1. Present appeal has been preferred under The Maharashtra Real Estate (Regulation and Development) Act, 2016 (in short "the Act") against the order dated 18th February 2020 passed by learned Chairman, Maharashtra Real Estate Regulatory Authority, (MahaRERA) in Complaint No. CC 006000000079438.
2. Appellants are flat purchasers and complainants before MahaRERA. Respondent is the developer, who is developing a real estate project known as "Anand Kirti Tower", situated at HDIL layout, Virar (West), (in short "said project"). For convenience, appellants and respondent will be addressed hereinafter as complainants and promoter respectively in their original status before MahaRERA.
3. Brief background giving rise to the present appeal is as under;
a. Complainants booked flat No. 502 in "A" wing of the said project for total consideration of ` 22,75,000 and allotment letter dated 10th February 2013 was issued by the promoter on receipt of full and final payment of ` 22,75,000. Allotment letter further shows that possession the flat will be delivered in 18-24 months from the date of commencement of work. Promoter has received commencement certificate date 15th April 2014. Thereby, possession of the flat was agreed to be delivered by 14th April 2016. However, while registering the project with MahaRERA, promoter has revised the possession date as 31st December 2020.
b. Upon non-receipt of possession of flat before the agreed date and on inability of the promoter to commit any time frame for project completion, complainants cancelled booking and demanded refund of entire paid amount with compensation as per the Act. Promoter allegedly agreed to refund of paid amount to complainants. However, promoter refunded only a part of the paid amount. Instant complaint came to be filed by aggrieved appellants before MahaRERA seeking refund of the remaining paid amount together with interest and cost under the provisions of the Act.
c. Promoter appeared before MahaRERA and resisted complaint by submitting before MahaRERA that complainants have failed to come forward to execute and register agreement for sale despite reminders and even after explaining causes of delay for the project completion.
d. Upon hearing the parties, learned Chairperson, MahaRERA passed the impugned order dated 18th February 2020 by concluding inter alia that
"Accordingly, since no agreement for sale has been executed and registered between the parties, provisions of Section 18 of the Act do not apply to the present case.
8. In view of the above facts, the refund amount, if any, shall be as per the terms and conditions of the said allotment letter or as agreed between the parties."
e. Aggrieved by this order of MahaRERA, complainants have preferred the captioned appeal, seeking various reliefs including to direct promoter to refund of paid amounts together with interest and compensations.
4. Heard parties.
5. Complainants have sought refund in the current appeal citing inter alia following grounds;
a. MahaRERA has erred in holding that since no agreement for sale has been executed and registered between the parties, provisions of section 18 of the said act does not apply. This is contrary to the provisions of the said Act, rules made there under and is also not in keeping with precedents set by this Tribunal.
b. Placed reliance on the judgment of this Tribunal in the case of Manjeet Singh Dhaliwal and Ors. vs. JVPD Properties Pvt. Ltd. Wherein, it was held that "Section 2(c) of the Act deals with agreement for sale means an agreement entered into between the promoter and allottee. It is only the difference of nomenclature; one may brand it as letter of allotment or one may brand it as an agreement or one may brand it as provisional agreement or define it as an acceptance letter. However, it will not dilute the terms settled between the parties of a purchaser, seller of property and price agreed upon in schedule and details of the property."
c. "Basically, an agreement is meeting of minds even without legal obligations. The agreement is a form of contract relating to offer, consideration, time schedule, clarity of title and as to essence of time. The allotment letter incidentally is couched in such a fashion to incorporate all requisite terms. Hence, letter of allotment will not scuttle rights of Allottees."
d. It was further held that as long as the terms of the allotment letter are clear between both parties, it is the right of the appellants to receive interest and compensation as per the Act.
Accordingly, MahaRERA has erred in holding that contractual obligations read with the Act does not entitle allottee to get refund with interest in absence of sale agreement.
e. Promoter has not raised objections to contractual relations and appellants are entitled for refund under section 12 of the Act, along with interest.
f. After taking more than 10% of the payments as is the case on hand, onus to execute agreement for sale is on promoter as per the provisions of section 13(1) of the Act.
g. Project completion date in the instant case has been revised to December 2020 beyond the agreed date for delivery of possession and promoter has already agreed for refund with interest. Accordingly, complainants have right to withdraw from the project and get full refund together with interest and compensation.
h. Impugned order is illegal, arbitrary, without application of mind, bad in law and void in contravention to the provisions of law and the Act.
6. Per Contra, promoter submits that
a. Complainants have failed to enter into the agreement for sale despite several requests and follow ups.
b. Said project is situated at HDIL layout and project construction got delayed on account of several genuine reasons beyond the control of promoter. Complainants have been kept informed about all these of delays well in advance.
c. MahaRERA has granted extension of the project completion date and revised project completion date is December 2020 as reflected on the MahaRERA website.
d. Complainants disagreed to the revised date of possession, complainants requested promoter in August 2018 to come out of the project and cancelled booking of the flat, which has been accepted and clearly mentioned in the appeal memo itself. Promoter never forced complainants for withdrawal from the project.
e. Promoter agreed to refund without interest and after deducting ` 2,75,000 as marketing and brokerage charges upon sale of the said flat in the open market. It was decided among parties that respondent/promoter shall refund ` 20,00,000 as full and final settlement towards claim of the flat and therefore, announced to be cancelled. Promoter paid ` 5,00,000 immediately.
f. After accepting the said amount of part refund, appellants filed captioned complaint before MahaRERA. Promoter has further refunded an additional amount of ` 5,00,000 on August 2020 and in total, ` 10,00,000 have been refunded out of the agreed amount.
g. Complainants have already accepted part refund before filing the complaint and after the impugned order of the MahaRERA. Accepting part consideration and accepting cancellation of booking, complainants have waived of their rights to be allottees in the project. Accordingly, complainants are no longer allottees and not liable to claim any further reliefs under the Act.
h. The dispute was already peacefully settled and was accepted by both parties. Accordingly, part refund was also accepted by complainants. Therefore, urged to dismiss the appeal with cost.
7. From the rival pleadings, submissions and documents relied upon by parties, following points arise for our determination in this appeal and we have recorded our findings against each of them for the reasons to follow:-
POINT(S) for determination
In the absence of agreement for sale, whether provisions of the Act including Section 12 and 18 of the Act of 2016 will be applicable in the case on hand?
In the affirmative.
Whether appellants continue to be allottee even after receipt of part refund from promoter?
In the affirmative.
Whether promoter has violated the provisions of Section 13 of the Act?
In the affirmative.
Whether appellants are entitled for full refund with interest as prayed for?
In the affirmative.
Whether impugned order is sustainable in law?
In the negative.
8. In the case on hand, allotment letter has been issued by promoter but agreement for sale has not been executed. Whereas, MahaRERA in its impugned order has concluded that "since no agreement for sale has been executed and registered between the parties, provisions of Section 18 of the Act do not apply to the present case."
9. However, decisions in the judgment of this Tribunal in the case of Manjeet Singh Dhaliwal and Ors. vs. JVPD Properties Pvt. Ltd., are as under;
"Section 2(c) of the Act deals with agreement for sale means an agreement entered into between the promoter and the allottee. It is only the difference of nomenclature; one may brand it as letter of allotment or one may brand it as an agreement or one may brand it as provisional agreement or define it as an acceptance letter. However, it will not dilute the terms settled between the parties of a purchaser, seller of property and price agreed upon in schedule and details of the property."
10. Allotment letter already issued in the present case reflects agreed positions between the parties and contains important ingredients of the agreement for sale. Accordingly, allotment letter will not dilute the settled terms between the parties of purchaser, seller of property and price agreed upon in schedule including details of the property. Thereby, provisions of the Act including that of the Sections 12 and 18 will continue to be applicable for entertaining complaint and also for the purpose of adjudication of the instant case. Accordingly, point 1 is answered in the affirmative.
11. Complaints status on acceptance of part refund: Promoter submitted that complainants have already accepted part refund and by accepting part consideration including by acceptance of cancellation of booking, complainants have waived of their rights to be allottees in the project. Learned counsel for promoter further submitted that complainants are no longer allottees and not liable to claim any further reliefs under the Act.
12. It is not in dispute that only a part of ` 10,00,000 out of total paid amount of ` 22,75,000, has been refunded by promoter and remaining paid amount of complainant is still lying with the promoter.
13. Response of promoter further reflects that "Promoter agreed to refund without interest and after deducting ` 2,75,000 as marketing and brokerage charges upon sale of the said flat in the open market." Accordingly, the response of promoter is conditional and promoter has not demonstrated fulfillment of this condition of "upon sale of the said flat in the open market". In view of the non-fulfillment of this condition, the flat continues to be in the name of the complainants.
14. In view of above, we find that cancellation process appears to have initiated but has neither completed nor attained its finality for want of non-fulfillment of condition mentioned therein and also due to only partial refund. Therefore, contention of promoter that complainants are no longer allottees is ex-facie not tenable.
15. Promoter in its written submissions of the appeal has further submitted that "Complainants disagreed to the revised date of possession and requested promoter in August 2018 to come out of the project and cancelled booking of the flat, which has been accepted and has been clearly mentioned in the appeal memo itself. Promoter never forced complainants for withdrawal from the project."
16. However, promoter has further submitted in written submissions that "Accepting part consideration and accepting cancellation of booking, complainants have waived of their rights to be allottees in the project. Accordingly, complainants are no longer allottees and not liable to claim any further reliefs under the Act."
It is clear from the above that it is not a case of simplicitor withdrawal from the project rather the primary reason of cancelling the booking/filing of complaint appears to be on account of revision and extension of the possession delivery date as well as due to delay in project completion. This delay beyond agreed date, in any case, is not on account of the complainants. In fact, such delays in delivery of the possession confer statutory right upon complainants under the Act to exercise option including for refund of the paid amount. Accordingly, it appears that complainants have exercised this very right, which has accrued to them on account of delay in delivery of the possession beyond the agreed date. Thereby, complainants have requested for refund of paid amount.
17. Considering above and particularly when, promoter himself has submitted that complainants "disagreed to the revised date of possession, thereby requested for cancellation of booking", it is hard to accept the contention of promoter that complainants have waived of their rights to be allottees in the project. Accordingly, contentions of promoter that complainants are no longer allottees and are not eligible to claim any further reliefs under the Act are not acceptable.
18. Therefore, we hold that the said flat continues to be allotted in the name of complainant, relationship between promoter and allottee already established earlier, has not changed and complainants continues to be allottees under the Act of 2016. In view of above, provisions of the Act will continue to be applicable in the said project and also for adjudication of the complaint. Thereby, we answer the point No. 2 in the affirmative.
19. Compliance of section 13: It is not in dispute that complainants have fully paid the total considerations of ` 22,75,000 of the flat and allotment letter dated 10th February 2013 has also been issued by promoter on receipt of full and final payments of total considerations. But agreement for sale has not been executed despite receipt of 100% payments.
20. Whereas, 13(1) of the Act prescribe that "1) A promoter shall not accept a sum more than ten percent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force. "corresponding provisions under MOFA is 20%.
21. In view of above, it is crystal clear that by raising demands and accepting payments more than 10%/20% of the total considerations from complainants, promoter has not complied with the provisions of section 13. Accordingly, promoter by failing to fulfill its statutory obligations cast under the provisions of section 13(1), has undermined the fundamental intents behind the welfare legislation of the Act. Accordingly, we answer the point No. 3 in the affirmative.
Points 4 and 5:
22. Issue in respect of possession delivery date: While registering the project with MahaRERA, promoter had initially proposed for project completion date as 31st March 2017, which has further been revised to 31st December 2020 and been placed on the website.
23. But revised possession delivery date is not tenable in the light of the paras 119 and 256 of the Judgment of The Hon'ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. vs. UOI & Ors. dated December 06, 2017 in writ petition number 2737 of 2017, which clarifies that" The RERA. does not contemplate rewriting of contract between the flat purchaser and the promoter." Para 256 of this Judgment further clarifies that "by giving opportunity to the promoter to prescribe fresh time line under Section 4(2)(I)(C), he is not absolved of the liability under the agreement for sale".
24. Moreover, delivery date mentioned on MahaRERA's website is revised unilaterally without consent of complainant. Therefore, it is not binding on complainant. Accordingly, project completion date mentioned on the website of MahaRERA cannot be taken as the agreed possession delivery date.
25. Moreover, promoter himself has submitted that project construction got delayed on account of the several genuine reasons beyond the control of the promoter and this have been communicated to complainants well in advance.
26. MahaRERA has also recorded in para 3 of the in the impugned order as "promoter himself has submitted before MahaRERA that he has explained the cause of delay in project completion to complainants on several occasions and is willing to execute and register the agreement for sale and handover possession by December 2020."
27. Thereby, it i
s crystal clear that the said flat has not been delivered within the agreed date. Whereas, Section 18 Act, specifically mentions that "If the promoter fails to complete or is unable to give possession of an apartment, plot or building then, 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." 28. Thereby, complainant is entitled for refund of paid amount with interest at prescribed rate for the delay in delivery of possession of the said flat, impugned order suffers from infirmities and calls for interference in this appeal. Accordingly, we answer points 4 and 5 accordingly. 29. In view of above as well as after considering overall circumstances, contexts of the case and upon diligent analysis of the material on record, we are of the considered view that promoter is liable to refund remaining paid amount to the complainants with interest from the date of receipts of payments and we proceed to pass order as under: ORDER (i) The appeal is partly allowed. (ii) Impugned order dated 18th February 2020 passed by MahaRERA in Complaint No. CC006000000079438 is set aside. (iii) Promoter is directed to refund the remaining paid amount to complainants together with interest thereon, from the date of receipts of respective payments @ 2% per annum above the SBI's highest marginal cost of lending rate within one month of this order failing which, promoter to pay interest at above rate on the total such payable amounts as on 30th September 2022 to complainants till realisation. (iv) No order to costs. (v) In view of the provisions of Section 44(4) of the Act of 2016, copy of the Judgment be sent to the parties and MahaRERA.