1. This appeal has been filed by the Lucknow Development Authority (hereinafter referred to as ‘the appellant’) against the judgment and order dated 03.06.2019 passed by the Uttar Pradesh Real Estate Regulatory Authority, Lucknow (hereinafter referred to as ‘the Regulatory Authority’) in Complaint no. 12201826991 (Uma Shankar Dubey v. Lucknow Development Authority) whereby the appellant has been directed to provide all basic facilities as mentioned in the Registration Booklet within 45 days and ensure to provide possession after completing other facilities in accordance with law. The appellant was further directed to constitute a Society under the Uttar Pradesh Apartment Act, 2010 and hand over the apartments to the allottees.
2. The case was registered as Misc. Case No. 382/2019 and subsequently registered as Appeal No. 1 of 2020. The appellant was represented by Shri Abhinav Singh, Advocate and Shri Uma Shanker Dubey, the respondent, argued the case in person.
3. The facts giving rise to present appeal, as culled out from the pleadings are that the appellant is a Development Authority constituted under the provisions of the U.P. Urban Planning and Development Act, 1973, and is an instrumentality of the State which works on no profit and no loss basis. As such the appellant does not stand on same pedestrian of other Real Estate Developers who are involved in the Real Estate business for earning profits. Being instrumentality of the State and non-profit making Real Estate Developer, the schemes which are being developed by the appellant are for the purpose of meeting out residential needs of the public at large in the city of Lucknow, at affordable rates. A Scheme of multistoried residential apartment known as ‘Greenwood Apartments’ was floated by the appellant at Sector-1, Extension, Gomti Nagar Extension, Lucknow, in the year 2010. The Greenwood Apartments consist of 9 blocks having total 736 flats of different sizes and specifications. These apartments have been completed by the appellant as per lay out plan. Out of total 736 flats, possession of 636 flats has already been handed over to the concerned allottees prior to coming into force of the Uttar Pradesh Real Estate (Regulation and Development) Act, 2016 (hereinafter referred as to as ‘the Act, 2016’). The complainant/respondent was allotted flat no. 407 in J Block of Greenwood Apartment, the same was handed over to the respondent on 27.05.2017, and the sale deed of the same has also been executed in favour of the respondent. At the time of execution of the sale deed in favour of the respondent the final cost of the apartment which was charged by the appellant was also calculated on no profit no loss basis. Proportionate cost incurred by the appellant towards amenities and administrative expenditure was also charged. As such the respondent has been charged only for what has been actually delivered and not a penny towards the profit has been charged.
3.1 The appellant has further submitted that the possession of the flat in question was accepted by the respondent without making any objection regarding completion of the flat. Although the apartment in question was completed prior to coming into force of the Act, 2016, however, with some ulterior motive, the respondent preferred the complaint before the Regulatory authority. In the said complaint two fold allegations were made by the respondent against the appellant (i) that blocks I and J of Greenwood Apartments were incomplete as per promise made by the appellant and (ii) that the appellant has not formed the Residents’ Welfare Association and without any public notice has removed the security in December, 2017. Besides the aforesaid complaint the respondent also wrote a letter dated 18.12.2018 to the appellant alleging that various development works are incomplete, exhaust fan in kitchen has not been installed, windows are incomplete, club is not available, lift, staircase and floor of common area is incomplete. These allegations of the respondent were absolutely baseless and incorrect.
3.2. The impugned judgment and order dated 03.06.2019 passed by the Regulatory Authority has been challenged by the appellant on the grounds that (a) while passing the impugned judgment and order the Regulatory Authority failed to satisfy itself with any proof like photograph etc. as to whether the flat was handed over to the respondent in incomplete condition without doors and windows or not, (b) while passing the impugned judgment and order the Regulatory Authority completely failed to consider that the Act, 2016 being prospective in nature could not have been applied in respect of the building which has been completed prior to coming into force of the Act, 2016, (c) the Regulatory Authority failed to consider that the complaint preferred by the respondent was barred by the doctrine of acquiescence and doctrine of waiver, (d) the Regulatory Authority presumed the allegations of the respondent to be a gospel truth without there being any evidence to substantiate the same, (e) the Regulatory Authority failed to consider that the complainant had no locus standi to maintain the complaint in respect of Block I of Greenwood Apartment as the flat allotted to the complainant/respondent was in Block J, (f) the Regulatory Authority completely ignored the fact that once a residents’ welfare association has been duly constituted then the appellant is denuded from power to constitute a different residents’ welfare association, (g) the impugned judgment and order has been passed by the Regulatory Authority without application of mind, (h) merely on the basis of written complaint by the respondent adverse conclusion was drawn by the Regulatory Authority against the appellant without looking deep into the matter and even without initial shifting of burden of proof regarding the allegations of the respondent the impugned judgment and order was passed, (i) the Regulatory Authority completely failed to arrive at any conclusive finding as to which of basic amenities and other amenities were not completed by the appellant, as such the impugned judgment and order is absolutely vague and non-conclusive, (j) by means of the impugned judgment and order directions have been issued to perform impossible task which is illegal and impermissible, (k) on account of being a prospective Act the provisions of penalty/compensation introduced for the first time by means of Act, 2016, cannot be imposed in respect of any cause of action which has arisen prior to coming into force of the act, 2016. Thus the provisions of Section 14 of the Act, 2016 do not apply of the project in question, and (l) the impugned judgment and order dated 03.06.2019 passed by the Regulatory Authority suffers from material irregularity and has been passed without application of judicial mind.
4. The respondent, in his objection, submitted that the apartment is still incomplete. The appellant is not following the policy of no profit no loss. Block ‘I’ and Block ‘J’ are still incomplete. Club and parks have not been provided as promised in the booklet. Fire fighting system is not working. Unhygienic water is being supplied. Residents’ Welfare Association has not been formed by the appellant. Crores of rupees were taken from the allottees which were neither returned nor its interest is being paid to the allottees. Rs. 15,000/- was charged from every allottee for PNG connection which was raised to Rs. 20,000/- per allottee while the cost of PNG connection is Rs. 6,000/- only and the appellant has paid at the rate of Rs. 6,000/- per PNG connection. Completion certificate has not been issued. The sale deed of his flat no. J-407 was executed on 27.05.2017 but the work has not been completed. At the time of allotment the cost of his flat was Rs. 20,50,000/- but at the time of execution of the sale deed the cost has been increased by more than five lac rupees. The appellant removed security from 31 December, 2017 by issuing a public notice. The appellant started charging maintenance by making the registry of the sale deed basis for the same. Electric transformer has been installed only on 28.02.2015. The appellant had promised to provide UPVC window but the window of UPVC has not been provided. It is wrong to say that the appellant has constituted the Residents’ Welfare Association, but the allottees themselves constituted the Residents’ Welfare Association to resolve the problem of security, cleaning, water and electricity. Rain water enters inside through the windows and staircase. Since the appellant (LDA) is a government institution, therefore, trusting on it the public booked its flats but the appellant deceived the public.
5. In its reply/rejoinder the appellant submitted that all the 9 blocks of Greenwood Apartment have been constructed and completed on 25.07.2014, which is evident from the final bill voucher of contractor wherein the officials of the appellant have certified that the work was completed on 25.07.2014. On Structural completion of the building Provisional No Objection Certificate was issued from the Fire department on 02.04.2012 and after final completion of all the 9 blocks of the project final fire fighting certificates dated 07.11.2014 were issued by the Fire Department in respect of all blocks of Greenwood Apartment. So far as issuance of Occupation Certificate of the building/project is concerned, there is no provision under the Uttar Pradesh Urban Planning and Development Act for issuance of occupation certificate. Prior to coming into force the Act, 2016 there was no custom for getting the completion certificate in Lucknow Development Authority for the projects developed by it. However, after coming into force the Act, 2016 the formalities of getting completion certificate for the project in question have also been completed and completion certificate has been issued on 24.06.2019. The amenities/specifications of the building were provided in clause 2.2 of the brochure. Out of the mentioned specifications, one exhaust fan has not been provided and instead of UPVC windows, wooden window panels have been provided. No cost for exhaust fan and UPVC windows has been included in the costing of the flat and only the cost for those items which have actually been provided at the site has been charged in accordance with the costing guidelines issued by the State Government. The apartment was completed in the year 2014 and 1 possession in Greenwood Apartment was handed over on 05.02.2014. Possession of total 115 out of 168 apartments in ‘I’ and ‘J’ blocks were handed over to the concerned allottees till May, 2017 i.e. prior to coming into force of the Act, 2016. The first sale-deed of flat in ‘I’ and ‘J’ Block was executed in favour of the concerned allottee on 27.05.2014.
5.1. Further submission is that the respondent is trying to mislead this Tribunal by referring to the letters issued in 2019 whereas the policy of installation of LPG pipeline was changed in the year 2018 vide Government Order dated 30.05.2018, whereby the policy of Dig and Restore has been implemented. The appellant has charged minimum amount which has been incurred by the appellant as per the costing guidelines. The construction has been completed in accordance with the lay out plan approved from the Board of Lucknow Development Authority. The Greenwood Apartment contains all the facilities like permanent borewell, parks, community centre and equipments of firefighting. By public notice the appellant had required the residents of tower ‘I’ and ‘J’ to form Residents’ Welfare Association in accordance with the Apartment Act. The Residents' Welfare Association was formed by the residents of the aforesaid towers and the amount of Maintenance Fund, as demanded, has been transferred to the aforesaid Residents' Welfare Association. As such there is no occasion for the appellant to form a new Residents’ Welfare Association. Note 2 appended to clause 2 of the brochure clearly provides that the corpus fund shall be handed over to the Residents' Welfare Association in the contingency of major maintenance of common area and facilities. The aforesaid corpus fund has been maintained by the appellant in the interest bearing saving account and the same would be released as per the demand of the Residents' Welfare Association as and when the need for any major maintenance of common areas and facilities arises.
6. On examination of the pleadings and submissions of learned counsel for the appellant and the respondent, the admitted facts are culled out as follows:—
6.1. A Scheme of multistoried residential apartment known as ‘Greenwood Apartments’ was floated by the appellant at Sector-1, Extension, Gomti Nagar, Lucknow, in the year 2010. The Greenwood Apartments consist of 9 blocks having total 736 flats of different sizes and specifications.
6.2. The complainant/respondent was allotted flat no. 407 in J Block of Greenwood Apartment and the same was also handed over to the respondent on 27.05.2017 and the sale deed of the same was also executed in favour of the respondent.
6.3. The completion certificate of the project was issued by the competent authority to the appellant on 24.06.2019. The respondent feeling aggrieved of the deficiencies and shortcomings of the project, approached the Regulatory Authority vide Complaint No. 12201826991 (Uma Shankar Dubey v. Lucknow Development Authority), making complaint of non-fulfillment of the promise mentioned in the Brochure and non-formation of the Association of Apartment Owners' and withdrawal of the security vide public notice in December, 2017 and sought relief of the Registration of ‘I’ and ‘J’ Block of the Greenwood Apartments with the Regulatory Authority. The Regulatory Authority on the basis of the submissions of the respective parties framed two questions and after examining the submissions of the parties and materials on record, directed the respondent (present appellant) to provide all the basic facilities and other facilities after completing them legally, as mentioned in the registration booklet within 45 days and after constituting a Society as per the provisions of Uttar Pradesh (Promotion of Construction, Ownership and Maintenance) Act, 2010 a Society be handed over to the allottees.
6.4. We have examined the submission of Shri Abhinav Singh, learned counsel for the appellant and Shri Uma Shankar Dubey, the respondent in person as well as impugned order dated 03.06.2019 passed by the Regulatory Authority and on the basis of the submission of learned counsel for the appellant, we frame following issues/questions in order to test the impugned order:
(i) Whether the Regulatory Authority failed to consider the fact that Act of 2016, being prospective in nature, could not have been applied in respect of the building which has been completed prior to coming into force of the Act of 2016?
(ii) Whether any cause of action which has arisen prior to coming into force of Act of 2016 can be looked into by the Regulatory Authorit?.
(iii) Whether the provisions of Section 14 of the Act, 2016 are not applicable to the Project in question?
(iv) Whether the Resident Welfare Association has been constituted by the allottees/residents on their own is in consonance with the provisions of Section 14(2) of the Uttar Pradesh (Promotion of Construction, Ownership and Maintenance) Act, 2010, and if not whether appellant/promoter was required to take action for rectification of the same?
(v) Whether any deficiency or shortcomings in the amenities, features and service mentioned in the brochure of the promoter/appellant are required to be completed by the promoter/appellant?
7. In order to examine issues nos. (i), (ii) and (iii), we proceed to examine the relevant provisions of the Real Estate (Regulation and Development) Act, 2016.
7.1. The preamble of the Real Estate (Regulation and Development) Act, 2016 (herein after referred to as the ‘Act of 2016’), provides to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto. From the preamble it is evident that the Act, 2016 has been promulgated for regulation and promotion of real estate sector and sale of real estate in an efficient and transparent manner and to protect the interest of consumers in the real estate sector.
7.2. In Chapter 1 (which normally provides for applicability and exemptions under an Act) nowhere, it is mentioned that this Act is applicable only to registered projects. It has also not been indicated anywhere in the Act, 2016 that certain projects are out of the ambit of the Act, 2016. Section 3(2) only provides for those categories of projects where no registration shall be required.
7.3. The definition of the project provided in section 2(zj) reads as under:—
Section 2(zj):—
“project” means real estate project as defined in clause 2(zn) under this Act.
Section 2(zn):—
“real estate project” means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof, into apartments or the development of land into plots or apartment, as the case may be, for the purpose of selling all or same of the said apartments or plots or building, as the case may be, an includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto;.
Accordingly, project means a real estate project as defined in clause 2(zn).
In this definition, it is not mentioned that real estate project means registered real estate project. There is requirement of prior registration of real estate projects, unless exempted, and also restriction on certain activities without registering the projects. Registration of real estate projects for certain categories have been exempted from prior registration under Section 3(2) but not from the provisions of Act, 2016. Otherwise, it would have been mentioned in the applicability part by saying that this Act is applicable only to registered real estate projects.
7.4. The domain of the authority extends even to the projects which have not been registered, and also not exempted from registration. No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act. In case of violation, the Regulatory Authority may take action for non-registration under Section 59. Accordingly, the projects which have not been registered, but are registrable in case of violation of Section 3 comes within the domain of the authority and authority is well within its power to initiate penal proceedings and also to entertain complaints regarding violation of the provisions of the Act. The Regulatory Authority cannot take a stand that the project is unregistered and accordingly it has no jurisdiction to entertain the complaint. Where will the complainant go? The complainant may make a complaint to the Regulatory Authority regarding non-registration of the project as well as may request the Regulatory Authority for compliance of obligations by the promoter in case the promoter violates any of the provision of the Act, the rules and the regulations made there under. The Regulatory Authority in such case cannot take a stand that let project be got registered and only thereafter it will entertain the complaint. If a complaint in such cases is not entertained by the Regulatory Authority, a scrupulous promoter or builder or developer may not register the project to avoid jurisdiction of the Regulatory Authority. This will frustrate the very purpose of the Act regarding giving relief to the complainant and ensuring compliance of the obligations by the promoters, real estate agents and allottees.
7.5. The Act provides for obligations of the promoter, real estate agent and allottees both during the registration phase as well as post-expiry of validity of registration i.e. after the completion of the project. The obligations post-expiry of the validity of registration are to be ensured by the authority both in case of projects which were registered, and validity of registration expired as well as for the projects where completion certificate was obtained prior to coming into force of this Act and exempted from prior registration. The obligations of the promoter after completion of the project such as handing over of possession and executing a registered conveyance deed within specified period, workmanship and structural defects rectification liability upto five years after giving possession, land title defect liability without any limitation period etc. are applicable for all the real estate projects, both registered as well as exempted from prior registration.
7.6. Further, in case of a project where completion certificate has been obtained for a real estate project but there is unsold inventory left out then it is true that there won't be any requirement of prior registration of the project as the project has already been completed prior to coming into force of this Act. The registration of projects serves mainly three purposes.
(i) to monitor the progress of the project so that the project is completed timely;
(ii) to ensure that the amount collected from the buyers is not diverted to any other purpose; and also
(iii) to see that layout plan, building plan, specifications etc. as approved by the competent authority are followed by the promoter. The requirement of registration is to monitor the project from commencement to completion. The validity of registration expires on issuing of completion certificate or on expiry of period for completion of project declared by promoter under section 4(2)(l)(c), keeping in view the provisions of section 5(3).
7.7 There are certain obligations of the promoters which are to be complied by them. Some of these obligations are during registration phase and some of the obligations are post expiry of validity of registration. Accordingly, there are large number of obligations of the promoter which are not linked with the completion of the project, but those provisions relate to regulating relationship between promoter and allottee such as conveyance deed, giving possession, workmanship and structural defect rectification liability, defective land title liability, etc. The projects which have been issued completion certificate prior to commencement of the Act have been taken out of prior registration requirement, but not out of the ambit of the Act. The unsold inventory of such projects sold after commencement of this Act falls within the purview of this Act as these projects have not been kept out of the ambit of the Act, 2016.
7.8 After the commencement of Act, 2016, the buyers of the real estate, out of unsold inventory where the promoter has obtained completion certificate prior to commencement of the Act, cannot be left in lurch in case possession is not handed over or conveyance deed is not made as per the agreement for sale, defective land title, structural defect and workmanship defects, etc. Whenever sale of real estate takes place after commencement of Act of 2016 and a project qualifies to be a real estate project as per definition given in the Act and the promoter is covered in the definition of promoter as given in the Act, then a complaint in respect of matters where this Act casts certain obligations upon the promoter can be made to the Regulatory Authority. There cannot be two different authorities to be approached for similar types of complaints. The registration certificate of real estate project is valid from the date of registration and it expires as soon as the project is completed, and the completion certificate is issued i.e. the time period declared by the promoter in accordance with section 4(2) (??) (C) for completion of the project. Hence, even after the expiry of validity of registration there are large number of obligations which are to be discharged by the promoter. Hence, in respect of those obligations complaints of projects registered or exempted irrespective of the fact whether the sale has taken place before the commencement of the Act or after commencement of the Act can be made to the Regulatory Authority and such projects are squarely covered in the ambit of the Real Estate Regulatory Authority. In nutshell, this Act primarily protects the interest of the consumers in case of sale of real estate.
7.9 There will be three categories of real estate projects which can be sold by a promoter:
(i) Real estate projects where completion certificate of the project has been obtained prior to commencement of the RERA Act, 2016 but there is unsold inventory of real estate project.
(ii) The real estate projects which are “on-going” and where the completion certificate has not been issued on the date of commencement of the RERA Act, 2016. So, these are to be registered as real estate projects with the Regulatory Authority.
(iii) New real estate projects to be taken up after commencement of this Act: Here, there can be two types of real estate projects which can be put to sale by the promoter. (a) where the promoter intends to market/sell real estate project only after obtaining completion certificate; (b) where promoter intends to advertise, market or sell real estate during construction phase i.e. prior to obtaining completion certificate.
All these projects come within the ambit of the Real Estate Regulatory Authority. A complaint pertaining to violation of any of the provisions of the Real Estate (Regulation and Development) Act, 2016, the Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016 and regulations there under, may be filed by any aggrieved person in respect of real estate belonging to any real estate project which qualifies to be real estate project as per the definition given in section 2(z)(n) of the Real Estate (Regulation and Development) Act, 2016.
7.10 Chapter 2 of the Act , 2016 relates to registration of real estate projects. Section 3 of the Act, 2016 provides prior registration of real estate project with the Real Estate Regulatory Authority as follows:—
3. Prior registration of real estate project with Real Estate Regulatory Authority.—
“(1) No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act …….”
Section 3(1) provides for certain restrictions on the promoter without registering a real estate project with the real estate regulatory authority concerned.
The proviso to Section 3(1) further provides for registration of ongoing Projects:—
“……Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act.”
This provision requires that the projects which fulfill following two conditions are required to be registered within a period of three months from the date of commencement of this Act. The commencement date of the Real Estate (Regulation and Development) Act, 2016 is 01.05.2017, except Section 2, 20 to 39, 41 to 58, 71 to 78 and 81 to 92, which came into force with effect from 01.05.2016. Accordingly, by 31.07.2017 the following projects covered in proviso 3(1) of the Act have to register with the Regulatory Authority:
(i) The projects that are ongoing on the date of commencement of the Real Estate (Regulation and Development) Act, 2016; and
(ii) The projects for which completion certificate has not been issued.
For the issuance of the completion certificate material date is 01.05.2017 i.e. the date of commencement of the Real Estate (Regulation and Development) Act, 2016. Accordingly, all those projects where completion certificate has not been issued on the date of commencement of this Act are necessarily to be registered with the Regulatory Authority within a period of three months.
The proviso to section 3(1) provides that the projects that are ongoing on the date of commencement of this Act and for which completion certificate has not been issued, the promoter shall make an application to the authority for registration of the said project within a period of three months from the date of commencement of the Act. This Act came into force on 01.05.2017- barring some sections which came into force on 01.05.2016. Accordingly, for the on-going projects registration was to be applied by the promoter within three months, i.e., by 31.07.2017.
7.11 Section 3(2) provides those categories of projects where no registration of real estate projects shall be required. The section 3(2) reads as under:—
“Notwithstanding anything contained in sub-section (1)- no registration of the real estate project shall be required-
a) where the area of/and proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases:
Provided that, if the appropriate Government considers it necessary, it may, reduce the threshold below five hundred square meters or eight apartments, as the case may be, inclusive of all phases, for exemption from registration under this Act;
b) where the promoter has received completion certificate for a real estate project prior to commencement of this Act;
c) for the purpose of renovation or repair or re-development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project
Explanation.— For the purpose of this section, where the real estate project is to be developed in phases, every such phase shall be considered a stand-alone real estate project, and the promoter shall obtain registration under this Act for each phase separately.”
In sub-section 3 (2) (b) it has been mentioned that those projects where the promoter has received the completion certificate for real estate project prior to commencement of the Act, 2016 have been taken out of the ambit of registration and not the real estate projects which may have received the completion certificate after the commencement of this Act. Section 3(2) exempts certain categories of real estate projects only from prior registration related provisions but not from the ambit of other provisions of the Act, 2016.
7.12 From the plain reading of section 3, it is evident that the projects for which the completion certificate has been issued prior to commencement of this Act have only been exempted from prior registration, if the proviso to section 3(1) is read with section 3(2)(b). Section 3(2) provides for categories of projects where no prior registration shall be required. This section 3(2)(b) specifically provides that no prior registration of the real estate project shall be required where the promoter has received completion certificate for a real estate project prior to commencement of this Act, i.e. prior to 01.05.2017.
There is no need to re-define ongoing project, since all projects where completion certificate has not been issued are ongoing projects and completion certificate issued by the competent authority on or before 30.04.2017 is the conclusive proof of the fact that the project is complete, and it is not “on-going”.
7.13 On the basis of aforesaid analysis, we are of the considered view that Act, 2016 mentions nowhere that it is applicable only for registered projects. The Act, 2016 does not provide certain categories of projects that are not required to be registered but these are well within the ambit of the Act. These projects mentioned in Section 3(2) have been taken out of the prior registration requirement, but not out of purview of other provisions of the Act. The provisions regarding registration and obligation during registration are applicable only for the registered projects.
8. Now we proceed to examine the provision of Section 14 of the Act of 2016, which mandates adherence of sanctioned plan and project specified by the promoter. For the convenience, Section 14 is reproduced as follows:—
14. Adherence to sanctioned plans and project specifications by the promoter.- (1) The proposed project shall be developed and completed by the promoter in accordance with the sanctioned plans, layout plans and specifications as approved by the competent authorities.
(2) Notwithstanding anything contained in any law, contract or agreement, after the sanctioned plans, layout plans and specifications and the nature of the fixtures, fittings, amenities and common areas, of the apartment, plot or building, as the case may be, as approved by the competent authority, are disclosed or furnished to the person who agree to take one or more of the said apartment, plot or building, as the case may be, the promoter shall not make—
(i) any additions and alterations in the sanctioned plans, layout plans and specifications and the nature of fixtures, fittings and amenities described therein in respect of the apartment, plot or building, as the case may be, which are agreed to be taken, without the previous consent of that person:
Provided that the promoter may make such minor additions or alterations as may be required by the allottee, or such minor changes or alterations as may be necessary due to architectural and structural reasons duly recommended and verified by an authorised Architect or Engineer after proper declaration and intimation to the allottee.
Explanation.—For the purpose of this clause, “minor additions or alterations” excludes structural change including an addition to the area or change in height, or the removal of part of a building, or any change to the structure, such as the construction or removal or cutting into of any wall or a part of a wall, partition, column, beam, joist, floor including a mezzanine floor or other support, or a change to or closing of any required means of access ingress or egress or a change to the fixtures or equipment, etc.
(ii) any other alterations or additions in the sanctioned plans, layout plans and specifications of the buildings or the common areas within the project without the previous written consent of at least two-thirds of the allottees, other than the promoter, who have agreed to take apartments in such building.
Explanation.—For the purpose of this clause, the allottees, irrespective of the number of apartments or plots, as the case may be, booked by him or booked in the name of his family, or in the case of other persons such as companies or firms or any association of individuals, etc., by whatever name called, booked in its name or booked in the name of its associated entities or related enterprises, shall be considered as one allottee only.
(3) In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, it shall be the duty of the promoter to rectify such defects without further charge, within thirty days, and in the event of promoter's failure to rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation in the manner as provided under this Act.
9. In our considered view,
(a) the obligation of the promoters, post expiry of validity of registration provided in the Act are applicable to even the real estate projects exempted from prior registration.
(b) The projects which were completed and handed over during last five years are covered for the purpose of workmanship and structural defect liability. A complaint can be filed by the allottee in such matter in case possession of the real estate was within five years prior to date of complaint.
(c) All real estate projects are covered for land title defect liability, and there is no bar by limitation provided under any law for the time being in force.
9.1 A complaint pertaining to violation of provisions of the Act, 2016, the Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016 and regulations there under may be filed by any aggrieved person in respect of real estate belonging to any real estate project which qualifies to be real estate project as per the definition given in section 2(z)(n) of the Real Estate (Regulation and Development) Act, 2016.
10. The Hon'ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India decided on 06.12.2017 was pleased to observe in para 255 as under:
“The intention of RERA is to bring the complaints of allottees before one Authority and simplify the process. If the interpretation suggested by the petitioners, namely, that the provision is applicable only after coming into force RERA is accepted, this would result in allottees having to approach different fora for interest prior to RERA and subsequent to RERA. In fact, Section 71 of RERA provides that the cases pending before the Consumer Court can be transferred to Authority. Reference to pending cases is obviously a reference to claims for interest and or compensation pending when the RERA came into force.”
11. Further Section 4 of the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 amended vide U.P. Act No. 30 of 2016, lays down duties and liabilities of promoter. The relevant portion of Section 4 is being reproduced herein as follows:—
“4. General liabilities of promoter:— (1) Any promoter who intends to sell an apartment, shall make a full and true disclosure in writing of following to an intending purchaser and the Competent Authority:
(a) rights and his title to the land and the building in which the apartments have been or proposed to be constructed;
(b) all encumbrances, if any, on such land or building, and any right, title, interest or claim of any person in or, over such land or building;
(c) the plans and specifications approved by or submitted for approval to the local authority of the entire building of which such apartment forms part;
(d) detail of all common areas and facilities as per the approved layout plan or building plan;
(e) the nature of fixtures, fittings, and amenities, which have been or proposed to be provided;
(f) the details of the design and specifications of works or and standards of the material which have been or are proposed to be used in the construction of the building, together with the details of all structural, architectural drawings, layout plans, no objection certificate from Fire Department, external and internal services plan of electricity, sewage, drainage and water supply system etc. to be made available with the Association;
(4) After plans, specifications and other particulars specified in this section as sanctioned by the prescribed sanctioning authority are disclosed to the intending purchaser and a written agreement of sale is entered into and registered with the office of concerned registering authority. The promoter may make such minor additions or alterations as may be required by the owner or owners, or such minor changes or alterations as may be necessary due to architectural and structural reasons duly recommended and verified by authorized Architect or Engineer after proper declaration and intimation to the purchaser:
Provided that the promoter shall not make any alterations in the plans, specifications and other particulars without the previous consent of the intending purchaser, project Architect, project Engineer and obtaining the required permission of the prescribed sanctioning authority,
Provided further that after completion fully or partially of a project or of a particular phase of a project, the promoter shall not make any alterations in any building or common area and facilities in respect of which completion certificate has been issued.
(5) An apartment may be transferred by the promoter to any person only after obtaining the completion certificate from the prescribed sanctioning authority concerned as per building byelaws. The completion certificate shall be obtained by promoter from prescribed authority within the period of two years from the date of sale agreement. Provided that if the construction work is not completed within the stipulated period, with the permission of the prescribed authority;
Provided further that if the completion certificate is not issued by the prescribed sanctioning authority within three months of submission of the application by the promoter complete with all certificates and other documents required, the same shall be deemed to have been issued after the expiry of three months.
Explanation: For the purposes of this subsection “completion” means the completion of the construction works of a building as a whole or the completion of an independent block of such building, as the case may be.
(6) After obtaining the completion certificate as provided in subsection (5) and handing over physical possession of the apartments to the allottees, it shall be the responsibility of the promoter to hand over the possession of the common areas and facilities and also the originals of the plans and documents to the Association of apartment owners formed and registered under subsection (2) of section 14.
Provided that handing over of physical possession of the common areas and facilities under this subsection shall be completed within a period of one year from the date of issue of completion certificate or the date by which seventy five percent of the apartments have been handed over to the allottees, whichever is earlier, subject to the condition that the promoter shall be responsible for the sale and transfer of the balance apartments.
(7) The promoter shall maintain the common areas and facilities till the Association is formed in accordance with the conditions laid down in sub section (2) of section 14 and shall be entitled to levy proportionate maintenance charges as specified in the declaration.
(8) The promoter shall be responsible upto two years after handing over the apartments regarding construction and structural defects in the building constructed by him and he shall get such defects removed at his own cost, failing which he shall liable to pay compensation for the losses incurred by him for such defects.
(9) The promoter shall pay all local taxes including house tax, water tax, sewer tax, until and unless subleases have been executed in favour of the apartment owners.”
11.1 The provisions of the U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 are applicable to all the promoters of the State and Section 4 prescribes duties, liabilities of promoters and on examination, we find that provisions of Section 4 of the U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 as amended vide Act No. 30 of 2016 are akin to the provisions of Section 14 of the Act of 2016 and appellant is required to comply the said provision, in letter and spirit.
11.2 On the basis of the aforesaid analysis, the issue no. (i), (ii) & (iii) are answered against the appellant.
12. Now we proceed to examine issue no. (iv), regarding formation of Resident Welfare Association of the project in question by the appellant.
12.1 The Chapter VI of the U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 lays down modalities of formation of Association of apartment owners and bye-laws for the registration of the affairs of such Association. Section 14(1) provides that there shall be an Association of Apartment Owners for the administration of the affairs in relation to the apartments and the property appertaining thereto and for the management of common areas and facilities. The relevant portion of Section 14 for examining the present issue is being reproduced as under:
(2) It shall be the joint responsibility of the promoter and the apartment owners to form an Association. The promoter shall get the Association registered when such number of apartments have been handed over to the owners which is necessary to form an association or sixty percent of apartments, whichever is more, by way of sale, transfer or possession, provided the building has been completed along with all infrastructure services and completion certificate obtained from the local authority.
Provided that in case of an independent area or an independent commercial area the promoter may form a separate Association for its management, if required.
(5) On formation of the Association of the Apartment Owners under subsection (2) above, the management of the affairs of the apartments regarding their common areas and facilities shall be deemed to be transferred from the promoter to the Association which shall thereupon maintain them.
Provided that till all the apartments are sold or transferred, the promoter shall proportionately share the maintenance cost of common areas and facilities.
12.2 On examination of the provisions of Section 14 of U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010, it is crystal clear that responsibility to form an Association of the Apartment Owners and get it registered is that of the promoter and all amount collected by the promoter towards interest free maintenance security is also required to be transferred to the Association at the time of handing over common area and facilities.
12.3 In the present case, it appears that Association has been formed by the Apartment Owners on their own and certain amount has also been transferred by the appellant to the said Association and, therefore, in order to make compliance of the provisions of Section 14(2) of the U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010, the appellant is required to take all necessary steps and get it rectified at the appropriate level. We do not find any illegality or infirmity in direction no. 2 of the order of Regulatory Authority. Accordingly, issue no. (iv) is answered against the appellant.
13. The issue no. 5 is relating to deficiency or shortcomings in the amenities, features and services mentioned in the Brochure of the promoter/appellant and whether the same are required to be completed by the promoter/appellant. We deem it proper to cull out the amenities, features and services mentioned in the Brochure of Greenwood Apartments of appellant for examining the issue, the same are as under:
• A large will landscaped open area to ensure a healthy and peaceful living.
• Adequate parking facilities.
• High-level central security for the safety of the residents.
• A dedicated play area for children.
• A club with ultra modern facilities for a vibrant recreational quotient.
• 24 × 7 Power backup.
• Good quality elevators in every block
• Earthquake resistant structure
• An excellent system of fire fighting equipments in place
• Construction by trust worthy ISO Construction Company.
• Shops for day to day shopping
• Third Party quality surveillance by reputed organization.
• Facility to check the quality of construction by allottees themselves at site.
13.1 The features, amenities and services advertised by the appellant through its brochure, attracted the respondent and other home buyers and they have invested their hard earned money to buy homes of their dreams and the appellant is required to fulfill the promised amenities etc. The Hon'ble Supreme Court in the recent case of Wg. Cdr. Arifur Rahman Khan and Aleya Sultana v. DLF Southern Homes Pvt. Ltd. while examining the issue of non-fulfilling the promise and providing features, amenities and services as mentioned in the brochure, in para -43 was pleased to observe as follow:—
“43. In other words, what the developer holds out as a defence is that though there has been a failure on their part to provide the amenities, the flat buyers have the benefit of facilities in the surrounding area which has become urbanised. We cannot agree with this line of submissions. The reply of the developer seeks to explain the failure to construct the facilities on the ground that the “existing population cannot sustain these facilities” - a school, commercial complex and health care facilities. This is a case involving an experienced developer who knew the nature of the representation which was being held out to the flat purchasers. Developers sell dreams to home buyers. Implicit in their representations is that the facilities which will be developed by the developer will provide convenience of living and a certain lifestyle based on the existence of those amenities. Having sold the flats, the developer may find it economically unviable to provide the amenities. The flat purchasers cannot be left in the lurch or, as in the present case, be told that the absence of facilities which were to be provided by the developer is compensated by other amenities which are available in the area. The developer must be held accountable to its representation. A flat purchaser who invests in a flat does so on an assessment of its potential. The amenities which the builder has committed to provide impinge on the quality of life for the families of purchasers and the potential for appreciation in the value of the flat. The representation held out by the developer cannot be dismissed as chaff. True, in a situation such as the present it may be difficult for the court to quantify the exact nature of the compensation that should be provided to the flat buyers. The general appreciation in land values results in an increase in the value of the investment made by the buyers. Difficulties in determining the measure of compensation cannot however dilute the liability to pay. A developer who has breached a clear representation which has been made to the buyers of the amenities which will be provided to them should be held accountable to the process of law. To allow the developer to escape their obligation would put a premium on false assurances and representations made to the flat purchasers. Hence, in factoring in the compensation which should be provided to the flat buyers who are concerned in the present batch of appeals, we would necessarily have to bear this issue in mind.”
13.2 In view of the aforesaid analysis, we are of the view that the amenities, facilities and services advertised by the appellant in its Brochure are required to be fulfilled and provided to the allottees of the project. Accordingly, the question no. (v) is answered in favour of the respondent.
14. In view of the preceding observations and after examining the material on record as well as averments made by the learned counsel for the appellant and the respondent in person, we do not find any force in the submissions of learned counsel for the appellant. We also do not find any illegality, infirmity and perversity in the impugned order dated 03.06.2019 passed by the Regulatory Authority in Complaint no. 12201826991 (Uma Shankar Dubey v. Lucknow Development Authority). Accordingly, the appeal is dismissed.
No order on costs.