Haryana RERA issues Refund Order despite Project having received Occupation Certificate; says RERA Act overrides covenants, if same are found contrary to provisions of Act

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Read Order:  Shri Lokesh Pandey & Garima PandeY v. M/s M3M lndia Pvt Ltd and ors


Tulip Kanth

Gurugram, October 12, 2021: In a major relief to homebuyers, the Haryana Real Estate Regulatory Authority has directed the Developer (M3M India Pvt. Ltd.) to refund the amount received from the complainants(buyers) and also imposed costs of litigation, amounting to Rs.50,000 to be paid to them.

The facts of the case pertain to a complaint filed by Lokesh Pandey and Garima Pandey (buyers) under Section 31 of The Real Estate(Regulation and Development) Act, 2016 , r/w rule 29 of The Haryana Real Estate(Regulation and Development) Rules, 2017 against M/s M3M India Pvt Ltd. (developer/first respondent) seeking refund of Rs.1,36,34,517  alongwith interest at the rate of 24% p.a. and costs of litigation.

As per the complainants, a project known by the name and style of “M3M MARINA” situated in Sector 68, Gurugram was developed by the respondents. Coming to know about said project, they (complainants) booked a residential unit in said project and paid initial amount of Rs.5,00,000 on October 9,2014.

After the complainants submitted booking application ,the respondent made provisional allotment of unit  and total sale consideration was agreed as Rs 1,49,46,912. On receipt of Rs 23,01,548 respondent executed one sided Apartment Buyer’s Agreement (ABA) after 9 months of booking i.e. on May 18,2015.

The complainants had availed loan of Rs.82,00,000 from M/s Tata Capital Housing Finance Ltd, to pay to the respondent. It was then that an agreement was entered among the respondent and said M/s Tata Capital Housing Finance Ltd. Allotted unit had been mortgaged. 

According to the subvention scheme the respondent was liable to pay pre-EMIs to the lender i.e. M/s Tata Capital Housing Finance Ltd. till possession of apartment in question but said respondent stopped paying pre-EMIs w.e.f December 2019  forcing the complainants to pay pre-EMIs.

The buyers also averred that the respondent was duty bound to offer possession of the allotted unit to the complainants, within a period of 48 months, with grace period of 180 days. The home buyers received a letter for possession, from respondents but after visiting the project, they were shocked to see quality of construction and provision of amenities against the promised ones. Moreover, the builder had made several deviations in the building plans, contrary to specifications, as disclosed at the time of booking. 

Advocate Anuj Malhotra ,counsel for complainants , contended that the ABA was unilateral and there were clauses which were oppressive, one sided and against the interest of buyers/complainants. It was submitted that the terms of ABA were never agreed by his clients. The respondent failed to hand over possession in time, despite the fact that complainants had paid about 90% of sale consideration and that too by taking loan from TATA Capital under subvention scheme, after execution of tripartite agreement.

As per said agreement, the first respondent had undertaken to pay pre-EMIs to said finance company till possession of apartment was handed over to the complainants, but said respondent failed to fulfil its promise. The respondent was not entitled to benefit of grace period i.e. 180 days as there were no force majeure circumstances.

On the contrary, the respondent raised a preliminary objection with regard to jurisdiction of this forum, to entertain and adjudicate this complaint. It was averred that matter regarding powers of the authority and of adjudicating officer is still pending with the Apex court and hence this forum has no jurisdiction to adjudicate this complaint. It was also claimed that occupancy certificate for tower, in which the unit of the complainants is located, was applied and same had been granted by the competent authority on September 14, 2020.

The Adjudicating Officer, Rajender Kumar, opined that the Order of the Punjab & Haryana High Court upholding the validity of amendment in Haryana Real Estate(Regulation and Development) Rules, 2017 , has been stayed by the Apex  Court, which amounts to restoration of status qua ante i.e. when the complaints seeking refund, compensation and interest were entertained by the Adjudicating Officer. The Adjudicating Officer, thus, disagreed with the respondent alleging that this forum had no jurisdiction to try and entertain present complaint.

Referring to the decision rendered in the judgments  of the Bombay High Court in R.S. Deboo Vs Hindleker and of the National Consumer Disputes Redressal Commission, New Delhi in Naveen Khatri Vs Pareena Infrastructure & Ors (Consumer Case No.628/2077), the Adjudicating Officer observed that the terms and conditions of buyer’s agreement between parties of this case were unreasonable and favouring only the developer and the same were not enforceable.

The Authority was of the opinion that what so, if agreement between the parties was entered before the Act of 2016, came into force, project in question, being an on-going proiect, the developer respondent was duty bound to apply for registration within three months of Act coming into force.

It was affirmed that the terrns of agreement were one sided, and against the interests of buyer. According to complainants, same paid Rs.5,00,000 to the respondent at the time of booking of their unit. The respondent had received a sum of Rs.23,05,748 before ABA was executed. In this way, the respondent enjoyed the money paid by buyers which was a big amount without any explanation/reason. Even, after ABA was executed, terms of same were unreasonable. Date of commencement of period of limitation for handing over possession was fixed as the date of laying of the first plain cement concrete/mud-mat slab. It depended upon sweet will of respondent as when it lays plain cement concrete/mud-mat slab.

The Officer went on to add that the hapless buyer had no option but to sign agreement. Even, despite this, the respondent mentioned about alloltee, having agreed for extension of 180 days time. lt was not of much pinching for respondent, if same failed to fulfil its commitment in completing construction in time.

The Authority also added that as per agreement, respondent’s liability was limited to extent of paying Rs. 7.50 per sq. ft. of super area for delay in handing over possession but in event of buyer’s failure to pay even single instalment, buyer would be liable to pay interest on delayed payment @24%p.a. 

Further, the schedule for completion of construction, would not be binding upon it and also, the respondent had reserved its right to cancel this agreement (consequently by unit) and to forfeit the earnest money, which was 75 of total sale consideration and other amounts. In this way, the agreement was one sided, oppressive to buyer and biased in favour ofDeveloper and so ,the same was not binding upon the buyer/complainant.

“Being a special Act, RERA act over rides even covenants entered between the parties, in any agreement, if same are found contrary to provisions of this Act”, noted the Authority.

The Officer concluded by saying that the developer failed to hand over possession of the apartment in reasonable/agreed time and that building plans were deviated without consent/information of buyer’s/complainants. The buyers were thus well within their rights to claim refund of their amount.

Thus, the Authority allowed the complaint and directed the respondent to refund the amount received from the complainants and also from M/s Tata Capital Housing Finance Ltd. under tripartite agreement along with  burdening the respondent with cost of litigation, amounting to Rs.50,000 to be paid to complainants.

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