1. The present appeal has been preferred by the Uttar Pradesh State Industrial Development Corporation Ltd. (now Uttar Pradesh State Industrial Development Authority) and Senior Project Officer, Trans Ganga City, U.P. SIDC, Unnao (hereinafter referred to as ‘the appellants/Promoters’) under Section 44(1) of the Real Estate (Regulation and Development Act, 2016 (hereinafter referred to as ‘the Act, 2016) against the order dated 23.12.2019 passed by the U.P. Real Estate Regulatory Authority, Lucknow (hereinafter referred to as “the Regulatory Authority”) in Complaint No. LKO186/09/1471/2019, whereby the appellants/Promoters were directed to deliver possession of the plot within 90 days from the date of the order, after obtaining stamp fee from the complainant/respondent and get the Registry executed. The appellants/Promoters were further directed to ensure payment of delay interest to the respondent for the period from December, 2016 till the date of actual possession at the normal rate of MCLR+1%. A copy of the order was also directed to be sent to the Secretary, Regulatory Authority for taking action against the appellant for violation of Sections 3, 4 and 15 of the Act, 2016.
2. The facts of the case, in brief, are that the appellant/Promoter is a company incorporated and registered under the Companies Act, 1956 and wholly owned by the State of Uttar Pradesh, and as such it is a State undertaking.
2.1 The appellant got the land acquired through State of Uttar Pradesh for developing industrial area, allot land to entrepreneurs and receive premium and lease rent etc., in installments from such entrepreneurs.
2.2 Trans Ganga City Project is one of the projects being run by the appellant and is also notified under Section 2(d) of UPSIDA, 1976 as “Industrial Development Area” and the same is notified by the State Government vide notification dated 06.01.2018. The residential and commercial plots are allotted to the industrialists and others in furtherance to the achievement of industrial growth and development of the area.
2.3 The respondent had applied for the residential plot and he had been allotted a residential plot bearing No. C-298, Sector-3, measuring approximately 120 sq. meters in the industrial area, Trans Ganga (Housing), District Unnao, through lottery system, vide allotment letter dated 10.05.2016.
2.4 The allotment letter provided that the land of the plot is allotted on lease basis for a period of 90 years on lease rent. Conditions restraining sale of the plot/house including restraining mortgage, assignment without the prior permission of the appellant was specifically mentioned.
2.5 The respondent filed Complaint No. LKO186/09/1471/2019 before the Regulatory Authority on 15.09.2019 alleging that he had booked Plot No. C-298, Sector-3 in Trans Ganga (Housing) Project of the appellant and had paid a sum of Rs. 21,71,180/- to the appellant. As per Booklet of the Project the possession of the plot was to be delivered to the respondent by December, 2016 but till date neither the possession of the plot been handed over to the appellant nor the area been developed.
2.6 The appellant filed its reply to the complaint stating therein that the provisions of the Act, 2016 are not applicable to allotment on lease and in the present case there was a provision of lease for 90 years and the lease rent is payable for the said period. It was further stated that the appellant does not fall within the definition of ‘Promoter’ under Section 2(zk) of the Act, 2016 as there was ‘no sale’ by the appellant. The development work of Trans Ganga Project was going with full swing, but due to agitation and hindrance created by the previous land owners as well as by the so called land leaders, the development work of the project at the site is suspended since October, 2017. Keeping in view the imbroglio with the ex-land owners, the Corporation on 03.09.2019, decided to offer the refund of entire deposits along with interest @ 6% from the date of deposit, subject to the acceptance by the respective allottees. It is further submitted that in response to the said offer, about 400 allottees have applied for refund by way of surrendering their respective plots and rest of them agreed to continue to remain with the project.
3. The Regulatory Authority decided the complaint filed by the respondent through order dated 23.12.2019 with the directions as mentioned in para 1 above.
4. Although the appellant has mentioned various grounds in the memo of appeal for challenging the impugned order dated 23.12.2019 passed by the Regulatory Authority, but during the arguments the learned counsel for the appellant pressed only two grounds i.e. ground ‘s’ and ‘t’. The grounds ‘s’ and ‘t’ are as under:—
“s. Because while deciding the complaint filed by the respondent/complainant, the learned U.P. Real Estate Regulatory Authority, Lucknow failed to consider that due to the agitation and hindrance created by the previous landowners as well as by the so called land leaders, the development project at the site remain suspended since October, 2017. Although the payment of compensation had already been made to the farmers, so affected by the acquisition of the land for the project, in pursuance to the order issued by the State Government. Further the agitation of the farmers was an unwanted and critical problem and efforts were continuously made to resolve the same.
t. Because while deciding the complaint filed by the respondent/complainant, the learned U.P. Real Estate Regulatory Authority, Lucknow, directed the appellant to hand over the possession within a period of 90 days from the date of the order, after receiving the stamp fee from the complainant/respondent as per the rules and getting the same registered besides awarding the interest which is highly excessive and has been passed without appreciating the matter in its true perspective, in accordance with law, is bound to cause pecuniary loss to the appellants and as such the same is liable to be set aside.”
5. The respondent filed objections to the appeal and submitted that:
(a) The Real Estate (Regulation and Development) Act, 2016, Rules, 2016 and Real Estate (Regulation and Development) (Agreement for Sales and Lease) Rules, 2018, are enforced in all sectors of real estate either falling under Government projects or non-government projects.
(b) Withdrawal of 400 allottees from the scheme is partially true. These allottees left because of unkept promises of the appellant and poor development work over these years. Prior to intervention of the Regulatory Authority the amount deposited by the allottees was being returned after making deduction. It is only after various complaints sent to the Regulatory Authority, the appellant sent a proposal to the allottees for refund of their deposited amount with 6% interest, if they surrender their plots.
(c) The said Project which was to be completed and handed over to the allottees in December, 2016, is yet only partially completed and it is not true that the development work is going on since 18.11.2019.
(d) After considering all the legal aspects, the Regulatory Authority rejected all the false proclamations submitted by the appellant and passed a judgment in favour of the respondent.
(e) The respondent, when after waiting for a long period, did not get possession of the allotted plot and did not see any development, sent complaint to the Regulatory Authority for payment of interest and compensation under the Real Estate (Regulation and Development) (Agreement for Sales and Lease) Rules, 2018. Upon sending of the complaint, vide letter of the Regulatory Authority dated 20.12.2018, instructions were given to the respondent to file online complaint.
(f) After expiry of deadline for delivery of possession of the allotted plot within 3 years, the appellants offered the respondent either to continue with the allotted plot or to given consent to take refund of the deposited amount.
(g) The payment for the allotted plot was made by the respondent after taking loan from State Bank of India. The compensatory interest rate offered by the appellants was much lower than the interest rate of bank loan.
(h) Out of 157 projects operated by the appellants 22 projects are residential projects, even then the UPSIDC is not registered with RERA whereas Section 3 of the Act, 2016 makes it mandatory for all real estate companies to register with RERA and failure to abide by the Act, 2016 is punishable under Section 59(i) of the Act, 2016.
(i) It is false to state that the Project is an industrial project. The fact is that when the scheme was floated to the public it was nowhere mentioned that this scheme is kept only for entrepreneurs. On the contrary, applications were invited for purchase of plots from every one, both industrial and residential.
(j) In Unnao the land was acquired in 2005 for industrial development. Even after 15 years the area is waiting for industrial development.
(k) Under Chapter IV-Rights and Duties of the allottees, as per Section 19(7) of the Act, 2016, interest for delay is being charged at the rate of 14% for delay period while Rule 9.3 (i) of Uttar Pradesh Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules provides for maximum interest at the simple rate of MCLR+1% as determined by the State Bank of India.
(l) In the same way Section 19(4) of Chapter IV-Rights and Duties of the Promoter, provides that if promoter fails to provide possession with promised developments it has to compensate the allottee by paying interest for delay. But in this case the promoter is constantly trying to avoid the obligations imposed on it for payment of relief/interest which is totally unfair and against the law and rule. Due to this, the allottee has to bear triple damage. Firstly, he is paying interest on the loan obtained from the Bank, secondly paying rent and thirdly facing the unexpected increase of construction cost.
(m) In the said circumstances the appeal is totally unfair, against law and natural justice as well as not acceptable.
6. The appellants have not filed any reply to the objections of the respondent to the memo of appeal.
7. Heard Sri Ajai Kumar Singh, learned counsel for the appellant and Sri Anil Kumar Bajpai, the respondent in person.
8. The appeal was filed with following three prayers:—
(i) To set aside the impugned order dated 23.12.2019, passed in complaint no. LKO186/09/1471/2019 (Anil Kumar Bajpai v. UPSIDC).
(ii) To hold that the Trans Ganga Project is not a “Real Estate Project” in terms of the RERA Act, 2016, as defined under Section 2 (zn) of the Act and also that the appellant is not a “Promoter” as defined in Section 2 (zk) of the Act, 2016.
(iii) To grant any other relief, which this Hon'ble Tribunal deem to be fit and proper in the circumstances of the case.
9. The appellants, during the course of the proceedings moved application No. 2030/2020 for seeking deletion of prayer no. (ii) in the memo of appeal and after due consideration the said application was allowed vide order dated 08.02.2021 and the learned counsel for the appellants was permitted to delete prayer no. (ii) in the memo of appeal.
10. Learned counsel for the appellants while making final submissions submitted that though various grounds have been raised for challenging the order of the Regulatory Authority, but he confines his prayer and presses only two grounds i.e. grounds “s” and “t”. A perusal of the grounds pressed by the appellant reveals that now challenge to the order of the Regulatory Authority remains confined regarding agitation and hindrance created by previous land owners which resulted in suspension of the work since October, 2017 and the direction of the Regulatory Authority for handing over the possession within 90 days from the date of the order besides awarding the interest which is highly excessive and has been passed without appreciating the matter in its true perspective in accordance with law and the same is bound to cause pecuniary loss to the appellant and as such the same is liable to be set aside.
11. On the complaint of the respondent the Regulatory Authority framed following two questions:—
(i) Whether the project of the promoter is required to be registered with RERA or not?
(ii) Whether it will be appropriate to direct the promoter to provide possession with interest or not?
12. The Regulatory Authority while examining the question no. (i), after examining various provisions of the Act, 2016 directed for taking action against the promoter for violation of the provisions of Sections 3, 4 and 15 of the Act, 2016, and after examining the judgment of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India, 2017 SCC OnLine Bom 9302 and the provisions of Section 18(1)(b) of the Act, 2016 directed the promoter to provide possession within 90 days after taking necessary stamp fee and execution of the conveyance deed and also pay interest at the rate of MCLR+1% from December, 2016 till actual date of possession.
13. In order to appreciate the controversy on the grounds pressed by the learned counsel for the appellants, pleadings on record and appreciating the submissions of the learned counsel for the appellants and the respondent who appeared in person, we deem it proper to frame the following questions:—
(1) Whether the provisions of Act, 2016 are applicable to the project of the appellant and Regulatory Authority is vested with the powers and jurisdiction to consider and decide the complaint of the respondent under the scheme of the Act, 2016 on account of violation of the provisions of Sections 12, 14, 18 and 19 of the Act, 2016?
(2) Whether under the scheme of Act, 2016 and Rules, 2016 any mechanism has been provided for determination of the interest or compensation for delay in handing over possession of the apartment/plot to the allottee and/or refund with interest, if allottee does not want to continue/wish to withdraw from the project?
(3) Whether the respondent is entitled for interest due to delay in possession of the allotted unit/plot and/or while seeking refund on the deposited amount under the scheme of Act, 2016 and if yes, what rate of interest is required to be paid by the promoter/appellant to the allottee/respondent?
(4) Whether the Regulatory Authority erred in not taking into consideration the difficulties faced by the appellants in completion of the project as per promised time schedule or the order of the Regulatory Authority is in consonance with the provisions of Act, 2016 and Rules, 2016?
14. For examining question no. 1, we proceed to examine the scheme and relevant provisions of the Act of 2016.
13.1 The Real Estate (Regulation & Development) Act, 2016 has been enacted 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. The Real Estate (Regulation & Development) Act, 2016 delineates functions and duties of promoter in chapter 3 and rights and duties of allottees in chapter 4. The Real Estate Regulatory Authority has been assigned functions and have been given powers as detailed out in chapter 5.
13.2 At this stage it is necessary to examine the definition of ‘allottee’ under the provisions of the Act, 2016. Section 2 (d) of the Act reads as under:—
2(d) “allottee” in relation to a real estate project, means the person to whom a plot, apartment or building, as the case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise, but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent.”
13.3 The Hon'ble Bombay High Court in the case of Lavasa Corporation Limited v. Jitendra Jagdish Tulsiani, 2018 SCC OnLine Bom 2074 : (2018) 5 AIR Bom R 553 : (2018) 6 Bom CR 172 examined the status of an “allottee” on the basis of long term leasehold after taking into consideration the judgment of Hon'ble Supreme Court in the case of R.K. Palshikar (HUF) v. CIT, MP Nagpur and Bhandara, (1988) 172 ITR 311, was pleased to observe that the definition of the word “Allottee” as given in Section 2(d) of the RERA, to contend that the allottee does not include a person to whom such plot, apartment or building, as the case may be, is “given on rent”, it must be remembered that, the definition of the term “allottee” in the present context includes even when the plot sold is a “freehold or leasehold”. To that extent, it has to be held that, the definition of ‘allottee’ also includes the ‘Lease Agreement’, though it may not include such agreement when the apartment in its real sense given purely on rent and it is, in reality an ‘Agreement of Rent and Lease’ and not in effect a transaction of sale. The object of RERA is to regulate the real estate industry, to ensure greater accountability towards consumers and significantly to reduce frauds and delays, to bring into it the standardization, professionalism and the transparency, so that interests of the consumers are protected. Hence, they are required to be called as ‘Consumers’ or ‘Allottees’. It is further observed that if they are excluded from the definition of ‘Allottee’ and thereby from the protection given under the Act, by giving restrictive meaning to the term ‘Allottee’, the very object of the Act would stand frustrated.
13.4 The Act envisages adjudication by the Regulatory Authority in terms of the powers under Chapter V of the Act and in particular Sections 31, 32, 34, 35 and 40 of the Act, and for adjudging compensation by the Adjudicating Officer in terms of the power under Chapter VIII of the Act and in particular Sections 71 and 72 thereof.
13.5 The Act spells out the obligations of the promoter of a real estate project and the consequence of the promoter failing to fulfill those obligations. Some of those obligations are enumerated in Section 11, 12 to 18 of the Act.
13.6 Section 18 of the Act talks of the consequence of the failure by the promoter to complete or to be unable to give possession of an apartment, plot or building either in terms of the agreement for sale or failure to complete the project by the date specified therein or on account of discontinuance of his business either on account of suspension or revocation of the registration under the Act or for any other reason. In the event of either of the above contingencies under Section 18(1)(a) of the Act, the promoter is made liable on the demand of the allottee:
(i) In the event that the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by the promoter in respect of that apartment, plot, building, as the case may be, together with “interest at such rate as may be prescribed” “including compensation in the manner as provided under this Act”;
(ii) Where an allottee does not intend to withdraw from the project the promoter shall pay him for every month's delay in the handing over of the possession, “interest at such rate as may be prescribed”.
Section 18(2) of the Act mandates that in case loss is caused to allottee due to the defective title of the land, on which the project is being developed or has been developed, the promoter shall compensate the allottee and that such claim for compensation under Section 18(2) shall not be barred by limitation provided under any law for the time being in force.
Section 18(3) of the Act states that where the promoter fails to discharge any other obligations under the Act or the Rules or Regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, the promoter shall be liable to pay “such compensation” to the allottees, in the manner as provided under the Act.
13.7 It is apparent on a reading of Section 18 of the Act as a whole that upon the contingencies spelt out therein, (i) the allottee can either seek refund of the amount by withdrawing from the project; (ii) such refund could be together with interest as may be prescribed; (iii) the above amounts would be independent of the compensation payable to an allottee either in terms of Sections 18 (2) or 18 (3) of the Act read with other provisions; (iv) the allottee who does not intend to withdraw from the project will be required to be paid by the promoter interest for every month's delay of handing over possession.
13.8 When one turns to the powers of the Authority, it is seen that under Section 31, the complaints can be filed either with the Authority or with the Adjudicating Officer (AO) for violation or contravention of the provisions of the Act or the Rules and Regulations. Such complaint can be filed against “any promoter, allottee or real estate agent”, as the case may be. Such complaint can be filed by “any aggrieved person”. The Explanation to Section 31(1) of the Act states that for the purposes of said sub-section “person” shall include an association of allottees or any voluntary consumer association registered under any law for the time being in force. Section 31(2) states that the form, manner and fees for filing a complaint under sub-section (1) shall be such as may be prescribed.
13.9 Now we proceed to examine the definition of the term “Project”, “Real Estate Project” and provisions of registration of Real Estate Project with Real Estate Regulatory Authority.
The definition of the project provided in section 2(zj) reads as under:—
“project” means real estate project as defined in clause 2(zn) under this Act.”
Accordingly, project means real estate project as defined in clause 2(zn), which reads as follows:—
“'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 some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto.”
13.10 Chapter II 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 respective Real Estate Regulatory Authority.
The proviso to section 3(1) further provides for registration of ongoing Project:
“……… 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 fulfil 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 Sections 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 (i.e. within 3 months from 01.05.2017) 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.
13.11 Section 3(2) provides those categories of projects where no registration of real estate projects shall be required. The section 3(2) reads as follows:—
“Notwithstanding anything contained in sub-section (1), no registration of the real estate project shall be required-
a) where the area of land 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 redevelopment 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.
13.12 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. 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”.
13.13 The provisions of the Act will therefore apply to the project in question as the project was not completed and the Completion Certificate (C.C.) was not issued till the relevant date and therefore the project falls under the category of ongoing projects.
13.14 For the sake of argument, even if we assume that the Act applies only to those projects where the agreement was signed after 01.05.2017, then where will the buyer go for seeking relief if they have entered into an agreement prior to 01.05.2017 and the possession of their units/flats/plots has not been given even after 01.05.2017. The Act of 2016 has been promulgated primarily in order to protect the interests of the consumers (buyers), since the Consumer Protection Act, 1986 was not adequate to address all the concerns of the buyers and promoter in the Real Estate Sector. Applying the provisions of the Act to only those projects where agreement has been signed after 01.05.2017 and not applying them to the projects where the agreement was signed prior to 01.05.2017 is quite illogical, and if accepted, will fail the very objective for which the Act was promulgated.
13.15 The legislature not only has power to legislate retrospectively but even to modify pre-existing contracts between the parties in the larger public interest. There is nothing unreasonable or arbitrary in making the provisions of the Act applicable to all ongoing projects including the present case as the project in question falls within the category of ongoing projects as defined under Section 3 of the Act. We are of the considered view that the jurisdiction of the Regulatory Authority and the Adjudication Officer applies even to the projects where some kind of written understanding has been reached between the parties, even prior to coming into force of the Act, as the Act is retroactive in nature. Therefore, the argument of the appellant/promoter that the project in question does not fall within the jurisdiction of the Regulatory Authority is not tenable, and legally not valid.
13.16 Thus, we are of the considered view that a complaint pertaining to violation of provisions of the Act, 2016, the Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016 (hereinafter referred to as Rules, 2016) and regulations made thereunder 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(zn) of the Real Estate (Regulation and Development) Act, 2016. Further, for the project in question Regulatory Authority is vested with the powers & jurisdiction to consider and decide the complaint of respondent under the Scheme of Act, 2016, Rules, 2016 and Regulations framed there under. Question no. (1) is answered accordingly.
15. Question No. (2) is regarding, whether under the scheme of the Act, 2016 and Rules, 2016 any mechanism has been provided for determination of the interest or compensation for the delay in handing over possession and/or refund with interest if allottee chooses to withdraw from the Project.
14.1 The Act envisages adjudication by the Regulatory Authority in terms of the powers under Chapter V of the Act and in particular Sections 31, 32, 34, 35 and 40 of the Act, and for adjudging compensation by the Adjudicating Officer in terms of the power under Chapter VIII of the Act and in particular Sections 71 and 72 thereof.
14.2 The Act spells out the obligations of the promoter of a real estate project and the consequence of the promoter failing to fulfill those obligations. Some of those obligations are enumerated in Section 11, 12 to 18 of the Act.
14.3 Section 18 of the Act talks of the consequence of the failure by the promoter to complete or to be unable to give possession of an apartment, plot or building either in terms of the agreement for sale or failure to complete the project by the date specified therein or on account of discontinuance of his business either on account of suspension or revocation of the registration under the Act or for any other reason. In the event of either of the above contingencies under Section 18(1)(a) of the Act, the promoter is made liable on the demand of the allottee:
(i) In the event that the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by the promoter in respect of that apartment, plot, building, as the case may be, together with “interest at such rate as may be prescribed”, “including compensation in the manner as provided under this Act”;
(ii) Where an allottee does not intend to withdraw from the project, the promoter shall pay him for every month's delay in the handing over of the possession “interest at such rate as may be prescribed”. Section 18(2) of the Act mandates that in case loss is caused to allottee due to the defective title of the land, on which the project is being developed or has been developed, the promoter shall compensate the allottee and that such claim for compensation under Section 18(2) shall not be barred by limitation provided under any law for the time being in force.
14.4 Section 18(3) of the Act states that where the promoter fails to discharge any other obligations under the Act or the Rules or Regulations made there under or in accordance with the terms and conditions of the agreement for sale, the promoter shall be liable to pay “such compensation” to the allottees, in the manner as provided under the Act.
14.5 It is apparent on a reading of Section 18 of the Act as a whole that upon the contingencies spelt out therein, (i) the allottee can either seek refund of the amount by withdrawing from the project; (ii) such refund could be together with interest as may be prescribed; (iii) the above amounts would be independent of the compensation payable to an allottee either in terms of Sections 18 (2) or 18 (3) of the Act read with other provisions; (iv) the allottee who does not intend to withdraw from the project will be required to be paid by the promoter interest for every month's delay of handing over possession.
14.6 When one turns to the powers of the Authority, it is seen that under Section 31, the complaints can be filed either with the Authority or with the Adjudicating Officer (AO) for violation or contravention of the provisions of the Act or the Rules and Regulations. Such complaint can be filed against “any promoter, allottee or real estate agent”, as the case may be. Such complaint can be filed by “any aggrieved person”. The Explanation to Section 31(1) of the Act states that for the purposes of said sub-section “person” shall include an association of allottees or any voluntary consumer association registered under any law for the time being in force. Section 31(2) states that the form, manner and fees for filing a complaint under sub-section (1) shall be such as may be prescribed.
14.7 Having gone through the relevant Sections of the Act, we find that as per Sections 12, 18 and 19 of the Act, the allottee, in case of default by the promoter, is entitled to refund of his/her entire investment along with “interest at such rate as may be prescribed” and “compensation in the manner provided under the Act”. Whereas in Section 12, the part dealing with interest and the part dealing with compensation are joined with the word “and” while in Section “18” they are joined with the word “including”. Also, “at such rate as may be prescribed” is suffixed to the word “interest” in the context of refund of investment, but the expression “at such rate as may be prescribed” is neither prefixed nor suffixed to the word “compensation” in any of the Sections of the Act. The term compensation is suffixed by the expression “in the manner as provided under this Act” in Sections 12, 14, 18 & 19 of the Act. However, compensation and interest are qualified by the term “as he thinks fit in accordance with the provisions of any of those sections” in Section 71 of the Act. The Act only lays down for “holding an enquiry in the prescribed manner, after giving any person concerned a reasonable opportunity of being heard” under Section 71. The Act very clearly provides that the quantum of compensation or “interest as he thinks fit” under Section 71 will be decided taking into consideration the factors listed under Section 72 of the Act.
14.8 We further examined Section 31 of the Act and Rule 33 & Rule 34 of the Rules. The relevant portions of Section 31 of the Act and Rule 33 of the Rules are extracted as follows:—
Extract of Section 31 of the Act
“(1) Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter, allottee or real estate agent, as the case may be.
Explanation
For the purpose of this sub-section “person” shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.
(2 The form, manner and fees for filing complaint under sub-section (1) shall be such as may be specified by regulations.”
As can be seen from above, Section 31(2) of the Act provides for specifying by regulations, the form, manner and fee for filing complaint under Section 31(1) of the Act. As provided under Section 31(2) of the Act, the U.P. Government has framed Rules, 2016. Rule 33(1) provides for manner of filing a complaint with the Regulatory Authority. Rule 33(1) is extracted as follows:—
Extract of Rule 33(1) of Rules-(1) Any aggrieved person may file a complaint with the regulatory authority for any violation under the Act or the rules and regulations, made there under, save as those provided to be adjudicated by the adjudicating officer, in Form M which shall be accompanied by a fee of rupees one thousand in the form of a demand draft drawn on a nationalized bank, in favour of regulatory authority and payable at the main branch of that bank at the station, where the seat of the said regulatory authority is situated.
It is evident from Rule 33(1) of the Rules that the complaints filed with the Regulatory Authority should be in Form M, except those complaints which require to be adjudicated by the Adjudicating Officer. On top of Form M, it is clearly written that it is as per provisions of Rule 33(1) and is meant for filing complaint under Section 31 of the Act. Further Column 5 of the Form M specifically requires a complainant to indicate the relief(s) sought.
14.9 We have further examined Rule 34(1) of the Rules which relate to filing of a complaint with the Adjudicating Officer for compensation. Rule 34(1) reads as follows:—
Extract of Rule 34(1)
(1) Any aggrieved person may file a complaint with the adjudicating officer for compensation under Section 12, 14, 18 and 19 in Form N, which shall be accompanied by a fee of rupees one thousand in the form of a demand draft drawn on a nationalized bank in favour of regulatory authority and payable at the main branch of that bank at the station, where the seat of the said regulatory authority is situated.
14.10 It is clear from Rule 34 (1) of the Rules that a complaint for “compensation” under Sections 12, 14, 18 and 19 of the Act is to be filed before the Adjudicating Officer in Form N. It is mentioned on top of Form N itself that it is an application to Adjudicating Officer for claim of compensation under Rule 34(1) of the Rules and under Section 31 of the Act read with Section 71 of the Act. A complainant is required to indicate in Column 5 of Form N, the compensation sought.
14.11 Thus, it is our considered view that Form N is to be filed before an “Adjudicating Officer” for only claiming “compensation” under Rule 34(1); whereas Form M is to be filed before the Regulatory Authority under Rule 33(1) of the Rules for all types of reliefs, barring “compensation”, for any violation under the Act, Rules or Regulations.
14.12 We have also examined the provisions of Sections 71 and 72 of the Act. The opening words of Section 71(1) of the Act make it clear that the scope and functions of the Adjudicating Officer (AO) are only for ‘adjudging compensation under Sections 12, 14, 18 and 19 of the Act’. If the legislative intent was to expand the scope of the powers of the AO, then the wording of Section 71(1) ought to have been different. On the contrary, even the opening words of Section 71(2) of the Act make it clear that an application before the AO is only for ‘adjudging compensation’. Even in Section 71(3) of the Act, it is reiterated that the AO may direct ‘to pay such compensation or interest as the case may be, as he thinks fit’ in accordance with provisions of Sections 12, 14, 18 and 19 of the Act. This has to be seen together with the opening words of Section 72 of the Act, which read “while adjudging the quantum of compensation or interest, as the case may be, under Section 71, the adjudicating officer shall have due regard to the following factors, namely,…………….”
On a collective reading of Sections 71 and 72 of the Act, the legislative intent becomes explicit. This is to limit the scope of the adjudicatory powers of the AO for determining “compensation or interest as he thinks fit” in the event of violation of Sections 12, 14, 18 and 19 of the Act.
14.13 On examination of Section 35 of the Act, we find that the powers of the Regularity Authority under Section 35 of the Act are of a wide nature. While discharging those functions, it will be open to the Authority to even require the AO to conduct the inquiry. Section 35(2) of the Act also makes it plain that the Regulatory Authority will have the same powers as a Civil Court. The legislative intent is, therefore, not to diminish the adjudicatory functions of the Regulatory Authority, but rather to provide it with all the trappings of a quasi-judicial/judicial authority while inquiring into the complaints and issuing directions, by directing the Adjudicating Officer to adjudicate the compensation or interest. The legislation in its own wisdom has used the word “Authority” as well as “Adjudicating Officer” wherever it is required. Furthermore, the legislation has clearly, intentionally and suitably used the word “penalty” or “interest at such rate as may be prescribed” in case of Authority and “compensation” or “interest as he thinks fit” in case of Adjudicating Officer.
14.14 Further, the Hon'ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India (supra) observed as follows:—
“Section 18(1)(b) lays down that if the promoter fails to complete or is unable to give possession of an apartment due to discontinuance of his business as a developer on account of suspension or revocation of the registration under the Act or for any other reason, he is liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice in this behalf including compensation. If the allottee does not intend to withdraw from the project he shall be paid by the promoter interest for every month's delay till handing over of the possession. The requirement to pay interest is not a penalty as the payment of interest is compensatory in nature in the light of the delay suffered by the allottee who has paid for his apartment but has not received possession of it. The obligation imposed on the promoter to pay interest till such time as the apartment is handed over to him is not unreasonable. The interest is merely compensation for use of money”.
14.15 From the aforementioned discussion, it is clear that the Act of 2016 provides a mechanism for determination of interest and/or compensation for the delay in handing over possession of the unit to the allottee, if the allottee wishes to stay with the project and/or refund with interest if allottee wants to withdraw from the Project. Question no. (2) is answered accordingly.
16. Question No. (3) is regarding respondent's entitlement for interest due to delay while seeking refund of the deposited amount under the scheme of the Act, 2016 and if yes, what rate of interest is required to be paid by the promoter to the allottee/respondent.
15.1 Section 18(1) of the Act clearly provides that if an Allottee wishes to withdraw from the Project on the ground that the Promoter is unable to give possession in accordance with the Agreement for Sale within the date specified therein, then the Promoter shall return the amount received from the Allottee in respect of that property with interest and compensation, on the Allottees' demand. The power of exercising the option of either staying in the Project or for withdrawing from it lies only with the Allottees under the provisions of Section 18(1) of the Act. Further, Section 19(4) of the Act, 2016 gives right to the allottees to claim refund along with interest and/or compensation in case the Promoter fails to give possession of the apartment in accordance with the terms and conditions of Agreement for sale.
15.2 The Hon'ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India (supra) observed that the requirement to pay interest is not a penalty as the payment of interest is compensatory in nature in the light of the delay suffered by the allottee who has paid for his apartment but has not received possession of it. The obligation imposed on the promoter to pay interest till such time as the apartment is handed over to him is not unreasonable. The interest is merely compensation for use of money.
15.3 Subsequently, in Wg. Cdr. Arifur Rahman Khan v. DLF Southern Homes Pvt. Ltd., reported in 2020 SCC OnLine SC 667 affirming the view taken in the Judgment in Pioneer's case (Supra) the Hon'ble Supreme Court held that the term of the agreement authored by the Developer does not maintain a level platform between the Developer and the flat purchaser. The stringent terms imposed on the flat purchaser are not in consonance with the obligation of the Developer to meet the time lines for construction and handing over possession, and do not reflect an even bargain. The failure of the Developer to comply with the contractual obligation to provide the flat within the contractually stipulated period, would amount to a deficiency of service. Given the one-sided nature of the Apartment Buyer's Agreement, the consumer fora had the jurisdiction to award just and reasonable compensation as an incident of the power to direct removal of deficiency in service.
15.4 Recently the Hon'ble Supreme Court, while dealing with the provisions of Section 18 of the Act, 2016, in the case of Imperia Structures Ltd. v. Anil Patni, Civil Appeal Nos. 3581-3590 of 2020, decided on 02.11.2020, vide para 23, was pleased to observe that the right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed and the proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the Project. In that case he is entitled to and must be paid interest for every month of delay till the handing over of the possession. It is upto the allottee to proceed either under Section 18(1) or under proviso to Section 18(1).
15.5 U.P. Government framed “Uttar Pradesh Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules, 2018” (hereinafter referred to as Rules, 2018), wherein under Rule 9.2(ii) and 9.3(i), the rate of interest payable by the promoter or by the allottee respectively are defined in case of default by either of the party. These Rules are extracted below:—
Rule 9.2(ii)
The Allottee shall have the option of terminating the Agreement in which case the Promoter shall be liable to refund the entire money paid by the Allottee under any head whatsoever towards the purchase of the apartment, along with interest at the rate equal to MCLR (Marginal Cost of Lending Rate) on home loan of State Bank of India + 1% unless provided otherwise under the Rules, within forty-five days of receiving the termination notice:
Provided that where an Allottee does not intend to withdraw from the Project or terminate the Agreement, he shall be paid, by the Promoter, interest at the rate prescribed in the Rules, for every month of delay till the handing over of the possession of the Apartment/Plot, which shall be paid by the Promoter to the Allottee within forty-five days of it becoming due.
Rule 9.3
The Allottee shall be considered under a condition of Default, on the occurrence of the following events:
Rule 9.3(i)
In case the Allottee fails to make payments for 2(two) consecutive demands made by the Promoter as per the Payment Plan annexed hereto, despite having been issued notice in that regard the Allottee shall be liable to pay interest to the promoter on the unpaid amount at the rate equal to MCLR (Marginal Cost of Lending Rate) on home loan of State Bank of India + 1% unless provided otherwise under the Rules. The Promoter must not be in default to take this benefit.
15.6 On examination, we find that these Rules-2018 notified by U.P. Government are in consonance with the definition of interest as provided in Section 2(za) of the Act, in as much as that the interest chargeable from the allottee by the promoter, in case of default in payment as per demand, is equal to the rate of interest which the promoter is liable to pay to the allottee, in case of default/delayed possession on the part of promoter.
15.7 We have come across various orders of the Regulatory Authority wherein it had granted interest at the rate of MCLR+1% per annum in case of delayed projects and had an occasion to examine the issue of rate of interest at MCLR+1% awarded by the Regulatory Authority in Appeal No. 295 of 2019 (U.P. Avas Vikas Parishad v. Devesh Kumar Tiwari) decided on 20.02.2020 and held as under:—
“We feel that this imbalance is on account of the fact that the buyer/allottee has much less bargaining power as compared to the seller in the real estate market and therefore the buyers/allottees have no choice but to sign on such “dotted line”, “one sided, unfair and unreasonable” terms and conditions/Agreements. We are therefore of the view that the rate of MCLR +1%, as prescribed by the Government and as being ordered by the Regulatory Authority, be payable from the date of deposit of money in case the allottee wishes to withdraw from the project; and from the specified/expected date of possession in case the allottee wishes to stay in the project, would balance the equities and are just and fair and will fall within the term “interest at such rate as may be prescribed” as used in Sections 12, 18 & 19 ………”
It is our considered view that drawing light from the Rules of 2018, and the fact that often and allottee/buyer has to supplement his savings by taking loan at the MCLR percent interest (compound), the simple rate of interest at MCLR+1 percent balances the equities and is in line with the word and spirit of the Act and can be taken as “interest at such rate as may be prescribed” as mentioned in Sections 12, 18 and 19 of the Act, till the rate of interest for the purpose is notified by the State Government.
15.8 At this stage we have also examined the grievance raised by the respondent that Section 19(4) of the Act, 2016 provides that if the promoter fails to comply or is unable to give possession of the apartment, plot or building in accordance with the terms of agreement for sale, the allottee shall be entitled to claim refund of amount paid along with interest at such rate, as may be prescribed and compensation in the manner as provided under the Act, 2016 but in the instant case the promoter is constantly trying to avoid the obligation imposed and the allottee/respondent has to bear triple damage, firstly he is paying interest on the loan obtained from the Bank, secondly he is paying rent and thirdly he is facing the unexpected increase of construction cost, and found force in his submissions.
15.9 In view of the aforementioned, we are of the view that the respondent is entitled for interest on account of delayed possession and the rate of interest i.e. MCLR+1% granted by the Regulatory Authority is fair, just and reasonable - as it balances the equities between the parties and the Regulatory Authority's action is in accordance with the provisions of the Act, 2016 and Rules, 2016. Question no. (3) is answered in affirmative in favour of the respondent.
17. Vide question No. 4 we are required to examine as to whether the Regulatory Authority passed order without taking into consideration the difficulties faced by the appellants in completion of the project as per promised time schedule as well as the difficulties raised and pointed out by the promoter/appellant could be looked into by the Regulatory Authority and any benefit could have been given to the promoter/appellant for delay in completion of the project.
16.1 The promoter/appellant confined its claim on the basis of only two grounds i.e. ground ‘s’ and ‘t’ of the instant appeal and the ground ‘s’ is basically regarding agitation and hindrance created by previous land owners which resulted in suspension of work since October, 2017. It is admitted position that in pursuance to the advertisement issued by the promoter/appellant for allotment of residential plots in Trans Ganga City the respondent applied for a plot and was allotted a residential plot bearing no. C-298, Sector-3, measuring approximately 120 sq.mts. in the industrial area, Trans Ganga (Housing), District Unnao through lottery system, vide allotment letter dated 10.05.2016 on lease basis for a period of 90 years and as per the Brochure of the Scheme the plot was to be delivered by December, 2016. Therefore, the respondent, feeling aggrieved, filed complaint on 15.09.2019 seeking direction for possession of the developed plot as per commitment and interest as is being charged by the Banks and compensation.
16.2 Under the scheme of the Act, 2016 there is no provision for extending the period of possession as promised vide allotment letter/Builder Buyer Agreement. Section 5 of the Act provides for grant of registration to the project of a promoter by the RERA and Section 6 of the Act provides for extension of registration granted under Section 5 by the authority on application made by the promoter, due to force majeure. Further the authority may, in reasonable circumstances without fault on the part of the promoter, based on the facts of each case, may extend the registration granted to the project not exceeding a period of one year by recording reasons for the same and under explanation clause of Section 6 force majeure has been defined as a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature, affecting the regular development of the real estate project. This extension of registration by RERA is only to save the promoter from penal consequences of non compliance of the various provisions of the Act, 2016.
16.3 The Hon'ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India (supra) vide paras 256, 257 & 258 was pleased to observe as under:—
“256. Section 4(2)(l)(C) enables the promoter to revise the date of completion of project and hand over possession. The provisions of RERA, however, do not rewrite the clause of completion or handing over possession in agreement for sale.
Section4(2)(l)(C) enables the promoter to give fresh time line independent of the time period stipulated in the agreements for sale entered into between him and the allottees so that he is not visited with penal consequences laid down under RERA. In other words, by giving opportunity to the promoter to prescribe fresh time line under Section 4(2)(l)(C) he is not absolved of the liability under the agreement for sale.
257. Section 18(1)(b) lays down that if the promoter fails to complete or is unable to give possession of an apartment due to discontinuance of his business as a developer on account of suspension or revocation of the registration under the Act or for any other reason, he is liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice in this behalf including compensation. If the allottee does not intend to withdraw from the project he shall be paid by the promoter interest for every month's delay till handing over of the possession. The requirement to pay interest is not a penalty as the payment of interest is compensatory in nature in the light of the delay suffered by the allottee who has paid for his apartment but has not received possession of it. The obligation imposed on the promoter to pay interest till such time as the apartment is handed over to him is not unreasonable. The interest is merely compensation for use of money.
258. In paragraph-9 of Alok Shanker Pandey v. Union of India, (2007) 3 SCC 545, the Apex Court has held that “There is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. …………….. The object of Section 18 is to recompense an allottee for depriving him of the use of the funds paid by him. The promoter who has received money from the allottee but has failed to adhere to his contractual or statutory obligations, cannot claim that he is entitled to utilize the monies without paying any interest with respect thereto to the allottee.”
259.A perusal of Section 18 indicates that payment of interest including compensation or interest, as the case may be, is payable on account of default committed by the promoter. Although this Section does not consider a situation where the promoter is unable to complete or handover possession for no fault of his own, it would be open to him to claim frustration in such a case and return the money to the allotee with interest thereby stopping the interest that is to be paid till handing over possession. The provisions of RERA ensure that the allotees' money is not misused or unreasonably retained by the promoter.
16.4 The term “Force Majeure” is defined in the Concise Law Dictionary by P. Ramanatha Aiyar as follows:—
Force Majeure - Irresistible force or compulsion; circumstance beyond one's control.
16.5 The Hon'ble Supreme Court in the case of Dhanrajamal Govindram v. Shamji Kalidas and Co., AIR 1961 SC 1285, 1291 was pleased to observe that the expression ‘force majeure’ is not a mere French version of the Latin expression “vis major”. It is a term of wider import. Strikes, breakdown of machinery, which though normally not included in “vis major” are included in “force majeure”, the intention is to save the performing party from the consequences of anything over which he has no control.
16.6 The Hon'ble High Court, Orissa examined the issue of force majeure in the case of Md. Serajuddin v. State Of Orissa ., AIR 1969 Ori 152 at 162 and was pleased to observe that, force majeure means act of God, war, insurrection, riot, civil commotion, strike, earthquake, tide, storm, tidal wave, flood, lightning, explosion, fire and any other happening which the lessee would not reasonably prevent or control.
16.7 Recently, in Civil Appeal No. 940/2017 (Vikram Chatterjee v. Union of India), the Hon'ble Supreme Court has defined Force Majeure as follows:—
“Force Majeure shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature”.
16.8 The term ‘force majeure’ has been defined in Black's Law Dictionary, as ‘an event or effect that can be neither anticipated nor controlled. It is a contractual provision allocating the risk of loss if performance becomes impossible or impracticable, especially as a result of an event that the parties could not have anticipated or controlled.’
16.9 Force majeure clause is generally provided in the Contracts/Agreements and this clause typically spells out specific circumstances or events, which would qualify as force majeure events. The consequences of occurrence of such events, to qualify for the benefit of force majeure, they should be beyond the control of the parties and the parties will be required to demonstrate that they have made attempts to mitigate the impact of such force majeure events. Depending upon the language of the force majeure clause, the parties may be required to issue a notice formally intimating the other party of the occurrence of such events and the invocation of the force majeure clause. Further a developer, in the position of appellant would be conscious of the delays/difficulties claimed and cannot set this up as a defence to claim for compensation, where a delay has been occasioned beyond the contractually agreed period for handing over possession.
16.10 On examination of the pleadings and record we could not find any document in support of the claim of the promoter/appellant except the averments made in the memo of appeal and ground ‘s’. Even otherwise the claim of the promoter/appellant regarding non consideration of its difficulties in completion of the project is beyond the scope of the scheme of the Act and if there is any delay either in delivery of possession or an allottee chooses to withdraw from the project due to delay or otherwise then the allottee is entitled for interest/compensation/penalty.
16.11 As per record, the possession of the developed plot was required to be given by the promoter/appellant by the end of December, 2016, therefore, the Regulatory Authority rightly, after examining the pleadings and appreciating the submissions of the parties, directed for providing possession within time frame and interest at the rate of MCLR+1% since December, 2016 till the date of actual possession. Question no. (4) is answered accordingly.
18. The appellant during the course of pendency of the instant appeal, informed the Tribunal through an affidavit dated 17.11.2020 that the appellant - U.P. State Industrial Development Corporation Limited/U.P. State Industrial Development Authority, has taken a decision to get the Project registered with RERA and accordingly a letter dated 05.10.2020, has been sent to the Secretary, Real Estate Regulatory Authority, U.P. Lucknow and as such the prayer no. ‘ii’ is liable to be deleted.
19. The request for deletion of prayer clause no. ‘ii’ in memo of appeal was allowed vide order dated 08.02.2021 and applicant/appellant was permitted to delete the prayer no. ‘ii’ from the memo of appeal.
20. A peculiar fact of the matter is that the appellant vide para no. 5.8 of memo of appeal and para 11 of the affidavit filed in support of appeal stated that the Corporation on 30.09.2019 decided to offer the refund of entire deposits along with interest @ 6% from the date of deposit, subject to the acceptance of the respective allottees and in response to the said offer, about 400 allottees applied for refund and rest agreed to continue and remained with the appellant's project.
21. From the aforesaid averments of the appellant one thing is clear that appellant wants to give possession of the allotted plots to the respective allottees and also agreeable to give 6% interest to refund seekers, even then challenged the directions of the Regulatory Authority regarding giving possession to the respondent within 90 days and the rate of interest i.e. MCLR+1% for delay. If we examine both the rates of interest, we will find very minor difference in liability on the appellant. Further the appellant might have been aggrieved with the time line prescribed by the Regulatory Authority for giving possession of the plot to the respondent, but the respondent is entitled for the interest for the delay period on the deposited amount till handing over of possession of the allotted plot, since the appellant has been using the funds of the respondent.
22. The Regulatory authority has passed the order after examining the pleadings in accordance with the provisions of the Act, 2016 and Rules, 2016 and we are of the considered view that there is no illegality or perversity in the impugned order passed by the Regulatory Authority. Accordingly, the appeal is dismissed.
23. We deem it proper to direct the Registry to remit the amount deposited by the appellant towards compliance of the provisions of Section 43(5) of the Act, to the concerned account of UPRERA. The UPRERA will dispose of the same in pursuance to the execution proceedings, if any, initiated by the respondent for recovery of the interest amount and if the amount is less than the amount deposited by the appellant/promoter then after satisfying its order the rest of the amount will be refunded to the promoter/appellants and in case the amount is higher, then UPRERA may proceed in accordance with law for recovery of the rest of the amount from the promoter/appellants.
24. The appellants are directed to ensure compliance of the order of RERA within 45 days from the date of communication of this order.
25. It is open for the respondent to proceed for execution of the order of RERA in case of non-compliance.
26. No order as to costs.