Haryana RERA asks Ireo Grace Realtech to pay prescribed interest on delayed possession charges to home buyers

Read Order: Deepankur Kukreja & Ors. vs. Ireo Grace Realtech Pvt. Ltd. & Ors

Pankaj Bajpai

Gurugram, October 12, 2021: The Real Estate Regulatory Authority, Haryana, has ruled that complainants (home buyers) are entitled to delayed possession charges at the prescribed rate of interest for every month of delay on the amount paid by the complainants to the respondents (Ireo Grace Realtech) till offer of possession of the booked unit, plus two months which comes out to be August 11, 2019 as per the proviso to section 18(1)(a) of the Real Estate (Regulation and Development) Act, 2016 r/w Rules 15 of the Haryana Real Estate (Regulation and Development) Rules, 2017. 

The Coram of Samir Kumar (Member) and Vijay Kumar Goyal (Member) therefore u/s 37 of the Act, directed the respondents to pay the interest at the prescribed rate i.e., 9.30 % per annum for every month of delay on the amount paid by the complainants from due date of possession till the offer of possession, to ensure compliance of obligations cast upon the promoters as per the function entrusted to the authority u/s 34(f) of the Act. 

The arrears of interest accrued so far shall be paid to the complainants within 90 days from the date of this order, added the Coram. 

The observation came pursuant to a complaint filed by the allottees u/s 31 of the Act r/w Rule 28 of the Rules, for violation of section 11(4)(a) of the Act wherein it is inter alia prescribed that the promoter shall be responsible for all obligations, responsibilities and functions under the provision of the Act or the rules and regulations made thereunder or to the allottee as per the agreement for sale executed inter se. 

Mr. Anuj Malhotra, counsel on behalf of the complainants, had sought relief in form of direction to the respondents to make the payment of compensation @20% p.a. on the amount already paid by the complainants to the respondents from the delay of 14 months or any other period as RERA deems fit. 

In addition, the counsel also sought for direction to the respondents to deliver immediate possession of the apartment CD-C4-10-1002 in the project “The Corridors’ located at sector- 67A, Gurgaon, Haryana along with all the promised amenities and facilities and to the satisfaction of the complainants, after adjusting the delay compensation. 

After considering the arguments, the Coram found that the order dated April 7, 2015 passed by the National Green Tribunal (NGT) for the construction activities which were in violation of the NGT direction and MoEF guidelines of 2010, thereby, making it evident that if the construction of the respondents’ project was stopped then it was due to the fault of the respondents themselves and they cannot be allowed to take advantage of their own wrongs/faults/deficiencies. 

“Also, the allottees should not be allowed to suffer due to the fault or the respondent promoters. It may be stated that asking for extension of time in completing the construction is not a statutory right nor has it been provided in the rules. This is a concept which has been evolved by the promoters themselves and now it has become a very common practice to enter such a clause in the agreement executed between the promoter and the allotee”, observed the Coram. 

The Coram also emphasized that for availing further period for completing the construction the promoter must make out or establish some compelling circumstances which were in fact beyond his control while carrying out the construction due to which the completion of the construction of the project or tower or a block could not be completed within the stipulated time. 

Now, turning to the facts of the present case, the Coram noted that the respondent promoters have not assigned such compelling reasons as to why and how they shall be entitled for further extension of time 180 days in delivering the possession of the unit, and accordingly, the grace period of 100 days cannot be allowed to the promoters at this stage.

From perusal of the possession clause of the agreement, the Authority found that drafting of this clause and incorporation of such conditions are not only vague and uncertain but so heavily loaded in favour of the promoter and against the allottee that even a single default by the allottee in fulfilling formalities rind documentations etc. as prescribed by the promoter may make the possession clause irrelevant for the purpose of allottee and the commitment date for handing over possession loses its meaning. 

The incorporation of such clause in the apartment buyer’s agreement by the promoter is just to evade the liability towards timely delivery of subject unit and to deprive the allottee of his right accruing after delay in possession, added the Authority while observing as to how the builder has misused his dominant position and drafted such mischievous clause in the agreement and the allottee is left with no option but to sign on the dotted lines. 

The authority in the present case observed that, the respondents had not kept the reasonable balance between their own right and the rights of the complainants/ allottees, and they had acted in a pre-determined and preordained manner.

“Nowhere in the agreement it has been defined that fulfillment of which conditions forms a part of the pre-conditions, to which the due date of possession is subjected to in the said possession clause. If the said possession clause is read in entirety, the time period of handing over possession is only a tentative period for completion of the construction of the flat in question and the promoters are aiming to extend this time period indefinitely on one eventuality or the other. Moreover, the said clause is an inclusive clause wherein the “fulfillment of the preconditions” has been mentioned for the timely delivery of the subject apartment. It seems to be just a way to evade the liability towards the timely delivery of the subject apartment. According to the established principles of law and the principles of natural justice when a certain glaring illegality or irregularity comes to the notice of the adjudicator, the adjudicator can take cognizance of the same and adjudicate upon it. The inclusion of such vague and ambiguous types of clauses in the agreement which are totally arbitrary, one sided and totally against the interests of the allottees must be ignored and discarded in their totality”, observed the Coram. 

Hence, taking divergence from its earlier view of calculating/assessing the due date of possession from date of approval of firefighting scheme, the Authority was of the view that the date of sanction of building plans ought to be taken as the date for determining the due date of possession of the unit in question to the complainant.

The question of determination of due date of possession was also considered by the Supreme Court in IREO Grace Realtech Pvt. Ltd. v/s Abhishek Khanna and Ors. by observing that no refund can be allowed at this stage keeping in view the status of the project and the interest of other allottees. 

At last, the Regulatory Authority also directed the complainants to pay outstanding dues, if any, after adjustment of interest for the delayed period, and clarified that the rate of interest chargeable from the allottee by the promoter, in case of default shall be charged at the prescribed rate by the respondents/promoters which is the same rate of interest which the promoter shall be liable to pay the allottee, in, case of default i.e., the delayed possession charges as per section 2(za) of the Act.

The Authority also made it clear that the respondents shall not charge anything from the complainants which are not part of the apartment buyer’s agreement.