objectives, the Act created a Real Estate Regulatory Authority to supervise the conception, initiation and completion of a Real Estate Project. The Respondents are a multistate co-operative society and thus amenable to the provisions of Multi State Co-operative Societies Act, 2002. The RE (RD) Act, 2016 is a special law enacted to address issues in the real estate sector. Therefore, all disputes between homebuyers/allottees and promoters/developers relating to any Real Estate Project covered under RE (RD) Act of 2016, can be raised before the concerned Real Estate Regulatory Authority (RERA). Section 79 of the RE (RD) Act, 2016 even bars jurisdiction of civil courts to entertain any suit or proceeding in respect of any matter which the Authority is empowered under the Act to determine. Moreover, section 89 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.
As per 2 (zk)(iv) of the RE (RD) Act 2016, promoter means
“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;” Therefore, the Respondent Cooperative Housing Society falls within the definition of "promoter" as provided in Section 2 of the Real Estate (Regulation and Development) Act, 2016.
Furthermore, the issue of whether a Multistate Co-operative Society falls under the purview of the RE (RD) Act, 2016, has been thoroughly discussed by the Hon’ble Real Estate Appellate Tribunal (‘REAT’), Delhi, in its order dated 12.05.2023, in the case titled Jeevan Ashray Welfare Society Vs. Diwakar Garg. The relevant paragraph of the said order reads as follows:
“15.A literal interpretation of the definition of promoter under Section 2(zk) itself is clear and apparent, notably sub-clause (iv) which provides for an Apex State Level Cooperative Housing Finance Society and a Primary Cooperative Housing Finance Society, similar to the appellant society, which constructs apartments or buildings for its Members to be a promoter. Section 2(zg) of the Act, which defines the word ‘Person’ used while defining the word ‘Promoter,’ reinforces the above position of law. The appellant society is registered under the Societies Registration Act, 1860, and their activity as a society is confined to constructing a ‘real estate project,’ as defined under Section 2 (zn) comprising apartments for its members. The appellant society has a large number of members, who have been solicited for membership on assurances of a plot of land on a share of plot of land and an apartment to be constructed by the society. The appellant society admits having purchased land for development and construction of apartments and such activity makes them amenable to the Real Estate (Regulation and Development) Act, 2016, and for prior registration of their project under Section 3 of the Act at the appropriate stage. The context of the activities of the appellant has been shown on record by way of documents that the members have been assured of a constructed apartment and that the respondents have deposited moneys with the appellant from time to time as per the demands raised by the society. The contours of the activities and the conduct of the appellant do make them fall within the ambit of the definition of promoter as provided in Section 2 (zk) of the Act. Even though, we are not examining the felicity or correctness of their registration under the Societies Registration Act, but their amenability to the Real Estate (Regulation and Development) Act, 2016, cannot be doubted. Even the elaborated definition of the word ‘Person’ used to define the promoter, as given in Section 2(zg) categorically includes in its fold a cooperative society registered under any law relating to cooperative societies, as also an association of persons or body of individuals, whether incorporated or not, thus shutting the door to prevent unscrupulous persons from hiding under the garb of their registration under any other law relating to cooperative societies." Therefore, the Authority under the RE (RD) Act, 2016 has jurisdiction over real estate projects promoted by such societies. Thus Multistate Co-operative Societies Act, 2002 cannot put fetters on the jurisdiction of this Authority to decide disputes between homebuyers and the promoters/Respondent Society.
The Respondents collected monies for purchase of land for the housing project. The Welcome Letter issued to the Complainants by the Respondents clearly mentions the project “Smart Homes” promoted by the Respondent Society. The aim and objective of the Respondent Society, thus, was to raise housing project and the Complainant invested money and became a member of the Society to purchase a flat in the said housing project and not for purchase of land only. The Respondents 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 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 attempts to balance the interests of consumers and promoters by imposing certain responsibilities on both. It seeks to establish symmetry of information between the promoters and purchasers, enhance transparency of contractual conditions, set minimum standards of accountability and establish a fast-track dispute resolution mechanism.
Under section 18 of RE (RD) Act, 2016, an allottee/house buyer can seek refund of amount invested/deposited with the promoter, along with interest and compensation, if the promoter fails to complete the project by the date specified in Agreement to Sale, and also under section 12 of RE (RD) Act, 2016, if he/she was misled by any information furnished by the promoter, with regard to the project, either through advertisement or otherwise.
In the present complaint, the Complainant intends to withdraw from the project on the ground of delay and is seeking refund of the amount paid to the Respondents in respect of the 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.”
As stated earlier, section 12 of the RE (RD) Act, 2016 casts a duty upon the promoter to provide correct and updated information to allottees regarding the project. 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 at the time of allotment itself by concealing information that they do not have any license or approval from the concerned authorities for construction of housing project and that no housing project can be developed on agricultural land proposed to be purchased by them unless its use is changed. They also did not disclose the risks associated with the project to the society members including the Complainant. The promoters gave part information and cheated the members of the public at large.
From the facts produced before us, it is clear that the Respondents have collected deposits from the Complainants for the flat in their proposed project “Smart Homes” 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. Thus, if the Complainant wishes to withdraw from the project, the Respondents do not have any legal or moral authority to keep money deposited by the Complainants.
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 Authorities have exclusive jurisdiction to direct refund of the amount deposited alongwith interest 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).
On perusal of the documents on record and submissions made by the Complainant, the Authority is of view that the Respondents are in contravention of the sections 18 and 12 of RE (RD) Act, 2016. As such, the Complainant is entitled to get the refund of the amount paid by him alongwith interest at prescribed rate @ 10.75% p.a. (i.e., MCLR plus 2%) as per provisions of sections 18 and 12 of RE (RD) Act, 2016 read with rule 15 of the National Capital Territory of Delhi Real Estate (Regulation and Development) (General) Rules, 2016.
In the light of the aforesaid, we direct the Respondents, ‘M/s Revanta Multi State CGHS Limited’ to refund the entire amount of Rs.24,40,240/- (Rupees Twenty-Four Lakh Forty Thousand and Two Hundred and Forty Only), deposited with the Respondents, to the Complainant, Mr. Ravi Tiku, within 45 days of issuance of this order along with interest at the rate of 10.75% per annum (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.