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2017 SCC OnLine RERA (Mah) 9

Before Maharashtra Real Estate Regulatory Authority, Mumbai

(BEFORE B.D. KAPADNIS, MEMBER AND ADJUDICATING OFFICER)

Shri Nikhil Ravindranath Rao … Complainant.

Versus
Shri Jayesh Shah … Respondent.
Complaint No. CC006000000000240
Decided on November 14, 2017
FINAL ORDER
The Complainant has filed this complaint under Section 18 of the Real Estate
(Regulation and Development) Act, 2016 (RERA).
2. The Complainant contends that he booked flat No. 0603 situated on 6th floor, A-
wing of Respondent's Gaurav Discovery Project, village Malwani, Malad(West), Mumbai
Suburban District for Rs. 36,48,540/-. The Respondent agreed to deliver the
possession of the flat by the end of December 2016. However, the Respondent has
failed to deliver the possession of the flat on the specified date, therefore, the
Complainant seeks the refund of the monies paid by him to the Respondent, with
interest and compensation.
3. The Respondent contends that the Agreement of Sale had been executed in the
year 2015 when RERA was not in force and therefore, this Authority has no jurisdiction
to adjudicate this dispute. The Respondent contends that he could not deliver the
possession of the flat by the end of December 2016 as agreed because he got the
Completion Certificate to build only 17 floors and accordingly they have been
constructed. However/ he proposes to construct a building comprising of 21 floors but
the Competent Authority did not give the permission for constructing the upper four
floors. Hence, this reason of delay was beyond his control. Hence, he denies liability to
refund the money. According to him, if he would be found liable to refund the amount
paid by the Complainant, the Complainant is entitled to get it back with simple
interest at the rate of 9 % per annum as mentioned in Clause 17 of the Agreement of
Sale. Therefore, he requests to dismiss the complaint.
4. Following points arise for consideration.
1) Whether MahaRERA has jurisdiction to entertain this complaint?
2) Whether the Complainant is entitled to get refund of the amount paid by him to
the Respondent, with interest and compensation under Section 18 of RERA?
5. I answer these points in affirmative for the following reasons:
6. Jurisdiction:
The respondent's learned advocate submits that the agreement of sale has been
executed during the Maharashtra Ownership of Flats (Regulation of promotion of
Construction, Sale, Management and Transfer) Act 1963 (for short, MOFA) regime.
RERA came into effect from 1st May, 2017 and it is prospective. He further submits
that the date of possession mentioned in registration certificate is not crossed and
therefore there is no breach of any provision of RERA. Hence, MahaRERA has no
jurisdiction to entertain this complaint.
I find, the cause of action for claiming possession after the lapse of the agreed date
of possession becomes a recurring cause of action. The claimant's right to claim his
money back or to claim possession continues the agreed date of possession till the
date of filing of complaint. If the cause of action survives after coming into force of
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RERA, MahaRERA gets jurisdiction over all the disputes pertaining to the eligible real
estate projects requiring registration u/s. 3. The ongoing projects bring with them the
legacy of rights and liabilities created under the statutes of the land in general and
The Indian Contract Act and MOFA in particular. Section 79 of RERA bars the
jurisdiction of the civil court from entertaining any suit or proceeding in respect of any
matter which the Authority, Adjudicating Officer or Appellate Tribunal is empowered
by or under RERA to determine. Hence, the Authority gets the jurisdiction over such
matters which the civil court had. The Authority can take cognizance of the
agreements executed under MOFA also and is equally competent to grant the relief
relating to it. This view gets the support from Section 88 of RERA which provides that
its provisions shall be in addition to, and not in derogation of, the provisions of any
other law for the time being in force. MOFA has not been repealed. In this context,
section 71(1) of RERA can be looked into. It provides that for the purpose of
adjudicating compensation u/s. 12, 14, 18 & 19 of RERA, an Adjudicating Officer can
be appointed by the Authority. Its proviso provides that any person whose complaint
in respect of matters covered by sections 12, 14, 18, 19 of RERA is pending before the
Consumer Disputes Redressal forum, State Consumer Disputes Redressal Commission
or National Consumer Dispute Redressal Commission on or before the
commencement of RERA, he may, with the permission of the said forum withdraw
the complaint pending before it and file it before the Adjudicating Officer under RERA.
This provision therefore, indicates that sections 12, 14, 18, 19 RERA are retroactive.
The right to claim return of amounts paid by the allotte to the promoter is preserved
by Section 18 of the Act.
Moreover, relevant part of section 18 of RERA reads,
‘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;’
On plain reading of this provision it becomes clear that date of completion referred
to in this provision means the date specified in the agreement. The word “therein”
refers to the “agreement” and not the date of completion revised by the promoter
unilaterally while registering the project. Hence I find myself unable to accept the
submission of respondent's learned advocate that as the date of completion mentioned
in registration certificate is not crossed, this Authority has no jurisdiction. Considering
all these aspects, I find that the Authority has jurisdiction to entertain this complaint
as the complainant's right to claim back their money in the case of withdrawal from
the project still subsists under RERA.
8. Refund of amount, interest & compensation.
The Complainant has placed the Agreement of Sale on record which shows that the
Respondent agreed to deliver the possession of the flat by December 2016.
Admittedly, the Respondent has failed to deliver the possession of the flat on the
specified date mentioned in the Agreement.
Section 18 of RERA gives two options to the allottee, when the Promoter fails to
give the possession of the apartment on the date specified in the agreement. The first
option is to continue with the project and claim interest on his investment. Second
option is to withdraw from the project and demand for refund of the monies paid by
him to the Promoter with interest and compensation as the case may be. In this case
the Complainant has exercised his right to claim back him monies.
I have heard the Complainant and Learned Advocate of the Respondent on the
amounts paid by the Complainant. There is no dispute between the parties that the
Complainant paid Rs. 9,11,400/- on 1.7.2011 as the booking amount, Rs. 26,48,940/-
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, the loan amount had also been collected by the Respondent onl.7.2015. Thus, Rs.
35,60,340/- have been paid by the Complainant towards the consideration of the flat.
The Respondent is liable to refund the same. Section 18 provides that the allottee is
entitled to get these amounts with interest at such a rate as may be prescribed. Rule
18 of Maharashtra Real Estate (Regulation and Development)(Recovery of Interest,
Penalty, Compensation, Penalty payable in form of Complaint and Appeal etc.) Rules,
2017 provide that the interest shall be marginal cost of lending rate of interest of SBI
+ 2 %. The marginal cost of lending rate of interest of SBI is currently 8.5 %. Thus,
the Respondent is liable to re-pay the amount of Rs. 9,11,400/- with interest at the
rate of Rs. 10.15 from 1.7.2011. He is liable to pay Rs. 26,48,940/-, the loan amount
with interest charged by the banker since disbursement of the loan amount till the
satisfaction of complainant's claim.
Misc. expenditures- The Complainant also claims Rs. 11,215/- towards loan
processing charges on 17.8.2011, Rs. 2,85,000/- + 13,950/- towards the Stamp Duty
and Registration Fee on 11.3.2015 and 30.6.2015 respectively. He also claims Rs.
1,13,990/- towards vat and service tax deposited on 9.11.2012, total Rs. 4,24,155/.
In my opinion the Complainant is entitled to get reimbursement of these amounts
with interest @ 10.15% because he had to pay the same and because of the
Respondent's failure to deliver the possession on time, he cannot be made to sustain
these losses. On the other hand, so far as the refund of Stamp Duty and Service Tax
are concerned, the Respondent is entitled to get their refund from the concerned
authorities, so he also would not be at any loss. Since I have directed the Respondent
to pay principal amount with interest, I do not find it necessary to direct him to pay
the rent of Rs. 11,28,000/- claimed by the Complainant.
The Complainant is also entitled to get reasonable amount of Rs. 20,000/- towards
the cost of complaint and hence, the following order.
ORDER
A. The Respondent shall pay the Complainant Rs. 9,11,400/- with interest at the
rate of Rs. 10.15 from 1.7.12011.
B. The Respondent shall pay the Complainant Rs. 26,48,940/-, the loan amount and
shall bear its interest charged by the banker since 1.7.2015 till the satisfaction of
complainant's claim.
C. The Respondent shall pay Rs. 4,24,155/ to the Complainant towards the Misc.
expenses with interest at the rate of Rs. 10.15 from respective dates of their
payment mentioned in Para-8 of this order together with Rs. 20,000/- towards
the cost of the complaint.
D. On satisfaction of the entire claim, the complaint shall execute the document of
cancellation registered agreement of sale, at the cost of respondent.
E. The charge of these amounts shall remain on the flat No. 6031 of Gaurav
Discovery till the satisfaction of the Complainant's claim.
———
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