Comp. No. 74/2021
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REAL ESTATE REGULATORY AUTHORITY
National Capital Territory of Delhi 2nd Floor, Shivaji Stadium Annexe building, Shaheed Bhagat Singh Marg, New Delhi - 110001. Reserved on : 15.03.2022
Pronounced on : 24.05.2022
(Case heard via Video Conference)
Comp. No. 74/2021 Project: Regalia Mr. Narendra Singh Waldia Complainant
Through: Garv Malhotra, Adv Vs.
1. Colours Housing Society Respondents-1
2. M/s Vanshi Buildtech Pvt. Ltd. Respondents-2
Through: None
Coram:
Mr. Anand Kumar, Chairperson Mr. Ramesh Chandra, Member Mr. Ajay Kumar Kuhar, Member Final Order
Dated : 24.05.2022
1. A complaint was filed in FORM 'M' on 06.08.2021 by Mr. Narendra Singh Waldia (hereinafter referred as "Complainant") stating that he took membership in the Colours Housing Society (hereinafter referred as "Respondents-1") on 30.04.2015 and booked a 2 BHK apartment having area of 1050 sq. ft. in their project namely
"Regalia" in L Zone, Dwarka, New Delhi. He was made member of housing scheme
"Regalia" as per welcome letter dated 30.04.2015. The Complainant made a payment of Rs. 12,71,000/- (Rupees Twelve Lakh Seventy One Thousand Only) to the Respondents-1.
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2. The Complainant submitted that he has complied with all the terms and conditions of the housing project application but the Respondents-1 failed to meet up with their part of the contractual obligations. Therefore, the Complainant seeks refund of amount deposited with Respondents-1 along with interest.
3. A preliminary hearing in the case was held on 23.09.2021 and a notice to the Respondents-1 was issued on same date.
4. The matter was heard in several hearings dated 23.09.2021, 30.11.2021, 18.01.2022 and 10.02.2022.
5. The Respondents-1 were directed vide order dated 30.11.2021 to file reply by 14.12.2021 and the case was listed for hearing on 18.01.2022. Since, the Respondents did not file reply by 14.12.2021, another opportunity was given to them to file reply by 31.11.2021 and the case was listed for hearing on 10.02.2022. On 10.02.2022, the Counsel for the Respondents-1 appeared and informed that they have filed reply on 09.02.2022 through email. Considering the delay in filing the reply, the Authority imposed a cost of Rs.5,000/- and the case was listed for further hearing on 15.03.2022.
6. Since, no one was present for Respondents on 15.03.2022, the Authority decided to proceed ex-parte due to repeated absence of Respondents-1 on various dates and reserved the case for orders.
A. Summary of arguments and submissions made by the Respondents-1
i. The complaint is not maintainable under RE (RD) Act, 2016, Respondents-1, being a society.
ii. That the present complaint is not maintainable as the Respondents-2 (Vanshi Buildtech Pvt. Ltd.) have nothing to do in the present alleged dispute between the Complainant and the Respondents-1. The Complainant has no relationship with Respondents-2 and further no money at any of time has been paid by the Complainant to Respondents-2.
iii. The present complaint is liable to be dismissed/rejected in view of the order dated 18.01.2022 passed by this Authority in case bearing no. F. RREP/SM- 138/2019 titled as Secretary, RERA vs. Colors Housing Society.
iv. The present complaint is not maintainable in view of the fact that the Respondents-1 have already been deregistered as a Society and since the
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society is no more in existence, no relief can be granted in favour of the Complainant and against the Respondents-1.
B. Analysis and Consideration:
7. A perusal of the documents available on record shows that the Respondents have issued five receipts dated 04.08.2015, 09.05.2015, 30.04.2015, 07.07.2015 acknowledging deposits of Rs. 11,000/-, Rs.1,60,000/-, Rs. 1,00,000/-, Rs. 5,00,000/- , Rs. 5,00,000/- respectively. Hence, the payment of Rs. 12,71,000/- (Rupees Twelve Lakh Seventy One Thousand Only) made by the Complainant with the Respondent Society is a recorded fact.
8. The Respondents have referred to the order passed by this Authority in F. RREP/SM- 138/2019. A perusal of records shows that the Authority vide order dated 18.01.2022 has passed the following order in the case no. F. RREP/SM-138/2019 titled as Secretary, RERA vs. Colors Housing Society:
"Submissions made by the Ld. Counsel for the Noticee Society are taken on record, Keeping all facts in view, the Authority passes the following orders:-
i. The imposed cost shall be deposited by the Noticee Society within 45 days from the date of issuance of this order.
ii. The Noticee Society shall not make any new members till registration of its Projects with RERA, NCT of Delhi,
iii. The Noticee Society shall not collect any money from the existing members till such time their projects are registered with RERA, NCT of Delhi.
iv. This order will not preclude any member from seeking the refund from the Noticee Society alongwith applicable rate of interest by making an application before the Noticee Society or before the appropriate competent Authority."
As per this order, the Authority did not approve any action taken by Noticee Society. Since Noticee Society had not registered any project with RERA, NCT of Delhi, the Authority barred them to collect any further money from existing members or make any new members. Since Noticee Society had collected the money from the members on wrong pretexts by misleading the members. It is further ordered that the order dated 18.01.2022 will not preclude any member from seeking the refund from the Noticee Society alongwith applicable rate of interest by making an application before the Noticee Society or before the appropriate competent Authority. And, hence Complainant is well within his rights to seek refund alongwith interest.
9. A perusal of record shows that Respondent Society was registered under the Societies Registration Act, 1860 vide registration no. S/RS/SW/1/28/2014 issued on 11.06.2014 by the Registrar of Societies, District South West, Govt. of NCT of Delhi
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and section 20 of the said Act does not permit such societies to undertake "housing"
as an activity. Section 20 of the Societies Registration Act, 1860 is reproduced hereunder as:
"To what societies Act applies.—The following societies may be registered under this Act:— Charitable societies, the military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts for instruction, the diffusion of useful knowledge, 1[the diffusion of political education], the foundation or maintenance of libraries or reading-rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collections of natural history, mechanical and philosophical inventions, instruments, or designs.
State Amendments:
*Section 20 (Delhi) in The Societies Registration Act, 1860
" —In section 20, for the words "promotion of science, literature, or the fine arts", substitute the words "promotion of social welfare, activities conducive to the promotion and improvement of the natural environment (including forests, rivers and wild life), compassion for living creatures, literature, science, sports, games or the fine arts". [Vide Act 26 of 1983, sec. 2(c) (w.r.e.f. 22-6-1983).]"
10. The Respondents, a Society registered under Society Registration Act, 1860, though not authorized to undertake "housing" activity; advertised membership, misled the people, made members for their housing project and collected monies from them and, therefore, would come under the purview of RE (RD) Act, 2016. The Respondents by collecting the monies in the name of housing project have, on the face of it, committed a fraud on the members and general public.
11. The statement of objects and reasons of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred as "RE (RD) Act, 2016") clearly states that the RE(RD) Act, 2016 attempts to balance the interests of consumers and promoters by imposing certain responsibilities on both. It seeks to establish symmetry of information between the promoter and purchaser, transparency of
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contractual conditions, sets minimum standards of accountability and a fast-track dispute resolution mechanism.
12. An allottee/housebuyer can seek refund of amount invested with promoter with interest or compensation under section 18 of RERD Act, 2016. If the promoter fails to complete project by the date specified in agreement to sale and also under section 12 of RERD Act, 2016 if he/she was misled by any information furnished by promoter with regard to the project either through advertisement or otherwise.
13. In the present complaint, the Complainant intends to withdraw from the project and is seeking refund of the amount paid with Respondents-1 in respect of subject unit under section 18(1) of the RERD Act, 2016 which reads as under:
"Section 18: - Return of amount and compensation 18(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."
14. Section 12 of the RERD Act, 2016 cast a duty upon the promoter to provide any correct and updated information to its members regarding the current status of the project and the likely date by which the project will be completed. It reads as under:
"Section 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:
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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."
15. The Respondents-1, in complete disregard to their duties, not only failed to furnish correct information to the Complainant but also misled him by concealing information that their society cannot undertake housing activity. The guidelines and procedure for registration of society under the Societies Registration Act, 1860, provided by Govt. of NCT of Delhi has specified the types of societies which can be registered under the Act of 1860. As per the instructions issued under the guidelines, these can be welfare societies, literary societies, fine arts and cultural societies etc. but no housing society can be registered under the Act of 1860. So by undertaking housing as an activity the Respondents-1 have cheated the members. The proviso to section 12 of RE (RD) Act of 2016 also provides for not only refund of the amount invested, interest and compensation in case Complainant intends to withdraw from the proposed project. Thus, the Complainant can seek refund not only under section 18 but also under section 12 of the RE (RD) Act, 2016.
16. The law is well settled that the allottees/homebuyers hold an unqualified right to seek refund of the amount with interest at such rate as may be prescribed in this behalf. A conscious decision has been taken by the legislature to cast an obligation upon the promoter to refund the amount on demand along with interest at rate prescribed. It has also been held through the recent judgments of the Hon'ble Supreme Court that the Regulatory Authority has exclusive jurisdiction to direct refund of the amount, and interest on the refund amount to the allottees. (Vide: Imperia Structures Ltd. Vs. Anil Patni and Another, 2020 (10) SCC 783, and Newtech Promoters and Developers Pvt. Ltd. v. State of UP And Ors. LL 2021 SC 641).
17. It is an admitted fact that Complainant became member of Respondents-1 Society in August 2015 and booked an apartment for Rs. 31,40,000/- (Rs. Thirty One Lakh Forty Thousand Only) and paid Rs. 12,71,000/- (Rupees Twelve Lakh Seventy One Thousand Only) to them. So far as, M/s Vanshi Buildtech Pvt. Ltd., Respondents-2 are concerned, the Complainant has not been able to show their liability towards the Complainant.
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18. Further, it is observed that the Respondents-1 have neither deposited the cost of Rs.5000/-imposed upon them for delay in filing reply nor filed any application for condonation of cost imposed. As such the cost of Rs.5,000/- imposed on the Respondents vide order dated 10.02.2022 remains payable. The Authority is of the considered opinion that this cost be paid to the Complainant in addition to the refund to be made by the Respondents-1.
19. Thus, in the light of the aforesaid, we consider it appropriate to direct the Respondents-1, M/s Colours Housing Society, to refund the entire amount of Rs. 12,71,000/- (Rupees Twelve Lakh Seventy One Thousand Only) to the Complainant within 45 days of issuance of this order along with interest at the rate of 9% per annum (MCLR+2%) from the date of payment of each sum until the date of its actual return, and also pay to him Rs. 5,000/- as cost imposed on Respondent-1 on 10.02.2022 for delay in filing the reply.
20. No orders as to costs.
21. The case is disposed of accordingly.
A.K. Kuhar Ramesh Chandra
Member Member
Anand Kumar
Chairman