REAT Mumbai (2024.02.15) in Bharat Narendra Mistry & Anr. vs. M/s. Realgem Buildtech Pvt. Ltd. [DB Crown-Phase 2] [ Appeal No. AT00600000053625/ 2022 In Complaint No. CC006000000196018] held that;
In the case of Fortune Infrastructure (supra) now known as M/s Hicon Infrastructure and Anr. Vs Trevor D'Lima & Ors. [reported (2018) 5 SCC 442], the Hon'ble Apex Court has held that when no date of possession is mentioned in the agreement, the Promoter is expected to hand over the possession within a reasonable time and the period of 3 years is held to be reasonable.
It is therefore clear that there are no shackles or limitation on exercise of their rights by Allottees to seek refund of amount paid with interest once there is delay In possession. The indefeasible right of Allottees to claim interest cannot be defeated by any reason.
It is worthy to note that by the Order dated 10.04.2018, the Allottees were given liberty to file a fresh Complaint by the then Authority. Under the circumstance, we are of the view that the present Complaint/ second Complaint is not barred by the principle of res-judicata.
We are of the view that if the Promoter fails to complete the project or unable to give possession as per specified date mentioned in the agreement for sale or in accordance with the terms and condition of the agreement for sale, the Allottees have unqualified right to seek relief under Section 18 of RERA.
Excerpts of the Order;
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30). on consideration of the submissions advanced by the learned counsel appearing for the respective parties, pleadings of the parties, material placed on record and the impugned Order following points arise for our determination and we have recorded our findings thereupon for the reasons to follow.
REASONS
31). On scanning the pleadings of the parties reveal that it is not in dispute that in February, 20L3, Allottees booked sub;ect apartment in the project known aS "DB Crown" being developed by the Promoter for a total consideration of Rs. Rs.6,67,00,900/-' The Allottees were issued the Allotment letter titled as'Application Form'. The terms of allotment of the subject flat are duly enumerated in the Allotment letter dated 22.02.2013' Allottees have made an initial payment of Rs.t,34,52,579/- and service tax amounting to Rs.4,86,4621- to Promoter. Admittedly parties have not executed agreement for sale. According to Appellants the Promoter had verbally assured the Allottees that physical possession of the subject flat would be given within a period of 3 to 4 years. Despite this, the Promoter failed to discharge his obligation. Therefore, Allottees by their e-mail dated 20.06.2017 conveyed their intention to exit from the project and called upon the Promoter to refund the entire amount with interest' The Promoter did not refund the amount to Allottees. Being dissatisfied with the conduct of the Promoter, Allottees had filed Complaint No.CC006000000001816 under Section 18 of Act, 2016 and sought relief of refund of amount with interest.
32). The Promoter has denied the allegations contending that the Allottees have not produced cogent material on record to show that there is an agreed date of possession between the parties. Therefore, the question of violation of Section 18 of RERA does not arise.
33). In the absence of formal agreement executed by the parties, the date of possession can be deciphered from any other document such as Allotment letter, brochure, e-mail communication, etc. A perusal of Allotment letter (Application form) reveals that there is no mention of date of possession' Except Allotment letter dated 22'02,20t3 there is no document to show agreed date of possession. It is not in dispute that transaction between the parties took place in MOFA regime At the time of booking of the subject flat, Allottees were issued Application form dated 22,02.2013. Section 3(2Xf) of MOFA casts an obligation on Promoter to specify in writing the date by which possession of the flat is to be handed over and he shall handover such possession accordingly. The opening words of Sub-Section 2 of Section 3 of MOFA clearly indicate that the Promoter, who constructs or intends to construct such block or building or flats, shall specify in writing the date by which possession of flat would be handed over. It means it was obligatory on the part of the Promoter to mention the date of possession in the Application form at the time of bookinq of the flat or while issuing Allotment letter or Application form, as the case may be. Admittedly no date of possession has been mentioned in the Application form' It means the Promoter has violated the provisions of Section 3(2Xf) of MOFA. Promoter having himself, failed to comply with the obligation, cannot take advantage of his own wrong to deny that there is no agreed date of possession,
34). In the case of Fortune Infrastructure (supra) now known as M/s Hicon Infrastructure and Anr. Vs Trevor D'Lima & Ors. [reported (2018) 5 SCC 442], the Hon'ble Apex Court has held that when no date of possession is mentioned in the agreement, the Promoter is expected to hand over the possession within a reasonable time and the period of 3 years is held to be reasonable. In the instant case the Allottees booked a flat in February, 2013. The Promoter issued Allotment letter (Application form) to Allottees confirming the carpet area of the flat alongwith payment schedule, other details and other terms and conditions except date of possession. Therefore, in view of ratio and dictum laid down by the Hon'ble Apex Court (supra) Promoter was supposed to handover the possession of the flat to Allottees by January, 2016.
35). It is specific contention of Promoter that execution of agreement for sale is necessary for specifying the date of possession without which no delay can be made out to attract the provisions of Section 18 of RERA for considering relief of refund of amount with interest. Despite several communications, the Allottees neither responded nor executed agreement for sale forwarded to them. The absence of registered agreement for sale and agreed date of possession ought to invalidate a plea for relief under Section 18 of RERA and therefore, the Appellants are not entitled to relief of refund of amount with interest, We should not be oblivious of the fact that RERA Act, 2016 as a welfare legislation, has been enacted mainly to safeguard the interest of the Allottees' Mere non-mentioning of the date of possession or non-execution of agreement for sale cannot be allowed to operate in favour of the Developer who, like respondent, is not responsive to the cause of the allottees. Section 8 of MOFA and Section 18 of RERA for their applicability do not contemplate execution of written and reqistered agreement for sale contrary to what is envisaged under Section 4 of MOFA and under Section 13 of RERA. It has been held by the Hon'ble Bombay High Court in the case of G. Swaminathan Vs. Shivram Co-Operative Housing Society and Others [1983 (2) Bom CR 54Bl that -
".....Not all sections of the Maharashtra Ownership Flats Act, however talk about the execution of such agreements.'. There is no reference to an agreement executed under Section 4 in Section 8 of the said Act. Section 8 is meant to give protection to persons who have parted with monies for the purchase of flats in the event of the Promoter not giving them flats as promised... There is nothing in the provisions of Section 8 which would indicate that this statutory charge is conditional upon the agreement being registered under Section 4..' Moreover, there is no provision under the said Ad to the effect that an agreement for sale which is not registered under Section 4 is void for all purposes."
36). Therefore, we are of the view that mere non-execution of agreement for sale Allottees are not precluded from invoking Section 18 of RERA. The provisions of Section 18 of RERA can equally be invoked in terms of oral or formal agreement executed by the promoter/ developer such as booking letter/ confirmation letter/ LOA/ correspondence etc. capable of being construed as an agreement. In the instant case as Indicated above Promoter issued Allotment letter (Application form) to Allottees confirming carpet area of the flat alongwith payment schedule, other details and other terms and conditions except the date of possession which is capable of being construed as an agreement' Under the circumstance, we do not find substance in the contention of Promoter/ Respondent that sans execution of the agreement for sale and without specifying the date of possession without which no delay can be made out to attract the provisions of Section 18 of RERA for considering relief of refund of amount'
37). It is not in dispute that on the date of commencement of the RERA Act, 2016 the project was an on-going project, as a result thereof, the Promoter registered the project with MahaRERA and declared the date of completion of project as 30'06'2020' It is significant to note that the Promoter did not complete the project on the specified date and revised the proposed date of completion of the project from time to time as 30'12'2020, 30'06'2023, 30.12.2023 and 29.L2.2024. This signifies that the Promoter has miserably failed to adhere to his commitment and was/ is unable to complete the project even on the revised dates of completion of the project, The conduct of the Promoter which signifies that the Promoter has miserably failed to give possession of the subject flat to the Allottees within a reasonable period even though the Allotment letter (Application form) does not expressly state out the possession date, the period of 11 years can in no manner be deemed as a reasonable period.
38). Section 18 of RERA spells out the consequences, if promoter fails to complete or is unable to give possession of the apartment, plot or building, either in terms of agreement for sale or to complete the project by the date specified therein, on account of discontinuation of business as a developer either on account of suspension or revocation of registration under the Act or for any other reasons, the allottee/ homebuyer holds an unqualified right to seek refund of the amount with interest at such rate as may be prescribed in this behalf, As indicated above the Promoter has miserably failed to handover the possession of the subject flat to Allottees within a reasonable period more so on the revised dates, therefore, Appellants are entitled to refund of amount with interest under Section 18 of RERA. The ratio laid down by the Hon'ble Supreme Court in M/s. Imperia Structures Ltd. Vs' Anil Patni & Ors. [in Civil Appeal N0.3581-3590 of 2020] is that-
"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 Proiect. 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). "
It is not in dispute that the Promoter by e-mail dated 05.05.2018 categorically admitted that there was complete inactivity at the project site. It means the delay is not attributable to the Allottees nor is the case of Promoter that the Allottees in any way caused delay in possession,
39). While explaining the scope of Section 18 of RERA, the Hon'ble Supreme Court in M/s Newtech Promoter and Developers Pvt. Ltd. V/s. State of Uttar Pradesh [2021 SCC
Online 10441 dated 11 November, 2021 held that;
"Para 25. The unqualified right of the allottee to seek refund referred under Section 1B(1)(a) and Section 19(4) of the Act is not dependent on any contingencies or stipulations thereof. It appears that the legislature has consciously provided thls right of refund on demand as an unconditional absolute right to the allottee, if the promoter fails to give possession of the apartment, plot or building within the time stipulated under the terms of the agreement regardless of unforeseen events or stay orders of the Court/Tribuna/, which is in either way not attributable to the allottee/home buyer, the promoter ls under an obligation to refund the amount on demand with interest at the rate prescribed by the State Government including compensation in the manner provided under the Ad with the proviso that if the allottee does not wish to withdraw from the project, he shall be entitled for interest for the period of delay till handing over possession at the rate prescribed."
It is therefore clear that there are no shackles or limitation on exercise of their rights by Allottees to seek refund of amount paid with interest once there is delay In possession. The indefeasible right of Allottees to claim interest cannot be defeated by any reason.
40). The aims and objectives of RERA admittedly are heavily titled in favour of Alloftees. However, contrary to the said objectives, the impugned Order is seen to be titled only in favour of the Promoter. It may be noted that despite having all the relevant and sufficient facts placed before it, the Authority, instead of taking the adjudication of the Complaint to its logical end by determining there and then the entitlement of Allottees inter alia to refund with interest under Section 18 of RERA, in case of delay of possession, has unnecessarily and unjustifiably directed the parties to abide by the terms and conditions of the Allotment letter/ Application form dated 22.02.2013. This approach of Authority is contrary to the effective grievance redressal mechanism as envisaged under the RERA Act, 2016. Such an approach defeats the very purpose of RERA Act, 2016 and hence cannot be accepted,
RES JUDICATA
41). The next contention of the Promoter is that the first Complaint was dismissed by the learned Authority vide Order dated 10.04.2018 thereby rejecting the amendment application of Appellants and also their claim under Section 18 of RERA, Act, 2016. The Order dated 10.04.2018 reveals that the Appellants were only granted liberty to agitate the alleged grievance under Sections 11, 12 and 13 while entirely rejecting their case under Section 18 of RERA. Appellants have not challenged this Order. Therefore, this Order has attained finality. Therefore, the subsequent/ second Complaint filed by Appellants seeking same reliefs under Section 18 of RERA Act, 2016 is barred by res judicata. We do not find substance in the said submissions.
42). It is significant to note that while dismissing the former Complaint the learned Authority had observed in the impugned Order that conversion of Complaint filed under Section 18 into Sections 11, 12 and 13 of RERA Act, will amount to change in nature of the proceedings therefore, it is desirable to dismiss the Complaint and allow the Complainants to file another Complaint in a proper form. This signifies that the former Complaint was not decided on merits. The former Complaint was filed initially under Section 18 of RERA for refund of amount with interest. The learned Authority had dismissed the Complaint only on technical grounds and matter in issue in the former Complaint was not heard and decided on merits by the then Authority. The Order dated 10.04.2018 is silent on the point of entitlement or disentitlement of Allottees to claim relief under Section 18 of RERA' This itself is sufficient to show that the matter in issue in the former Complaint was not heard and decided on merits by the then Authority.
43). There is one more reason as to why we have arrived at a unhesitating conclusion that subsequent i.e. the present Complaint is not barred by the principle of res judicata. The e-mail communications produced on record by Promoter reveal that the Promoter was insisting Allottees to execute the agreement for sale' One of the e-mails of the Promoter discloses that there was discussion between the parties on this issue. Besides, the Promoter had also offered/ proposed alternative accommodation at a lower price range to Allottees. The Promoter had given an opportunity to Allottees to accept its offer. Under the circumstance, the Allottees had two options either to exit from the project and seek refund of amount or to opt to accept the offer, The e-mall communications clearly indicate that after negotiations, no fruitful solution had been worked out. The offer of the Promoter was not accepted by the Allottees and they stick up to their stand to exit from the project. These eventualities created or gave rise to new cause of action to Allottees to file a fresh Complaint.
44). It is worthy to note that by the Order dated 10,04.2018, the Allottees were given liberty to file a fresh Complaint by the then Authority. Under the circumstance, we are of the view that the present Complaint/ second Complaint is not barred by the principle of resjudicata.
45). We are of the view that if the Promoter fails to complete the project or unable to give possession as per specified date mentioned in the agreement for sale or in accordance with the terms and condition of the agreement for sale, the Allottees have unqualified right to seek relief under Section 18 of RERA. However, if Promoter revised the date of possession and again assured the Allottees to handover the possession of flat on the revised date then the Allottees have two options, Allottees can give an opportunity to the Promoter to complete the project on the revised date or to seek reliefs as contemplated under Section 18 of RERA Act, 2016. If Allottees exercise first option and give opportunity to Promoter to complete the project on the revised date and on failure of Promoter to handover the possession on the revised date, then Allottees will have recurring cause of action to file Complaint and seek relief under Section 18 of RERA.
46). We would like to reiterate that it is not in dispute that on the date of commencement of RERA Act, 2016 the subject project was an on-going project, therefore Promoter registered the project with MahaRERA and declared the date of completion of project as 30.06.2020. However, the Promoter had failed to complete the project on the said date and again revised the dates for completion of the project from time to time as 31.12.2022, 30.06.2023, 30.12.2023 and 29.12.2024. Therefore, it can be said that the second Complaint is based on a new cause of action/ recurring cause of action. Therefore, by any stretch of imagination it cannot be said that the second Complaint i.e. present Complaint is barred by the principle of res judicata.
APPROBATE AND REPROBATE
47). It is specific contention of Promoter that the first Complaint was filed under Section 18 of RERA seeking relief of refund of amount with interest. During the pendency of the first Complaint, the Allottees had filed application for amendment seeking reliefs under Sections 11, 12 and 13 of RERA. Section 13 of RERA is for execution of agreement for sale, therefore, the party cannot be permitted to "blow hot-blow cold" where one knowingly accepts the benefits of a contract/ or conveyance or of an order, he is estopped from denying the validity of or the binding effect of such contract, or conveyance or order upon himself. Allottees on one hand seek to execute the agreement for sale and on the other hand wants to exit from the project. This clear shifting stance by the Allottees during the pendency of the first Complaint, shows that the Allottees have abandoned their claim for refund with interest. The Appellants have to elect either to claim relief under Section 18 or to claim relief under Section 13 of RERA. Appellants cannot be permitted to approbate or reprobate' We do not find substance in the said contention of the Promoter.
48). A perusal of Application filed by Allottees in the former Complaint for amendment of Complaint reveals that no concession as alleged by Promoter was made by the Allottees. The Application nowhere discloses that the Allottees had abandoned their claim of refund of amount with interest as contemplated under Section 18 of RERA. It is seen from the Application for amendment that the Allottees were under bonafide impression that their claim would not be sustainable in the absence of agreement for sale under Section 18 of the Act, 2016 and on advice of Advocate, they had moved Application for amendment of Complaint. We are of the view that the party can seek two-fold reliefs in alternative form.
49). Learned Advocate Mr. Abir Patel for Promoter has poignantly submitted that e-mail communications between the parties indicate that Appellants were ready for execution of agreement for sale and at the same time they were claiming refund with interest. The Appellants have to elect either to get execution of agreement for sale or to claim relief under Section 18 of RERA. Therefore, Appellants cannot be permitted to approbate or reprobate. We do not find substance in the said contention of the learned Counsel appearing for Promoter. The e-mail communications placed on record by the parties clearly Indicate that since inception Appellants were asking Promoter for refund of amount with interest. As indicated above, Promoter had offered alternative accommodation at a lower price range to Allottees. It means/ the Promoter had given an opportunity to Allottees to accept its offer however, it is evident that the Allottees did not accept this offer of the Promoter and they were insisting the Promoter to refund amount with interest. Apart from this, in the captioned Complaint, Allottees have not asked for two-fold reliefs, they have asked only relief of refund of amount with interest. Under the circumstances, we are of the view that there is no merit in the contention of the Promoter.
50). For the foregoing reasons, we have come to the conclusion that the Promoter has failed to adhere to his obligation in handing over the possession of the subject flat within the reasonable period, Therefore, the Allottees are entitled to refund of amount with interest under Section 18 of RERA. The transaction in the instant case is governed by the RERA Act, 2016. It cannot be ignored that the objective of RERA is to protect the interest of consumers. So, whatever amount is paid by homebuyers to the Promoter should be refunded to the homebuyers on their withdrawal from the project. It is to be noted that Regulations are framed to carry out the purpose of the Act. Regulation 39 of Maharashtra Real Estate Regulatory Authority (General) Regulation, 2017 speaks about saving of inherent powers of the Authority. It reads as under;
'Nothing in the Regulations shalt be deemed to limit or otherwise affect the inherent power of the Authority to make such orders as may be necessary for meeting the ends of justice or to prevent the abuse of the process of the Authority".
Similarly, Regulation 25 of Maharashtra Real Estate Appellate Tribunal, 2019 speaks about saving of inherent powers of the Tribunal;
'25(1) Nothing in these Regulations shall be deemed to limit or otherwise affect the inherent power of the Tribunal to make such orders as may be necessary for meeting the ends of justice or to prevent the abuse of the process of the Tribunal."
It means the Regulatory Authority as well as the Appellate Tribunal have inherent powers under the Regulations framed under RERA Act, 2016 to pass such Orders which are necessary to meet the ends of justice. In exercise of powers thereof and in the interest of justice it is desirable to direct the Promoter to refund the total amount paid by Allottees with interest accordingly.
51). There is no express provision in RERA Act, 2016 by which the Promoter is entitled to forfeit earnest amount or part thereof in the event of cancellation of booking by allottee. The Act is silent on the point of liquidate deduction, forfeiture of amount, etc. if allottee suo moto for whatsoever reason cancels the booking. In view of the above observations, we are of the view that it is improper on the part of Promoter to forfeit the amount paid by Allottees as per the terms of Application form. Allottees are entitled to refund of entire amount with interest. Therefore, the impugned Order is not sustainable in the eyes of law and deserves to be set aside. Consequently, we proceed to pass the following Order.
ORDER
1. Appeal 4T00600000005362512022 is partly allowed.
2. The impugned Order dated 29th December,202l passed in Complaint N0.CC006000000196018 is set aside,
3, The Respondent/ Promoter is directed to refund an amount of Rs.1,39,39,041i- paid by the Allottees/ Appellants with interest at the rate 2% above as per the SBI's Marginal Cost Lending Rate (MCLR) from the dates of payment of the said amount till realization of the entire amount'
4. The charge of the amount shall remain on the respective flat till realisation of the above amount'
5. The Respondent/ Promoter is directed to pay cost of Rs.20,000/- to the Appellants/ Allottees'
6, Copy of this Order be communicated to the Authority and the respective parties as per Section 44(4) of RERA' 2016'
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