Anu Jain v. Utc Softech Pvt. Ltd. .

1. The present appeal has been preferred by Smt. Anu Jain (hereinafter referred to as ‘the appellant’) under Section 44(1) of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as ‘the Act, 2016’) against the order dated 06.08.2020 passed by the U.P. Real Estate Regulatory Authority, Regional Officer, Gautam Budh Nagar (hereinafter referred to as the ‘Regulatory Authority’) in Complaint No.NCR144/11/0945/2019 whereby following directions were given:—

(1) The respondent was directed to ensure possession of allotted flat to the complainant, after completing all the facilities as per allotment letter/agreement, after issuing demand letter adjusting the amount as per para 2 of the order with OC/CC by 31.12.2020 and to execute Registry according to rules after taking due stamp fee.

(2) The respondent was directed to ensure payment of interest at the rate of MCLR+1% per annum from 10.06.2017 till receipt of OC/CC or offer of possession after application for O/CC along with electrical certificate, fire safety certificate, structural certificate, lift installation certificate, whichever is later. The amount of interest will be adjusted towards the amount of final payment. In case the amount of interest exceeds, the excess amount shall be returned to the complainant. Keeping in view the period of force majeure the delay interest will not be calculated from 25.03.2020 to 25.09.2020. In case of other complainants the calculation shall be made as above, according to agreement.

(3) The builder will take interest at the rate of MCLR+1% from the buyer as per provision of Section 2(za)(i) in case any amount remains due to the buyers.

2. The facts of the case, in brief, as culled out from the memo of appeal, are that the appellant booked a unit in the respondent's project “Urbtech Trade Center” situated at Plot No. 35, Block-B, Sector 132, Noida. Vide allotment letter no. UTC-0774 dated 28.01.2014 the appellant was allotted shop/office bearing unit no. 313, Tower-A, third floor, admeasuring 336 sq. ft. super area.

3. As per terms of allotment letter dated 28.01.2014, the total cost of the unit was Rs. 22,08,480/- which is inclusive of additional charges of Rs. 4,86,000/-. In accordance with the terms of the allotment letter as well as the demands raised by the respondent from time to time, the appellant made total payment of Rs. 7,72,000/-.

4. As stated in clause 17(a) of the Allotment Letter, the respondent was required to complete the construction of the said unit within a period of 36 months from the date of signing of the Allotment Letter i.e. 28.01.2014, or within an extended period of six months. Accordingly the construction was to be completed by 28.01.2017 which was further extendable upto 28.07.2017.

5. The respondent failed to complete the construction within the stipulated period and there has been considerable delay on part of the respondent. Owing to delay the appellant requested the appellant multiple times over phone, by visiting its Noida and Faridabad offices and through written/emailed letters, including a legal notice, to cancel the allotment and refund the deposited amount with interest, compensation and legal costs. However, no positive response was ever received from the respondent.

6. The appellant spent a lot of time, money and energy in pursuing the respondent to meet her/her husband for the purpose of settling the issue but the respondent's conduct has been evasive.

7. As the respondent was not willing to entertain or meet the appellant/her husband, the appellant was constrained to serve a legal notice under the provisions of the Insolvency and Bankruptcy Code, 2016 on 12.08.2019 upon the respondent. A reply dated 05.09.2019 to the said notice was received on behalf of the respondent which was totally vague and evasive.

8. After exhausting all options to amicably settle the issue at hand, the appellant was constrained to file a complaint with the Regulatory Authority under Section 31 of the Act, 2016 on 22.11.2019 bearing Complaint No. NCR144/11/0945/2019, against the respondent praying for following reliefs:—

(i) The respondent be directed to pay the principal amount of Rs. 7,72,000/- deposited by the appellant.

(ii) The respondent be directed to pay interest at the rate of 24% per annum i.e. at the same rate as the respondent would have collected for delayed payment.

(iii) The respondent be directed to pay compensation equal to 100% of principal amount i.e. Rs. 7,72,000/- for causing harassment and mental agony to a working woman over a prolonged period of time.

(iv) Legal costs may be awarded to the appellant.

9. The Regulatory Authority vide impugned order dated 06.08.2020 decided the complaint of the appellant in the manner indicated in para 1 above. Aggrieved against the said impugned order the appellant has filed the present appeal.

10. The appellant has challenged the impugned order passed by the Regulatory Authority on the following grounds:—

(1) The Regulatory Authority has passed the impugned order dated 06.08.2020 without application of mind, without appreciating the facts placed before it and without going through the record.

(2) The Regulatory Authority erred in travelling beyond the scope of complaint preferred by the appellant.

(3) The impugned judgment and order passed by the Regulatory Authority is cryptic, illegal and manifestly erroneous and is liable to be set aside.

(4) The Regulatory Authority has committed manifest error of law in not granting the reliefs as sought by the appellant.

(5) The appellant filed the complaint before the Regulatory Authority under Section 31 of the Act, 2016 seeking indulgence of the Regulatory Authority to direct the respondent to refund the deposited amount with delay penalty as per Section 18 of the Act, 2016, and compensation.

(6) The Regulatory Authority has failed to consider the fact that as per Section 18 of the Act, 2016 the promoter is liable to pay for the delay in handing over the possession as per agreement.

(7) The Regulatory Authority failed to apply its mind that since the respondent was willingly not making refund and the delay penalty, the appellant had no other option but to approach the Regulatory Authority for taking necessary action against the respondent and the Regulatory Authority should have directed the respondent to refund the deposited amount with penalty as per Section 18 read with Section 2(za) of the Act, 2016.

(8) The Regulatory Authority has failed to examine the documents submitted before it which clearly show the malafide intention of the respondent but the same was ignored by the Regulatory Authority.

(9) It was submitted by the appellant before the Regulatory Authority that the respondent, after many reminders and requests, did not provide possession and is thus liable for losses which the appellant has suffered.

(10) The Regulatory Authority has failed to consider the fact that there is legitimate grievance that the appellant can have against the respondent which comes under the ambit of the Act, 2016 and the Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016.

11. The appellant has prayed for the following reliefs:—

(1) To set aside the impugned order dated 06.08.2020 and to issue a direction or order to the respondent to refund the amount of Rs. 7,72,000/- with delay penalty at the rate of 24% as per the provisions of the Allotment Letter.

(2) To issue an order or direction to the respondent to compensate the appellant for causing harassment and mental agony over a prolonged period of time.

12. The respondent submitted its objection to the memo of appeal and submitted that it repeats and reiterates whatever has been submitted by it in the written statement filed before the Regulatory Authority and maintains the same defense here also before this Tribunal. However, a brief factual narrative of the case is being given for convenience of the Tribunal to elucidate the controversy and assist in a fair adjudication of the matter.

13. It was submitted by the respondent before the Regulatory Authority that for the allotted unit the appellant had opted for construction linked payment plan but the appellant miserably failed to make payment in accordance with the construction linked payment plan and thus failed to perform her contractual obligations.

14. Out of total sale consideration of Rs. 22,08,480/- the appellant paid a sum of Rs. 7,22,000/- only to the respondent upto December 2014. Thereafter she did not pay any money despite numerous demand letters and repeated reminders sent by the respondent. The balance sale consideration of approximately Rs. 14,87,000/- still remains unpaid by the appellant to the respondent.

15. Even payments made by the appellant had been made with great delay. As per payment pan the appellant was under obligation to pay 30% of the basic sale price i.e. Rs. 5,22,144/- within 90 days of booking i.e. on or before 30.04.2014 but the appellant failed to adhere to payment schedule and made payment after delay of 4 months on 1 September 2014.

16. As per terms of the Allotment Letter the respondent could have cancelled the allotment of the booked unit and forfeited the earnest money, but the respondent did not do so on humanitarian ground considering the fact that the appellant had earlier vide her letter dated 03 March 2014 informed the respondent that she was finding it difficult to make payments for the allotted unit and requested the respondent to cancel the allotment because she had been using funds for treatment of her father's illness.

17. It was because of delay in payments of initial installments and nonpayment of later installments made by the appellant and many other similar defaulter allottees which caused delay in completion of respondent's project.

18. The respondent informed the Regulatory Authority that it had already obtained part completion certificate and was ready to deliver possession of unit to the appellant if the appellant paid installments of remaining sale consideration.

19. The Regulatory Authority considering the totality of facts and circumstances of the case, particularly the delay in payments and nonpayment of due installments on part of the appellant herself, and the resultant delay on part of respondent to deliver possession as per terms of Allotment Letter, has most justly and equitably passed the impugned judgment whereby the Regulatory Authority directed the respondent to deliver possession of the unit complete in all respects and to pay interest to the appellant to compensate her for delay in delivery of possession and at the same time allowing the respondent to charge interest from the appellant on unpaid installments and delayed payments.

20. The grounds of appeal to challenge the impugned judgment are misconceived. The case laws cited by the appellant do not lay down any straight jacket of universal application. The appellant who herself has not paid the due installments and has utterly failed to perform her part of contract, cannot legally blame the respondent for delay in completion and delivery of possession of the unit.

21. There being no illegality in the impugned judgment, the instant appeal deserves to be dismissed by this Tribunal with costs in favour of the respondent.

22. The appellant has not filed any reply to the objection of the respondent.

23. Heard Shri Rohan Rohatgi, learned counsel for the appellant and Shri Hanuman Das, learned counsel for the respondent and perused the record.

24. The Regulatory Authority while deciding the complaint of the appellant framed two questions:—

(i) Whether the demand of the complainant for refund of the deposited amount is justified?

(ii) Whether the complainant can be granted interest for the delay period?

25. The Regulatory Authority while deciding question no. (i) placed reliance on the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India (W.P. No. 2737/2017), 2017 SCC OnLine Bom 9302 and provisions of Sections 18(1) and 32 of the Act, 2016 and on para 124 of the said judgment, while examining the issue of moulding relief by granting interest, compensation to the allottee and issuing direction for timely completion of the project, providing accommodation during completion of project, so on and so forth and also on the judgment of Chitra Sharma v. Union of India (Civil Appeal No. 744/2017), and taking into consideration the entire circumstances, as well as the fact that the building of the project is complete, therefore, it will not be appropriate to direct for refund and interest and the complainant should take possession of the flat. While deciding question no. (ii) the Regulatory Authority observed that definitely the allottee/complainant on account of remaining in the project, the allottee/complainant is entitled for interest from the promoter for the delay. It further observed that the allottee/complainant is entitled for interest till the date of offer of possession along with OC/CC and finally directed the respondent to provide possession of the unit to the complainant/appellant by 31.12.2020 after getting completed all the facilities as per allotment letter/Brochure and ensure execution of the conveyance deed after taking stamp fee. The respondent was further directed to pay interest to the appellant from 10.06.2017 till the date of receipt of OC/CC or offer of possession after application for OC/CC along with electrical certificate, fire safety certificate, structural certificate and lift installation certificate, whichever is later, at the rate of MCLR+1%,

26. Aggrieved against the impugned order of the Regulatory Authority dated 06.08.2020 the appellant/complainant preferred the instant appeal raising various grounds. The appellant prayed for setting aside the impugned order dated 06.08.2020 of the Regulatory Authority passed in Complaint No. NCR144/11/0945/2019 and to direct the respondent to refund the deposited amount with interest at the rate of 24% per annum.

27. In order to examine the issue involved in the instant appeal and on the basis of the record we deem it proper to frame the following issues:—

(1) Whether the Regulatory Authority passed the impugned order beyond the pleadings and prayer of the complainant/allottee/appellant?

(2) Whether reliance placed on the case of Chitra Sharma v. Union of India (Civil Appeal No. 744/2017, decided on 09.08.2018) while deciding issue no. 1 relating to refund of the amount of the complainant, is correctly appreciated?

(3) Whether the project in question of the respondent is delayed?

(4) Whether the claim of the appellant/allottee for refund of his deposited amount along with interest is in consonance with the provisions of Section 18 of the Act, 2016?

(5) Whether the appellant is entitled for interest for the delay in completion of the Project under the scheme of the Act, 2016? And if yes, what rate of interest is required to be paid by the Promote to the allottee?

(6) Whether on taking fit out possession by an allottee he will lose his claim for delay in execution of conveyance deed due to non availability of Occupancy Certificate and Completion Certificate from the competent authority?

(7) Whether the allottee is bound to make payment of the installments without there being any development or achieving milestone of the project by the promoter and if any allottee stops payment of the installments, he will fall in the category of defaulter?

28. Vide issue no. (1), we are required to examine, as to whether the order passed by the Regulatory Authority is beyond the pleadings and prayers of the complainant (allottee).

29. The issues of pleading, prayer & moulding of reliefs have been examined time & again by Hon'ble Supreme Court as well as by the Judicial Forums holding therein that the rights of the parties stand crystallized on the date of institution of the proceeding and no party should be permitted to travel beyond the pleadings & prayer.

30. In Bhagwati Prasad v. Shri Chandramaul, AIR 1966 SC 735, the Hon'ble Supreme Court was pleased to observe that:—

“The importance of the pleadings cannot, of course, be ignored, because it is the pleading that lead to the framing of issues and a trial in every civil case has inevitably to be confirmed to the issues framed in the suit. The whole object of framing the issues would be defeated if parties allowed to travel beyond them and claim or oppose reliefs on grounds not made in the pleadings and not covered by the issues.”

31. In S.S. Sharma v. Union of India (UOI), (1981) 1 SCC 397 : AIR 1981 SC 588, the Hon'ble Supreme Court observed that:—

“We are of the opinion that the Courts should ordinarily insist on the parties being confined to their specific written pleadings and should not be permitted to deviate from them by way of modification or supplementation except through the well-known process of formally applying for amendment. We do not mean that justice should be available to only those who approach the Court confined in a strait-jacket. But there is a procedure known to the law, and long established by codified practice and good reason, for seeking amendment of the pleadings. If undue laxity and a too easy informality is permitted to enter the proceedings of a court it will not be long before a contemptuous familiarity assails its institutional dignity and ushers in chaos and confusion undermining its effectiveness. Like every public institution, the Courts function in the security of public confidence, and public confidence resides most where institutional discipline prevails. Besides this, oral submission raising new points for the first time tend to do grave injury to a contesting party by depriving it of the opportunity, to which the principles of natural justice hold it entitled, of adequately preparing its response.”

32. In the case of Krishna Priya Ganguly v. University of Lucknow reported in (1984) 1 SCC 307, while dealing with a matter arising out of a writ petition where the writ-petitioners prayed for merely consideration of his case for admission, Hon'ble Supreme Court was pleased to observe that a court cannot go a step further and grant the relief which the petitioner did not ask for, and held:—

“We do not see any proper material for this conclusion to which the High Court has suddenly jumped apart from the fact that admissions were not to be given by the High Court according to its own notions.

Finally, in his own petition in the High Court, the respondent had merely prayed for a writ directing the State or the college to consider his case for admission yet the High Court went a step further and straightaway issued a writ of mandamus directing the college to admit him to the M.S. course and thus granted a relief to the respondent which she herself never prayed for and could not have prayed for.”

33. The Hon'ble Supreme Court in Ram Sarup Gupta (dead) by LRs. v. Bishun Narain Inter College, (1987) 2 SCC 555 : (1987) 2 SCR 805 was pleased to observe:—

“……It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and material facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet. In order to have a fair trial it is imperative that the party should state the essential material facts so that other party may not be taken by surprise……”

34. The Hon'ble Supreme Court in Orissa Cement Ltd. v. State of Orissa, 1991 Supp (1) SCC 430 (at page 498) has been pleased to observe that it is well settled proposition that it is open to the court to grant, mould or restrict the relief in a manner most appropriate to the situation before it in such a way as to advance the interests of justice.

35. The Hon'ble Supreme Court in the case of Bachhaj Nahar v. Nilima Mandal; reported in (2008) 17 SCC 491, was pleased to observe that a Court cannot make out a case not pleaded. The Court should confine its decision to the question raised in pleadings. Nor can it grant a relief which is not claimed and which does not flow from the facts and the cause of action alleged in the plaint.

36. In Om Prakash v. Ram Kumar, (1991) 1 SCC 441, the Hon'ble Supreme Court observed:—

“A party cannot be granted a relief which is not claimed, if the circumstances of the case are such that the granting of such relief would result in serious prejudice to the interested party and deprive him of the valuable rights under the statute.”

37. In Shiv Kumar Sharma v. Santosh Kumari ., (2007) 8 SCC 600 the Apex Court observed that the appellate court had no power to grant relief not prayed for in the suit.

38. The issue was again examined by the Hon'ble Supreme Court in the case of Bharat Amratlal Kothari v. Dosukhan Samadkhan Sindhi; (2010) 1 SCC 234 and the Hon'ble Supreme Court in paras 29 and 30 of the judgment was pleased to examine and observe that “normally the Court will grant only those reliefs specifically prayed for by the petitioner”. The relevant paras 29 and 30 are quoted as under:

“29. The approach of the High Court in granting relief not prayed for cannot be approved by this court. Every petition under Article 226 of the Constitution must contain a relief clause. Whenever the petitioner is entitled to or is claiming more than one relief, he must pray for all the reliefs. Under the provisions of the Civil Procedure Code, 1908, if the plaintiff omits, except with the leave of the court, to sue for any particular relief which he is entitled to get, he will not afterwards be allowed to sue in respect of the portion so omitted or relinquished.

30. Though the provisions of the Code are not made applicable to the proceedings under Article 226 of the Constitution, the general principles made in the Civil Procedure Code will apply even to writ petitions. It is, therefore, incumbent on the petitioner to claim all reliefs he seeks from the court. Normally, the court will grant only those reliefs specifically prayed for by the petitioner. Though the court has very wide discretion in granting relief, the court, however, cannot, ignoring and keeping aside the norms and principles governing grant of relief, grant a relief not even prayed for by the petitioner.”

39. The Hon'ble Supreme Court in Civil Appeal No. 973 of 2007 Manohar Lal (D) by Lrs. v. Ugrasen (D) by Lrs. (decided on 03.06.2010) while examining the issue, whether the court can grant relief which had not been asked for, was pleased to observe that the court cannot grant relief which has not been specifically prayed by the parties. Relevant para nos. 29 to 33 are extracted as follows:—

“29. In Messrs. Trojan & Company v. Rm. N.N Nagappa Chettiar ., AIR 1953 SC 235, this Court considered the issue as to whether relief not asked for by a party could be granted and that too without having proper pleadings. The Court held as under:—

“It is well settled that the decision of a case cannot be based on grounds outside the pleadings of the parties and it is the case pleaded that has to be found. Without an amendment of the plaint, the Court was not entitled to grant the relief not asked for and no prayer was ever made to amend the plaint so as to incorporate in it an alternative case.”

“30. A similar view has been re-iterated by this Court in Krishna Priya Ganguly v. University of Lucknow (1984) 1 SCC 307 : AIR 1984 SC 186; and Om Prakash v. Ram Kumar, (1991) 1 SCC 441 : AIR 1991 SC 409, observing that a party cannot be granted a relief which is not claimed.”

“31. Dealing with the same issue, this Court in Bharat Amratlal Kothari v. Dosukhan Samadkhan Sindhi, (2010) 1 SCC 234 : AIR 2010 SC 475 held:

“Though the Court has very wide discretion in granting relief, the court, however, cannot, ignoring and keeping aside the norms and principles governing grant of relief, grant a relief not even prayed for by the petitioner.”

“32. In Fertilizer Corporation of India Ltd. v. Sarat Chandra Rath, (1996) 10 SCC 331 : AIR 1996 SC 2744, this Court held that “the High Court ought not to have granted reliefs to the respondents which they had not even prayed for.”

“33. In view of the above, law on the issue can be summarized that the Court cannot grant a relief which has not been specifically prayed by the parties.”

40. The Hon'ble Supreme Court in Civil Appeal No. 4887 of 2014 (Arising out of SLP (C) No 22742 of 2005) with Civil Appeal No. 4888 of 2014 (Arising out of SLP (C) No 22772 of 2005) Gaiv Dinshaw Irani v. Tehmtan Irani (decided on 25.04.2014) while examining the issue, whether the High Court taking note of the subsequent events can mould a relief, observed as follows in para nos. 34, 35:—

“34. Considering the aforementioned changed circumstances, the High Court taking note of the subsequent events moulded the relief in the appeal under Section 96 of the Code of Civil Procedure and the same has been challenged by the appellants before us. In ordinary course of litigation, the rights of parties are crystallized on the date the suit is instituted and only the same set of facts must be considered. However, in the interest of justice, a court including a court of appeal under Section 96 of the Code of Civil Procedure is not precluded from taking note of developments subsequent to the commencement of the litigation, when such events have a direct bearing on the relief claimed by a party or one the entire purpose of the suit the Courts taking note of the same should mould the relief accordingly. This rule is one of ancient vintage adopted by the Supreme Court of America in Patterson v. State of Alabama followed in Lachmeshwar Prasad Shukul v. Keshwar Lal Choudhury. The aforementioned cases were recognized by this Court in Pasupuleti Venkateswarlu v. The Motor and General Traders wherein he stated that:

“…If a fact, arising after the lis has come to court and has a fundamental impact It is basic to our processual jurisprudence that the right to relief must be judged to exist as on the date a suitor institutes the legal proceeding. Equally clear is the principle that procedure is the handmaid and not the mistress of the judicial process. If a fact, arising after the lis has come to court and has a fundamental impact on the right to relief or the manner of moulding it, is brought diligently to the notice of the tribunal, it cannot blink at it or be blind to events which stultify or render inept the decretal remedy. Equity justifies bending the rules of procedure, where no specific provision or fairplay is violated, with a view to promote substantial justice - subject, of course, to the absence of other disentitling factors or just circumstances. Nor can we contemplate any limitation on this power to take note of updated facts to confine it to the trial court. If the litigation pends, the power exists, absent other special circumstances repelling resort to that course in law or justice. Rulings on this point are legion, even as situations for applications of this equitable rule are myriad. We affirm the proposition that for making the right or remedy claimed by the party just and meaningful as also legally and factually in accord with the current realities, the Court can, and in many cases must, take cautious cognizance of events and developments subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed.”

“The abovementioned principle has been recognized in a catena of decisions. This Court by placing reliance on the Pasupuleti Venkateswarlu Case (supra), held in Ramesh Kumar v. Kesho Ram . that:

“6. The normal rule is that in any litigation the rights and obligations of the parties are adjudicated upon as they obtain at the commencement of the lis. But this is subject to an exception. Wherever subsequent events of fact or law which have a material bearing on the entitlement of the parties to relief or on aspects which bear on the moulding of the relief occur, the court is not precluded from taking a ‘cautious cognizance’ of the subsequent changes of fact and law to mould the relief.”

“This was further followed in Lekh Raj v. Muni Lal. This Court in Sheshambal (dead) through LRs v. Chelur Corporation Chelur Building while discussing the issue of taking cognizance of subsequent events held that:

“19. To the same effect is the decision of this Court in Om Prakash Gupta case where the Court declared that although the ordinary rule of civil law is that the rights of the parties stand crystallized on the date of the institution of the suit yet the court has power to mould the relief in case the following three conditions are satisfied:…

(i) that the relief, as claimed originally has, by reason of subsequent events, become inappropriate or cannot be granted;

(ii) that taking note of such subsequent event or changed circumstances would shorten litigation and enable complete justice being done to the parties; and

(iii) that such subsequent event is brought to the notice of the court promptly and in accordance with the rules of procedural law so that the opposite party is not taken by surprise.”

“This Court in Rajesh D. Darbar v. Narasinghro Krishnaji Kulkarni, a matter regarding the elections in a registered society, held that the courts can mould relief accordingly taking note of subsequent events. Furthermore, in Beg Raj Singh v. State of Uttar Pradesh while deciding on the issue of renewal of a mining lease held that:

“….A petitioner, though entitled to relief in law, may yet be denied relief in equity because of subsequent or intervening events i.e. the events between the commencement of litigation and the date of decision. The relief to which the petitioner is held entitled may have been rendered redundant by lapse of time or may have been rendered incapable of being granted by change in law. There may be other circumstances which render it inequitable to grant the petitioner any relief over the respondents because of the balance tilting against the petitioner on weighing inequities pitted against equities on the date of judgment.”

“Even this Court while exercising its powers under Article 136 can take note of subsequent events (See: Bihar State Financial Corporation v. Chemicot India (P) Ltd, Parents Association of Students v. M.A. Khan, State of Uttar Pradesh v. Mahindra & Mahindra Ltd.)”

“35. Thus, when the relief otherwise awardable on the date of commencement of the suit would become inappropriate in view of the changed circumstances, the courts may mould the relief in accordance with the changed circumstances for shortening the litigation or to do complete justice.”

41. The object and purpose of pleadings and issues is to ensure that the litigants come to trial with all issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. Its object is also to ensure that each side is fully alive to the questions that are likely to be raised or considered so that they may have an opportunity of placing the relevant evidence appropriate to the issues before the Court for its consideration. Pleadings made in a case lead to framing of issues to be examined by the Courts. Further when the facts necessary to make out a particular claim, or to seek a particular relief, are not found in the plaint, the Court cannot focus the attention of the parties, or its own attention on that claim or relief, by framing an appropriate issue. No party should be permitted to travel beyond its pleadings and the Courts are to avoid making out a case not pleaded.

42. Similarly, when there is no prayer for a particular relief and no pleadings to support such a relief, and when defendant has no opportunity to resist or oppose such a relief, if the court considers and grants such a relief, it will lead to miscarriage of justice. Thus it is said that no amount of evidence, on a plea that is not put forward in the pleadings, can be looked into to grant any relief.

43. Further it is well established principle that in an action where a party has prayed for a larger relief it is always open to the Court to grant him any smaller relief that he may be found to be entitled in law and thereby render substantial justice. The Court can undoubtedly take note of changed circumstances or subsequent events and suitably mould the relief to be granted to the party concerned in order to meet out justice in the case. As far as possible, the anxiety and endeavour of the Court should be to remedy an injustice when it is brought to its notice.

44. It is our considered view that the Regulatory Authority had passed the impugned order directing the promoter to give possession of the apartment to the allottee without appreciating the pleading & prayer of the allottee, in other words the impugned directions for giving possession to the allottee is beyond the pleading and relief sought by the Allottee. The Regulatory Authority in the name of moulding relief passed orders against and contrary to the prayer of the allottee/appellant, which is also against the object and spirit of the provisions of Section 18 as well as other provisions of the Act, 2016. Further, while deciding a complaint the administrative functions of the Regulatory Authority provided in Sections 32 and 34 of the Act, 2016 cannot be clubbed and complaint ought to have been decided on its merit after examining the pleading and prayer. Issue no. (1) is decided accordingly.

45. Issue No.(2): The Regulatory Authority in the impugned order has placed reliance on the judgment of Hon'ble Supreme Court in the case of Chitra Sharma v. Union of India [Writ Petition (Civil) No. 744 of 2017 decided on 9 August, 2018]. The examination of the said judgment reveals that the proceedings were initiated under Article 32 of the Constitution of India for protecting the interest of home buyers in the project floated by Jaypee Infratech Ltd., who had been left in lurch and faced with a situation of human distress, occasioned by the failure of the developers to meet their contractual obligations and a legal regime as it then stood under the IBC which provided no solace to home buyers. The Hon'ble Supreme Court taking into consideration the fact that an amount of Rs. 750 crores was lying in deposit before the Hon'ble Supreme Court in pursuance to the interim direction along with interest accrued and some home buyers have earnestly sought the issuance of interim direction to facilitate a pro-rata disbursement of this amount to those of the home buyers who seek a refund, declined to accede the request of home buyers for the reason that during the pendency of the CIRP, it would be a matter of law, be impermissible for the Court to direct a preferential payment being made to a particular class of financial creditors, whether secured or unsecured. Further directing disbursement of the amount of Rs. 750 crores to the home buyers, who seek refund would be manifestly improper and cause injustice to the secured creditors since it would amount to a preferential disbursement to a class of creditors and once recourse to the discipline of the IBC has been taken, it is necessary that its statutory provisions be followed to facilitate the conclusion of the resolution process. Secondly, the figures available on the web portal opened by the amicus curiae, indicate that 8% of the home buyers have sought refund of their money while 92% would evidently prefer possession of the homes, which they have purchased. They would have a legitimate grievance if the corpus of Rs. 750 crores (together with accrued interest) is distributed to the home buyers who seek a refund. The purpose of the process envisaged by the IBC for the evaluation and approval of a resolution plan is to form a composite approach to deal with the financial situation of the corporate debtor. Allowing a refund to one class of financial creditors will not be in the overall interest of a composite plan being formulated under the provisions of the IBC. Further RBI had moved before the Court seeking permission to initiate an insolvency resolution process, etc.

46. In our considered view, the observations of Hon'ble Supreme Court in para-40 of judgment rendered in the case of Chitra Sharma (supra) was in a peculiar facts and circumstances of the said case and do not apply to the cases of home buyers seeking refund on account of delay in completion of the Project/giving possession of the apartment/flat to a home buyer in accordance with the terms of the agreement for sale under the scheme of Act, 2016. Issue no. (2) is decided accordingly.

47. Vide issue no. 3 we are required to examine as to whether the project in question of the respondent is delayed?

48. From the pleadings on record it is evident that the appellant booked A shop in the respondent's project “Urbtech Trade Center” situated at Plot No. 35. Block-B, Sector 132, Noida and paid Rs. 7,72,000/-. As per allotment letter dated 28.01.2014 possession was to be delivered within 36 months from the date of the allotment letter i.e. by 28.01.2017 or within an extended period of six months i.e. by 28.07.2017. The appellant has made a payment of Rs. 7,72,000/- to the respondent.

49. The respondent in its reply submitted that possession of the flat in question was likely to be offered in three years which was tentative and subject to force majeure or such circumstances beyond the respondent's control and admitted that on account of various circumstances there was some delay in raising the construction of the said scheme and this meager delay was not deliberate but due to compelling circumstances.

50. The Regulatory Authority while examining the complaint came to the finding that there was a delay in completion of the project.

51. We have examined the pleadings on record and come to the conclusion that as per allotment letter dated 28.01.2014 the possession was to be given tentatively by 28.01.2017, but it does not mean that in the name of ‘tentative possession’ the respondent can take the word ‘tentative’ in its favour and offer the possession with unreasonable delay. The delay is admitted by the respondent, may be due to certain compelling circumstances, but the fact remains that the project was delayed. Issue no. (3) is decided accordingly.

52. Vide issue no. (4) we are required to examine as to whether the claim of the appellant/allottee for refund of her deposited amount along with interest is in consonance with the provisions of Section 18 of the Act.

53. 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, 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.

54. A perusal of the statement of objects and reasons of the Act of 2016 makes it clear that the Real Estate Sector had been largely unregulated and the Consumer Protection Act, 1986 was not adequate to address all the concerns of the buyers in the Real Estate Sector, and therefore the present Act of 2016 has been promulgated with a view to protect the interests of the consumers in the Real Estate Sector and to ensure greater accountability towards consumers and to significantly reduce frauds and delays, and also to curb the current high transaction costs.

55. The Act spells out the obligations of the Promoter of a real estate project and the consequences if the Promoter fails to fulfill those obligations. Some of those obligations are enumerated in Section 11, 12, 13 and 18 of the Act which are as follows:—

“11. Functions and duties of promoter.-

(1)………………………

(2)………………………

(3)………………………

(4) The promoter shall-

(a) be responsible for all obligations, responsibilities and functions under the provisions of this Act or the rules and regulations made thereunder or to the allottees as per the agreement for sale, or to the association of allottees, as the case may be, till the conveyance of all the apartments, plots or buildings, as the case may be, to the allottees, or the common areas to the association of allottees or the competent authority, as the case may be : Provided that the responsibility of the promoter, with respect to the structural defect or any other defect for such period as is referred to in sub-section (3) of section 14, shall continue even after the conveyance deed of all the apartments, plots or buildings, as the case may be, to the allottees are executed.

(b) be responsible to obtain the completion certificate or the occupancy certificate, or both, as applicable, from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be;

(c) be responsible to obtain the lease certificate, where the real estate project is developed on a leasehold land, specifying the period of lease, and certifying that all dues and charges in regard to the leasehold land has been paid, and to make the lease certificate available to the association of allottees;

(d) be responsible for providing and maintaining the essential services, on reasonable charges, till the taking over of the maintenance of the project by the association of the allottees;

(e) enable the formation of an association or society or co-operative society, as the case may be, of the allottees, or a federation of the same, under the laws applicable:

Provided that in the absence of local laws, the association of allottees, by whatever name called, shall be formed within a period of three months of the majority of allottees having booked their plot or apartment or building, as the case may be, in the project;

(f) execute a registered conveyance deed of the apartment, plot or building, as the case may be, in favour of the allottee along with the undivided proportionate title in the common areas to the association of allottees or competent authority, as the case may be, as provided under section 17 of this Act;

(g) pay all outgoings until he transfers the physical possession of the real estate project to the allottee or the associations of allottees, as the case may be, which he has collected from the allottees, for the payment of outgoings (including land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities payable to competent authorities, banks and financial institutions, which are related to the project):

Provided that where any promoter fails to pay all or any of the outgoings collected by him from the allottees or any liability, mortgage loan and interest thereon before transferring the real estate project to such allottees, or the association of the allottees, as the case may be, the promoter shall continue to be liable, even after the transfer of the property, to pay such outgoings and penal charges, if any, to the authority or person to whom they are payable and be liable for the cost of any legal proceedings which may be taken therefor by such authority or person;

(h) after he executes an agreement for sale for any apartment, plot or building, as the case may be, not mortgage or create a charge on such apartment, plot or building, as the case may be, and if any such mortgage or charge is made or created then notwithstanding anything contained in any other law for the time being in force, it shall not affect the right and interest of the allottee who has taken or agreed to take such apartment, plot or building, as the case may be;

(5)…………………..

(6)…………………..

12. Obligations of promoter regarding veracity of the advertisement or prospectus.-Where any person makes an advance or a deposit on the basis of the information contained in the notice advertisement or prospectus, or on the basis of any model apartment, plot or building, as the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under this Act:

Provided that if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, or the model apartment, plot or building, as the case may be, intends to withdraw from the proposed project, he shall be returned his entire investment along with interest at such rate as may be prescribed and the compensation in the manner provided under this Act.

13. No deposit or advance to be taken by promoter without first entering into agreement for sale.—

(1) A promoter shall not accept a sum more than ten per cent of the cost of the apartment, plot, or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force.

(2) The agreement for sale referred to in sub-section (1) shall be in such form as may be prescribed and shall specify the particulars of development of the project including the construction of building and apartments, along with specifications and internal development works and external development works, the dates and the manner by which payments towards the cost of the apartment, plot or building, as the case may be, are to be made by the allottees and the date on which the possession of the apartment, plot or building is to be handed over, the rates of interest payable by the promoter to the allottee and the allottee to the promoter in case of default, and such other particulars, as may be prescribed.

56. A plain reading of Section 11 and 12 of the Act reveals that a promoter has an obligation and responsibility towards the allottees in terms of the Agreement for Sale. The promoter is also responsible for obtaining the C.C. and/or O.C. from the Competent Authority, as well as for execution of the registered conveyance deed in favour of the allottees. Further, in case a person is aggrieved on account of misinformation or false information, he/she has a right to withdraw from the project, and the promoter is liable to return his entire investment alongwith interest and/or compensation. Section 13 imposes responsibilities on the promoter for not accepting a sum of more than 10 percent of the cost of the apartment without first entering into and registering an agreement for sale, which should indicate the payment schedule for the allottees as well as the date on which possession of the apartment is to be handed over to the allottees.

57. Section 18 deals with the issue of return of amount and compensation, the relevant portion of Section 18(1) is extracted as follows:—

“Section 18-Return of amount and compensation —(1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,—

(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or

(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason,

he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act:

Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.”

58. Section 18(1) of the Act provides that if an allottee wishes to withdraw from the project on the ground that the promoter has failed to complete or is unable to give possession of the property in accordance with the agreement for sale within the date specified therein, or due to discontinuance of the promoter's business on account of suspension or revocation of its registration or for any other reason, then the promoter shall return the amount received from the allottee in respect of that property with interest and compensation, on the allottee's demand. Further, if an allottee does not wish to withdraw from the project, he shall be paid by the promoter interest for every month of delay till the handing over of the possession, at such rate as may be prescribed.

59. As per the provisions of Section 18 of the Act, the option of either withdrawing from the project or staying in the project remains with only the allottee. The intent of the legislature is quite clear that the right of exercising the option of either staying in the project or for withdrawing from it is unqualified and if the option is availed by the allottee to withdraw from the project, the money deposited by the allottee has to be refunded by the promoter along with interest at such rate as may be prescribed.

60. Section 19 deals with the Rights and Duties of allottees. Sub-section (4) is relevant for the present case and the same is reproduced hereinbelow:—

“19. Rights and duties of allottees.-

(1) ………………………..

(2)…………………………

(3)………………………..

(4) The allottee shall be entitled to claim the refund of amount paid along with interest at such rate, as may be prescribed and compensation in the manner as provided under this Act, from the promoter, if the promoter fails to comply or is unable to give possession of the apartment, plot or building, as the case may be, in accordance with the terms of agreement for sale or due to discontinuance of his business as a developer on account of suspension or revocation of his registration under the provisions of this Act or the rules or regulations made thereunder.”

61. From the conjoint reading of these provisions, it is evident that if the Promoter/developer fails to fulfill his obligations to hand over the possession as per terms of the agreement, the allottee is entitled to claim refund, along with interest and compensation.

62. The Hon'ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India, W.P.No. 2737/2017, 2017 SCC OnLine Bom 9302, decided on 06.12.2017 was pleased to observe as under:—

“……The plain language of Section 18(1)(a) shows that if the promoter fails to complete or is unable to give possession of an apartment, plot or building in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein, he would be liable to return the amount received by him together with interest including compensation. In case the allottee does not intend to withdraw from the project, the promoter is liable to pay interest for every month's delay till handing over of possession. The purpose of Section 18(1)(a) is to ameliorate the buyers in real estate sector and balance the rights of all the stake holders. The provisions of RERA seek to protect the allottees and simplify the remedying of wrongs committed by a promoter. …….”

63. 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, in para 23, observed as under:—

“23. In terms of Section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the Promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to withdraw from the Project. Such right of an allottee is specifically made “without prejudice to any other remedy available to him”. 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. 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). The case of Himanshu Giri came under the latter category. The RERA Act thus definitely provides a remedy to an allottee who wishes to withdraw from the Project or claim return on his investment.”

64. The Hon'ble Supreme Court in Civil Appeal No. 12238/2018 (Pioneer Urban Land Infrastructure Ltd. v. Govind Raghwan) has observed as follows:—

“We see no illegality in the Impugned Order dated 23.10.2018 passed by the National Commission. The Appellant - Builder failed to fulfill his contractual obligation of obtaining the Occupancy Certificate and offering possession of the flat to the Respondent - Purchaser within the time stipulated in the Agreement, or within a reasonable time thereafter. The Respondent - Flat Purchaser could not be compelled to take possession of the flat, even though it was offered almost 2 years after the grace period under the Agreement expired. During this period, the Respondent - Flat Purchaser had to service a loan that he had obtained for purchasing the flat, by paying Interest @10% to the Bank. In the meanwhile, the Respondent - Flat Purchaser also located an alternate property in Gurugram. In these circumstances, the Respondent - Flat Purchaser was entitled to be granted the relief prayed for i.e. refund of the entire amount deposited by him with Interest.”

65. The Hon'ble Supreme Court in Fortune Infrastructure (now known as HICON Infrastructure) v. Trevor D'Lima (Civil Appeal No. 3533-3534 of 2017 decided on 12.03.2018) was pleased to observe that a person cannot be made to wait indefinitely for the possession and if there is no delivery period mentioned in the agreement, a reasonable time has to be taken into consideration, and had observed that in such a situation a period of 3 years would have been reasonable for completion of the contract.

66. The Hon'ble Supreme Court in Civil Appeal No. 3182/2019 (Kolkata Best International City Pvt. Ltd. v. Devashish Rudra), while examining the issue of delay in possession beyond reasonable period and refund of the amount of home buyer, has been pleased to observe as follows:—

“It would be manifestly unreasonable to construe the contract between the parties as requiring the buyer to wait indefinitely for possession. By 2016, nearly seven years had elapsed from the date of the agreement. Even according to the developer, the completion certificate was received on 29 March 2016. This was nearly seven years after the extended date for the handing over of possession prescribed by the agreement. A buyer can be expected to wait for possession for a reasonable period. A period of seven years is beyond what is reasonable. Hence, it would have been manifestly unfair to non-suit the buyer merely on the basis of the first prayer in the reliefs sought before the SCDRC. There was in any event a prayer for refund. In the circumstances, we are of the view that the orders passed by the SCDRC and by the NCDRC for refund of moneys were justified.”

67. The Hon'ble Supreme Court in Civil Appeal No. 3207-3208/2019 (Marvel Omega Builders Pvt. Ltd. v. Shri Hari Gokhle) has observed as follows:—

“Even assuming that the villa is now ready for occupation (as asserted by the Appellants), the delay of almost five years is a crucial factor and the bargain cannot now be imposed upon the Respondents. The Respondents were, therefore, justified in seeking refund of the amounts that they had deposited with reasonable interest on said deposited amount. The findings rendered by the Commission cannot therefore be said to be incorrect or unreasonable on any count.”

68. Recently Hon'ble Supreme Court in Civil Appeal No. 62 of 2021 Nexgen Infracon Pvt. Ltd. v. Manish Kumar Sinha vide judgment dated 11 January, 2021, while examining the issue of non-willingness of the allottee to take possession of the apartment and his willingness to be satisfied in taking refund of the amount deposited by him with interest at such rate as may deem appropriate by the Court, pleased to observe that “we see no reason to take a different view in respect of the entitlement of the respondents to seek refund of the amount deposited by them. We, therefore, hold that the respondents were justified in seeking refund.”

69. Further, in terms of Sub-Section 5 of Section 4 of the U.P. Apartments Act, 2010, “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 bye-lays.”

70. Evidently, there is a delay in completion of the Project/Tower, in which the flat in question was allotted to the appellant, therefore, we conclude that the delay is solely attributable to the respondent/promoter and allottee cannot be bound to take possession of the Unit/Flat.

71. On the basis of the aforesaid analysis we are of the considered view that the claim of the allottee/appellant for seeking refund of her deposited amount along with interest on account of delay in completion of the Project/handing over of possession of the allotted Unit/Flat is in consonance with the provisions of Section 18 of the Act, 2016. Issue no. (4) is decided accordingly.

72. Vide Issue No. (5) we are required to examine as to whether the appellant is entitled to interest for the delay in completion of the Project under the scheme of the Act, 2016, and if yes, what rate of interest is required to be paid by the Promoter to the appellant.

73. 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.

74. The Hon'ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India, (2018) 1 AIR Bom R 558 observed as under:—

“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 to any other remedy available to return the amount received in respect of that apartment with interest at such rate as may be prescribed 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”.

75. 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 timelines 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.

76. 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).

77. 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.

78. 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.

79. 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 ………”

80. It is important to mention herein that the Hon'ble Supreme Court in Civil Appeal No. 4910-4941/2019 DLF Homes Panchkula Pvt. Ltd. v. D.S. Dhanda while examining the issue of compensation, was pleased to observe as under;-

“If compensation comprises of two parts, (i) by way of interest on the deposited amount from the assured date (milestone date) of completing construction and handling over possession to the actual date of handling over possession, and, (ii) lumpsum amount, we find nothing wrong in it. We do not agree with the builder co.'s contentions that interest on the deposited amount should not be provided since it is not a case of refund but a case of delay in possession. The interest on the deposited amount has to be viewed in the light of the purpose for which it is intended. It is but a way of computing compensation for delay in possession that is commensurate with the amount deposited by the complainant, and here it has been computed after adopting a milestone date as per the builder co.'s own (unfair and deceptive) letter of 05.06.2013. There can be and is no question of not agreeing to an endorsing the award of interest from the said milestone date. Here we may however add that the rate of interest also cannot be arbitrary or whimsical, some reasonable and acceptable rationale has to be evident, subjectivity has to be minimized, a logical correlation has to be established. Albeit detailed arithmetic or algebra is not required. Logical (to the extent feasible) objective parameters should be adopted. Rounding off simplification etc. to make the computation doable could be adopted. We feel it appropriate that, considering that the subject units in question are dwelling units, in a residential housing project, the rate of interest for house building loan for the corresponding period in a scheduled nationalized bank (take, State Bank of India) would be appropriate and logical, and, if ‘floating’/varying/different rates of interest were/are prescribed, the higher rate of interest should be taken for this instant computation.”

81. Further, an allottee deposits amount under the hope and trust that he/she will get the flat within the time schedule advertised at the initial stage. There may be certain cases where allottees might be residing in rented houses and they might have managed their financial position in such a manner that after deposit of amount, they will get flats of their own and thereafter they will be free from payment of rent as then they will shift from rented houses to allotted flats but on account of inordinate delay in delivery of possession of allotted flats, their financial calculations and legitimate expectations stand frustrated causing various types of financial losses to them. On the other hand once the promoter/builder made offers and same are accepted by the allottees with legitimate expectation, the obligation cast upon the promoter/builder is to complete the same within the time schedule mentioned in the offer and if they fail to discharge the same the affected allottees are entitled to the interest and/or compensation for delayed delivery of possession, as the allottees have parted with money which was earning interest. If an allottee chooses to remain in the project and in case the allottee seeks refund then he is entitled for interest on the deposited amount and/or compensation in accordance with the provisions of the Act, 2016, which in our considered view will be in accordance with the principles of equity as well.

82. It is our considered view that drawing light from the Rules of 2018, and the fact that often an 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.

83. On the basis of aforesaid analysis the issue no. (5) is decided in affirmative in favour of appellant.

84. Vide Issue No. (6) we are required to examine as to whether on taking fit out possession by an allottee he/she will lose his/her claim for delay in execution of conveyance deed due to non-availability of Occupancy Certificate and Completion Certificate from the competent authority.

85. On examination of the scheme of the Act, 2016 and the Rules framed thereunder we are unable to find any provision for providing fit out possession. Under the scheme of the Act, 2016 read with U.P. Apartment (Promotion of Construction, Ownership & Maintenance) Act, 2010 the possession can only be offered by a promoter to the allottee after getting Occupancy Certificate and Completion Certificate from the competent authority. Even the Hon'ble Supreme Court in the case of Wg. Cdr Arifur Rahman Khan and Aleya Sultana v. DLF Southern Homes Pvt. Ltd. (now known as BEGUR OMR Homes Pvt. Ltd.) (reported in 2020 SCC OnLine SC 667) was pleased to observe that even if an allottee has taken over possession of the unit/apartment/flat and also executed a conveyance deed his claim for delay in handing over possession of the same still survives. Paras 343, 35 and 36 of the said judgment read as under:—

“34. The developer has not disputed these communications. Though these are four communications issued by the developer, the appellants submitted that they are not isolated aberrations but fit into a pattern. The developer does not state that it was willing to offer the flat purchasers possession of their flats and the right to execute conveyance of the flats while reserving their claim for compensation for delay. On the contrary, the tenor of the communications indicates that while executing the Deeds of Conveyance, the flat buyers were informed that no form of protest or reservation would be acceptable. The flat buyers were essentially presented with an unfair choice of either retaining their right to pursue their claims (in which event they would not get possession or title in the meantime) or to forsake the claims in order to perfect their title to the flats for which they had paid valuable consideration. In this backdrop, the simple question which we need to address is whether a flat buyer who seeks to espouse a claim against the developer for delayed possession can as a consequence of doing so be compelled to defer the right to obtain a conveyance to perfect their title. It would, in our view, be manifestly unreasonable to expect that in order to pursue a claim for compensation for delayed handing over of possession, the purchaser must indefinitely defer obtaining a conveyance of the premises purchased or, if they seek to obtain a Deed of Conveyance to forsake the right to claim compensation. This basically is a position which the NCDRC has espoused. We cannot countenance that view.

35 The flat purchasers invested hard earned money. It is only reasonable to presume that the next logical step is for the purchaser to perfect the title to the premises which have been allotted under the terms of the ABA. But the submission of the developer is that the purchaser forsakes the remedy before the consumer forum by seeking a Deed of Conveyance. To accept such a construction would lead to an absurd consequence of requiring the purchaser either to abandon a just claim as a condition for obtaining the conveyance or to indefinitely delay the execution of the Deed of Conveyance pending protracted consumer litigation.

36. It has been urged by the learned counsel of the developer that a consequence of the execution of the Deed of Conveyance in the present case is that the same ceases to be a transaction in the nature of “supply of services” covered under the CP Act, 1986 and becomes a mere sale of immovable property which is not amenable to the jurisdiction of Consumer Fora. In Narne Construction (P) Ltd. v. Union of India, this Court distinguished between a simple transfer of a piece of immovable property and housing construction or building activity carried out by a private or statutory body falling in the category of “service” within the meaning of Section 2 (1) (o) of the CP Act, 1986. This Court held that:

“8. Having regard to the nature of transaction between the appellant Company and its customers involved much more than a simple transfer of a piece of immovable property it is clear the same constitutes “service” within the meaning of the Act. It was not the case that the appellant Company was selling the given property with all its advantages and/or disadvantages on “as is where is” basis, as was the position in UT Chandigarh Admn v. Amarjeet Singh. It is a case where a clear-cut assurance was made to the purchasers as to the nature and extent of development that would be carried out by the appellant Company as a part of package under which a sale of fully developed plots with assured facilities was made in favour of the purchasers for valuable consideration. To the extent the transfer of site with developments in the manner and to the extent indicated earlier was a part of the transaction, the appellant Company has indeed undertaken to provide a service. Any deficiency or defect in such service would make it accountable before the competent Consumer Forum at the instance of consumers like the respondents.”

The developer in the present case has undertaken to provide a service in the nature of developing residential flats with certain amenities and remains amenable to the jurisdiction of the Consumer Fora. Consequently, we are unable to subscribe to the view of the NCDRC that flat purchasers who obtained possession or executed Deeds of Conveyance have lost their right to make a claim for compensation for the delayed handing over of the flats.”

86. The Hon'ble Supreme Court in Civil Appeal Nos. 1232 and 1443-1444 of 2019 (R.V. Prasannakumaar v. Mantri Castles Pvt. Ltd.) decided on 11.02.2019, reported in (2020) 14 SCC 769, while examining the award of interest by the National Consumer Disputes Redressal Commission (NCDRC) for delay in giving possession by the Builder/Promoter to the allottee/home buyer, pleased to observe that the jurisdiction of the NCDRC to award just compensation under the provisions of the Consumer Protection Act, 1986 could not in the circumstances be constrained by the terms of the agreement if the agreement is one sided and does not provide sufficient recompense to the flat purchasers. The relevant paras 8 and 9 of the said judgment are reproduced below:—

“8. We will at the outset deal with the submission of the developer that the NCDRC was not justified in awarding interest at the rate of 6 per cent per annum and that the terms of the flat purchase agreements must prevail.

9. We are in agreement with the view of the NCDRC that the rate which has been stipulated by the developer, of compensation at the rate of 3 per sq. ft. per month does not provide just or reasonable recompense to a flat buyer who has invested money and has not been handed over possession as on the stipulated date of 31 January 2014. To take a simple illustration, a flat buyer with an agreement of a flat admeasuring a 1000 sq. ft. would receive, under the agreement, not more than Rs. 3000/- per month. This in a city such as Bangalore does not provide just or adequate compensation. The jurisdiction of the NCDRC to award just compensation under the provisions of the Consumer Protection Act, 1986 cannot in the circumstances be constrained by the terms of the agreement. The agreement in its view is one sided and does not provide sufficient recompense to the flat purchasers.”

87. A perusal of the impugned order reveals that the respondent in its submission stated that fit out letter was issued on 12.07.2019 and OC was received from the competent authority on 05.03.2020 and another offer of possession was given during pendency of appeal on 25.12.2020.

88. In view of the aforesaid analysis it can safely be said that a home buyer does not lose his right to claim compensation for the delay in possession even after execution of the conveyance deed and taking possession of the unit/apartment/flat booked by him whereas in the instant case only fit out possession has been given. The fit out possession cannot be termed as legal possession as on account of non availability of Occupation Certificate and Completion Certificate the conveyance deed could not be executed by the respondent, thus, we hold that the complainant/appellant has a right to claim interest/compensation for the delay under the provisions of the Act, 2016. Issue no. (6) is decided accordingly.

89. Vide Issue no. (7) the Tribunal is required to examine as to whether the allottee is bound to make payment of the installments without there being any development or achieving milestone of the project by the promoter and if any allottee stops payment of the installments, he/she will fall in the category of defaulter.

90. In order to examine the issue it would be necessary to examine the scheme of the Act, 2016 relating to functions and duties of the promoter as well as right and duties of the allottees. The entire Act is divided into 10 chapters.

91. Chapter II deals with registration of real estate project and registration of real estate agents. A reading of the provisions of Chapter-II demonstrates how a promoter is expected to commence/register a project after having title, sanctioned plan, permissions and source of funding etc. Chapter III spells out the functions and duties of promoter and the consequences if the promoter fails to fulfill those obligations.

92. Section 11 mandates the promoter to make available to the allottee information such as (i) sanctioned plans, layout plans along with specifications approved by the competent authority by display at the site or as specified by the authority; (ii) the stage wise time schedule of completion of the project including the provisions for civic infrastructure.

93. Section 12 emphasizes obligation on the promoter regarding veracity of the advertisement or prospectus and provides that where any person makes an advance or a deposit on the basis of the information contained in the notice, advertisement or prospectus, or on the basis of any model apartment, plot or building, as the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under the Act.

94. Section 13 relates to “no deposit of advance to be taken by promoter without first entering into agreement for sale”. The promoter shall not accept a sum more than 10% of the cost of the apartment, plot or building, as an advance payment or an application fee from a person without entering into a written agreement for sale, as per law in force.

95. Section 14 mandates the promoter for adherence to sanctioned plans and project specifications and also bars a promoter from 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 written consent of at least 2/3 allottees.

96. Chapter IV deals with rights and duties of allottees. Section 18 deals with the return of amount and compensation. This section relates to return of amount and compensation. If the promoter fails to complete or is unable to give possession of an apartment, plot or building in accordance with the terms of the agreement for sale or duly completed by the date specified therein or 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 shall be liable on demand of the allottees, in case the allottee wishes to withdraw from the project, to return the amount received by him in respect of that apartment, plot or building, with interest including compensation in the manner as provided under the Act. Where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed. This section further provides that the promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land on which the project is being developed or has been developed, in the manner as provided under the Act and claim for compensation shall not be barred by limitation provided under any law for the time being in force. In case the promoter fails to discharge any other obligations imposed on him under the Act or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees in the manner as provided under the Act.

97. Section 19 of the Act provides that the allottee shall be entitled to obtain the information relating to sanctioned plans, layout plans along with specifications, approved by the competent authority and such other information as provided under the Act, Rules and Regulations made thereunder or the agreement for sale signed with the promoter. The allottee shall also be entitled to know stage-wise time schedule of completion of the project including other amenities and services as agreed to between the promoter and the allottee in accordance with terms and conditions of the agreement for sale. The allottee shall be entitled to claim the possession of apartment, plot or building. The allottee shall be entitled to claim refund of amount paid along with interest at such rate as may be prescribed and compensation as provided under the Act from the promoter, 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 or due to discontinuance of his business as a developer on account of suspension or revocation of registration under the provisions of the Act. The allottee shall be entitled to have necessary documents and plans after handing over the physical possession of the apartment or plot or building by the promoter.

98. On deeply examining the provisions of Chapters II, III and IV it is evident that the allottee is entitled to know the time period at the time of booking/issuance of allotment letter regarding sanctioned plans, layout plans along with specifications approved by the competent authority and such other information as provided under the Act, Rules and Regulations made thereunder or the agreement for sale signed with the promoter, like water supply, electricity and obtaining of OC or CC or both. The allottee is also entitled to know stage-wise time schedule of completion of the project including other amenities and services as agreed to between the promoter and the allottee in accordance with terms and conditions of the agreement for sale. The allottee is also entitled to claim the possession of apartment, plot or building. The allottee shall be entitled to claim refund of amount paid along with interest at such rate as may be prescribed and compensation as provided under the Act from the promoter, 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 or due to discontinuance of his business as a developer on account of suspension or revocation of registration under the provisions of the Act. The allottee is also entitled to have necessary documents and plans after handing over the physical possession of the apartment or plot or building by the promoter. For the purpose of registration of project the promoter is also required under Section 4(l)(D)l to submit a declaration supported by an affidavit to the effect that seventy percent of the amounts realized for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose provided that the promoter shall withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project and the promoter shall get his accounts audited within six months after the end of every financial year by a chartered accountant in practice.

99. If any promoter is not informing the progress of the project to its allottees and the withdrawal from the separate account proportionate to the percentage of completion of the project then, an allottee can always stop payment to the promoter till the milestones disclosed by the promoter have not been achieved and he cannot be said to be a defaulter in such situation. Similar issue was examined by NCDRC in CC 189/2017 (Pradeep Kumar Gupta v. Irio Grace Realtech Pvt. Ltd.). The relevant portion of the judgment is being reproduced as under:—

“In my opinion, since the Ops were already in default as far as the offer of possession was concerned, when the 5th, 6th, 7th and 8th installments were demanded, the complainants were under no obligation to pay the said installments. As far as the default in payment of the 4th installment by the complainants in CC No. 1999/2016 & CC No. 2000/2016 is concerned, it would be seen that the said installment was raised at the stage of casting of roof slab of the lower basement. The demand was raised about two weeks before the last date for offering possession of the flats to the said complainants. Since the construction was still at the stage of casting roof slab of the lower basement at that time, the complainants knew that even if they pay the 4th installment, it was impossible for the Ops to deliver possession of the apartments to them by the last date stipulated in this regard i.e. 23.01;.2017 or within six months thereafter, to them. When a flat buyer who is saddled with a demand applicable at the stage when the construction is at a very initial stage and the demand is raised just two weeks before the last date for offer of possession, he is not expected to sink more money with the builder despite knowing that the builder will not be able to honour his contractual obligation even if the benefit of grace period of six months which was otherwise available only in case of unforeseen circumstances, is given to him. Therefore, even the complainants In CC No. 1999/2016 and CC No. 2000/2016 cannot be said to be defaulters, in the sense that they would lose their legal right to claim refund of the amount paid by them and the compensation for the defect/deficiencies on the part of the builder in rendering services to them.”

100. On the basis of the aforesaid analysis we are of the considered view that an allottee cannot be said to be a defaulter, if he/she stops making payment of installments on promoter failing to achieve the target/milestone disclosed/declared in the advertisement, allotment letter or agreement. Issue no (7) is decided accordingly.

101. As far as issue of compensation raised by the complainant/appellant is concerned, the same is not maintainable in the present proceeding. However, it is open for the complainant/appellant to raise the issue before the Adjudicating Officer of the Regulatory Authority in accordance with law, if so advised.

102. On the basis of the aforesaid analysis we are of the considered view that the judgment and order dated 06.08.2020 passed by the Regulatory Authority in Complaint No. NCR144/11/0945/2019 (Anu Jain v. Utc Softech Pvt. Ltd. .) is not sustainable in the eyes of law as the same has been basically passed beyond the pleadings and prayer in the complaint. Accordingly, the same is hereby set aside and we allow the appeal with the following directions:—

(i) The respondent is directed to refund the deposited amount to the complainant/appellant.

(ii) The respondent is further directed to pay interest to the complainant/appellant on the deposited amount from the date of deposit till the refund of the amount at the rate of MCLR+1% per annum.

(iii) The respondent is directed to comply this order within 45 days from the date of receipt of this order.

(iv) The appellant is at liberty to approach the U.P. Real Estate Regulatory Authority for execution of this order in case of non-compliance within the time frame fixed by this Tribunal.

103. No order as to costs.