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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: 28.08.2024
Pronounced on: 08.10.2024
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Project: CSSOS Officers Enclave
Mr. Sanjay Kumar Malviya …Complainant
Through: Adv. Manindra Dubey
Vs.
Central Secretariat Services Officers Society (CSSOS) …Respondents
Through: None
Coram:
Mr. Ajay Kumar Kuhar, Member
Mr. Devesh Singh, Member
Final Order
Dated: 08.10.2024
1. A complaint was filed in FORM ‘M’ on 18.04.2023 by Mr. Sanjay Kumar Malviya
(hereinafter referred to as “Complainant”) under section 31 r/w section 18 of RE
(RD) Act, 20161 stating that he booked a 2BHK flat in 2019 in the housing
project, ‘CSSOS Officers Enclave’ (hereinafter referred to as ‘Project’)
promoted by Central Secretariat Services Officers Society (hereinafter referred
to as “Respondents” or “Respondent Society”) in L zone, Dwarka, New Delhi.
2. The Respondents through Welcome Letter dated 11.11.2019 confirmed his
membership and welcomed him as a new resident of proposed “CSSOS Officers
Enclave” project.
3. The Complainant submitted that he paid a total of Rs.19,85,775/- (Rupees
Nineteen Lakh and Eighty-Five Thousand Seven Hundred and Seventy-Five
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Only) to the Respondents in three instalments for a proposed flat in their project
“CSSOS Officers Enclave” and thus is claiming the refund for the same amount.
4. The Complainant has submitted that since there were loopholes in RERA
registration, Society registration and land pool policy under which land was
submitted to DDA and majority of the contributions made by the allottees was
siphoned off by the Respondents, therefore, he wants to withdraw from the
project and seeks refund of amount deposited with the Respondents along with
interest and/or compensation as well.
5. A preliminary hearing in the case was held on 03.07.2023. Notice to the
Respondents was issued on 10.07.2023 through registered post and on
11.07.2023 via email.
6. Inspite of service of various notices, the Respondents did not file reply to the
complaint. Also no one appeared for the Respondents during the hearings held
on various dates. Therefore, vide order dated 29.05.2024, the Authority decided
to proceed ex-parte due to repeated absence of the Respondents on various
dates.
7. We have perused the documents available on records and heard the arguments
of the Complainant.
Analysis and Consideration:
8. The complainant has claimed compensation and sought refund as well, at the
very outset, it is pertinent to shed light on the issue whether damages can be
granted by the Authority. The Hon'ble Apex Court in the case of M/s. Newtech
Promoters and Developers Pvt. Ltd vs. State of UP & Ors. (CIVIL APPEAL
NO(S). 6745 6749 OF 2021) has categorically held, "when it comes to a
question of seeking the relief of adjudging compensation and interest thereon
under Sections 12, 14, 18, and 19, the adjudicating officer exclusively has the
power to determine, keeping in view the collective reading of Section 71 read
with Section 72 of the Act." It is thus clear that the Authority does not have the
power to grant the relief of compensation under Section 18 of The Act. As per
Section 71, the complainant may approach the Adjudicating Officer for the grant
of compensation. In view of the same, we are not considering the relief as to
compensation in the present order.
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9. A perusal of the documents available on record shows that three receipts were
issued by the Respondents are as follows:
S.No. Date of Receipt Amount paid
11.11.2019 Rs. 51,000/-
1.
21.11.2019 Rs. 9,37,725/-
2.
28.01.2020 Rs. 9,97,050/-
3.
TOTAL Rs.19,85,775/-
Hence, a total payment of Rs.19,85,775/- (Rupees Nineteen Lakh and Eighty-
Five Thousand Seven Hundred and Seventy-Five Only) by the Complainant to
the Respondents is a recorded fact.
10. The Complainant has placed on record copies of Welcome Letter and receipts
which clearly show that the Respondents collected money for constructing flats
in their project “CSSOS Officers Enclave”.
11. After hearing the arguments and having gone through the records of the case,
we notice that the Respondent Society is registered under Societies
Registration Act, 1860 by the Registrar of Societies. No Society registered
under the Societies Registration Act, 1860 can undertake housing as an activity
considering the provision made under section 20 which is reproduced as under:
“20. 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.”
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State Amendment
*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).]”
The Respondents, a Society registered under Societies 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 & 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.
12. The RE (RD) Act, 2016 has been enacted to induct professionalism and
standardization in the real estate sector, paving the way for catalyzing
investments and accelerating growth of sector in the long run. To achieve these
objectives, the Act created a Regulatory Authority to supervise the conception,
initiation and completion of a real estate project. The RE (RD) Act, 2016 is a
special law enacted to address issues in the real estate sector. Therefore, all
disputes between homebuyers/allottees and promoters/developers relating to
any real estate project covered under RE (RD) Act of 2016, can be raised before
the concerned Real Estate Regulatory Authority (RERA). Section 79 of the RE
(RD) Act, 2016 even bars jurisdiction of civil courts to entertain any suit or
proceeding in respect of any matter which the Authority is empowered under the
Act to determine. Moreover, section 89 of RE (RD) Act, 2016 says that
provisions of this Act shall have an overriding effect on anything inconsistent in
any other law in force.
13. An exhaustive definition of "promoter" is provided under section 2(zk) of the
Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to
as “RE (RD) Act, 2016 or Act”) which is reproduced below:
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2. (zk) “promoter” means, -
i) a person who constructs or causes to be constructed an
independent building or a building consisting of apartments,
or converts an existing building or a part thereof into
apartments, for the purpose of selling all or some of the
apartments to other persons and includes his assignees; or
ii) a person who develops land into a project, whether or not
the person also constructs structures on any of the plots, for
the purpose of selling to other persons all or some of the
plots in the said project, whether with or without structures
thereon; or
iii) any development authority or any other public body in
respect of allottees of-
(a) buildings or apartments, as the case may be,
constructed by such authority or body on lands owned
by them or placed at their disposal by the
Government; or
(b) plots owned by such authority or body or placed at
their disposal by the Government, for the purpose of
selling all or some of the apartments or plots; or
iv) an apex State level co-operative housing finance society and
a primary co-operative housing society which constructs
apartments or buildings for its members or in respect of the
allottees of such apartments or buildings; or
v) any other person who acts himself as a builder, coloniser,
contractor, developer, estate developer or by any other
name or claims to be acting as the holder of a power of
attorney from the owner of the land on which the building or
apartment is constructed or plot is developed for sale; or
vi) such other person who constructs any building or apartment
for sale to the general public.
Explanation. - For the purposes of this clause,
where the person who constructs or converts a building into
apartments or develops a plot for sale and the persons who
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sells apartments or plots are different persons, both of them
shall be deemed to be the promoters and shall be jointly
liable as such for the functions and responsibilities specified,
under this Act or the rules and regulations made thereunder;
14. Furthermore, the issue of whether a Society falls under the purview of the RE
(RD) Act, 2016, has been thoroughly discussed by the Hon’ble Real Estate
Appellate Tribunal (‘REAT’), Delhi, in its order dated 12.05.2023, in the case
titled Jeevan Ashray Welfare Society Vs. Diwakar Garg. The relevant
paragraph of the said order reads as follows:
"14. The appellant society by no stretch of imagination is a welfare
society even though their registration is under the Societies
Registration Act, 1860. The registration of the appellant society,
as also similarly placed Cooperative Societies under the Multistate
Cooperative Societies Act or the Societies Registration Act or similar
such enactment, despite their sole or primary object being to develop
land and construct apartments, is clearly an abuse of the process of
law for escaping other stringent statutes which make
them accountable to the buyers as also the Regulatory Authorities. As
noted above, despite opportunities, appellant was not able to show
any activity of the Society which could be termed as a welfare activity.
The sole intent of the registration of this and similarly placed societies
is to develop land and construct apartments and in the process to
enrich themselves inappropriately by tweaking, twisting or abusing
the law, which cannot be permitted under the garb of an argument that
the appellant and similarly placed societies are not ‘promoter’
within the meaning of section 2(zk) solely for reasons of their
registration under the Societies Registration Act or the Multistate
Cooperative Societies Act or similar such enactments.
15. A literal interpretation of the definition of promoter under section
2(zk) itself is clear and apparent, notably sub-clause (iv) which
provides for an Apex State Level Cooperative Housing
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Finance Society and a Primary Cooperative Housing Finance Society,
similar to the appellant society, which constructs apartments or
buildings for its Members to be a promoter. Section 2(zg) of the Act,
which defines the word ‘Person’ used while defining the word
‘Promoter’, reinforces the above position of law. The appellant society
is registered under the Societies Registration Act, 1860 and
their activity as a society is confined to constructing a ‘real estate
project’, as defined under Section 2 (zn) comprising apartments for its
members. The appellant society has a large number of members, who
have been solicited for membership on assurances of a plot of land on
a share of plot of land and an apartment to be constructed by the
society. The appellant society admits having purchased land for
development and construction of apartments and such activity makes
them amenable to the Real Estate (Regulation and Development) Act,
2016 and for prior registration of their project under Section 3 of the
Act at the appropriate stage. The context of the activities of the
appellant has been shown on record by way of documents that the
members have been assured of a constructed apartment and that the
respondents have deposited moneys with the appellant from time to
time as per the demands raised by the society. The contours of the
activities and the conduct of the appellant does make them fall within
the ambit of the definition of promoter as provided in Section 2 (zk) of
the Act. Even though, we are not examining the felicity or correctness
of their registration under the Societies Registration Act, but their
amenability to the Real Estate (Regulation and Development) Act,
2016 cannot be doubted. Even the elaborated definition of the word
‘Person’ used to define the promoter, as given in Section 2(zg)
categorically includes in its fold a cooperative society registered
under any law relating to cooperative societies, as also an association
of persons or body of individuals, whether incorporated or not, thus
shutting the door to prevent unscrupulous persons from hiding
under the garb of their registration under any other law relating to
cooperative societies.
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16.In view of the aforesaid discussion, the contention of the appellant
that it is not a promoter as defined under the Act and that they are
not amenable to RERA jurisdiction, is rejected and the finding of the
Authority that appellant is a ‘Promoter’ within the meaning of Section
2(zk) of the Act, is upheld.”
It is clear from the above that Respondent comes under the jurisdiction of
Authority and also squarely falls within in the definition of “Promoter” as given
under Section 2(zk) of the RE(RD) Act, 2016.
15. It must be appreciated that the statement of objects and reasons of RE(RD)
Act, 2016 clearly states that the Act attempts to balance the interests of
consumers and promoters by imposing certain responsibilities on both. It also
seeks to establish symmetry of information between the promoter and
purchaser, enhance transparency of contractual conditions, set minimum
standards of accountability and a fast-track dispute resolution mechanism.
16. An allottee/house buyer can seek refund of amount invested with promoter
under section 18 of RE(RD) Act, 2016, if the promoter fails to complete project
by the date specified in agreement to sale with interest including compensation
and also under section 12 of RE(RD) Act, 2016 if he/she was misled by any
information furnished by promoter with regard to the proposed project either
through advertisement or otherwise.
17. In the present complaint, the Complainant intends to withdraw from the said
project and is seeking refund of the amount paid to Respondents in respect of
subject unit under section 18(1) of the RE(RD) Act, 2016 on account of delay
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
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(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.”
18. Section 12 of the RE(RD) Act, 2016 casts a duty upon the promoter to provide
correct and updated information to allottees regarding the project. 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:
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.”
19. The Respondents, in complete disregard to their duties, not only failed to furnish
correct information to the Complainant but also misled him by concealing
information that the society cannot undertake housing activity.
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20. 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).
21. On perusal of the documents on record and submissions made by both the
parties, the Authority is of view that the Respondents are in contravention of the
sections 18 and 12 of RE (RD) Act, 2016. As such, the Complainant is entitled
to get the refund of the amount paid by him along with the interest at prescribed
rate @ 10.75% p.a. (i.e., MCLR plus 2%) as per provisions of section 18 and
12 of RE (RD) Act, 2016 read with Rule 15 of the NCT of Delhi RE(RD)
(General) Rules, 20162.
22. In the light of the aforesaid, we consider it appropriate to direct the
Respondents, ‘Central Secretariat Services Officers Society (CSSOS)’ to
refund the entire amount of Rs.19,85,775/- (Rupees Nineteen Lakh and
Eighty-Five Thousand Seven Hundred and Seventy-Five Only) to the
Complainant, Mr. Sanjay Kumar Malviya within 45 days of issuance of this order
along with interest at the rate of 10.75% per annum (MCLR+2%) from the date
of payment of each sum until the date of its actual return.
23. The case is disposed of accordingly.
24. No orders as to costs.
Devesh Singh Ajay Kumar Kuhar
Member Member
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The National Capital Territory of Delhi Real Estate (Regulation and Development) (General) Rules, 2016
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