REAT UP (2024.09.14) in Abha Khanna (IPE) Vs. KVG Realtech Pvt. Ltd. [(2024) ibclaw.in 133 REAT, Appeal No. 243/2020] held that;
That as per the provisions of the U.P. Apartments Act, 2010 read with the provisions of Act, 2016 a Promoter is required to offer legal and habitable possession to the allottees only after obtaining OC/CC and ask for clearing dues by raising final demand.
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.
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).
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.
Excerpts of the Order;
# 1. By means of this appeal, Abha Khanna (hereinafter referred to as appellant) has challenged the order dated 10.02.2020 (hereinafter referred to as “impugned order”) passed by the Regulatory Authority in complaint No. LKO162/05/0188/2019 (Abha Khanna Vs. M/s KVG Realtech Private Limited) whereby the Regulatory Authority has passed the following directions:- (a) Respondent (M/s KVG Realtech Private Limited) is directed to obtain OC/CC and ensure possession of the unit to the complainant (appellant herein) within 45 days after execution of registry and receiving stamp fee and balance of payment from the complainant. (b) Pay delay interest @ MCLR+1% of SBI for the period from 30.07.2018 (promised date of possession as per agreement) till date of offering possession i.e. 20.09.2019. The amount of delay interest will be adjusted in the last payment due and if the amount of delay interest is more than the payable amount, the same will be returned/remitted to the complainant.
# 2. The brief facts as culled out from the memo of appeal are that:-
2.1 The appellant Abha Khanna booked a Shop Space No. 39 in Millennium Square, on 1st Floor admeasuring 14.11 sq. mt. in the commercial project launched by the respondent known as “Millennium Square” situated at Commercial-1, International Bay-II, Sushant Golf City, Sultanpur Road, Lucknow and the same was allotted by the respondent to the appellant vide allotment letter dated 28.04.2012. A Shop Buyer’s Agreement dated 13.09.2012 was signed between the parties. The cost of the unit as mentioned in the Shop Buyer’s Agreement was Rs 7,59,100/-. As per clause 16 of the said agreement, the respondent had to handover the physical possession of the shop within 36 months from the date of agreement i.e. on or before 13.09.2015.
2.2 As per customer ledger, the total amount deposited by the appellant was Rs 7,59,508.71 till 15.01.2019 while the net value of the shop was increased to 8,50,192/- including the service tax and GST on the total cost of the shop without prior information to the appellant and this occurred due to delay in handing over of the shop by the respondent.
2.3 At the time of booking, the respondent had promised that they had received all the sanctions/NOCs and required permissions from all the concerned authorities and the possession would be given as per the time period, mentioned in the agreement whereas later on the appellant received a letter from the respondent averring that they have got the sanction of the map of the building (project) “Millennium Square” from the Lucknow Development Authority via Permit No.-38580 dated 30.07.2015. Thus the respondent has violated Section 11 (3) of the Act 2016 for concealing the facts.
2.4 The appellant had received offer of possession letter dated 20.09.2019 averring asking to clear the dues and complete necessary formalities for executing sale deed of the said unit on or before 20.10.2019. At the time of offering possession, the respondent had not received the OC/CC. There was a delay of around 4 years in giving the possession letter that too without obtaining the OC/CC. The appellant has further stated that offer of possession issued to the appellant was for the allottees of ‘Felix Square, Sushant Golf City, Lucknow whereas the appellant has booked the shop in the project named “Millennium Square”. In this offer of possession letter, the respondent has informed the appellant that the internal and external development in the “Felix Square Sushant Golf City Lucknow” will not be carried out by the third party.
2.5 After coming of RERA Act into effect in the year 2016, the respondent fraudulently got itself registered with RERA on 04.08.2017 in the category of on-going project which mandates promoter to disclose all the information about the project but the respondent did not inform the Authority about the Shop Buyer’s Agreement.
2.6 The respondent had not only misrepresented the appellant but also misguided the Authority. According to the respondent they have received the permit from Lucknow Development Authority on 30.07.2015 whereas as per the customer ledger they have already started construction which shows that in May 2015, they were on the start of 4th floor slab.
2.7 The appellant seeks the compensation of financial loss, delay penalty, mental agony and discomfort caused due to the respondent. The appellant also demanded for the penalty for delay in handing over possession as per Section 18 read with Section 2 (za) of the Real Estate (Regulation and Development) Act, 2016.
2.8 As per section 12 of Real Estate (Regulation and Development) Act, 2016, where any person makes an advance or a deposit on the wrong information contained in the notice, the advertisement or the prospectus and suffers a loss, harm or damage by reason of any incorrect information, he shall be compensated for the damages by the promoter. The appellant has booked a shop under the project which should have been handed over to the allottee within 36 months but the respondent has failed to do so, even though in the agreement they have mentioned that their township has been approved by the Lucknow Development Authority which is wrong and the appellant was misrepresented. Therefore, the appellant is liable to be compensated under the provisions of the section 12 of the Real Estate (Regulation and Development) Act, 2016.
2.9 Moreover, the respondent has been enjoying the money paid to them for the last 8 years and they are liable to compensate to the complainant suitably for the mental torture, agony, business loss and sufferings because of them.
# 3. Having been aggrieved from the impugned order, the appellant has approached this Tribunal on the following grounds:- BECAUSE, the Regulatory Authority has passed the impugned order dated 10.02.2020 without of application of mind, without appreciating the facts placed before them and without going through the records.
(1). BECAUSE the Learned RERA Authority has failed to consider the fact that the Appellant has prayed in her complaint only for immediate possession of the shop along with the delay interest for the period of 4 years i.e. from the date of possession as per the agreement i.e. 13.09.2015 till actual handing of the physical possession of the shop.
(2). BECAUSE the learned authority erred in travelling beyond the scope of complaint preferred by the appellant.
(3). BECAUSE the learned authority failed to appreciate that the Appellant was entitled for interest as may be prescribed in this behalf under the provisions of the Act of 2016 as the Respondent had delayed in delivering the possession of the shop as per the agreement as well as the possession of the shop was offered without obtaining the occupancy/completion certificate.
(4). BECAUSE the learned authority has passed the impugned order for refund only between 30.07.2018 to 20.09.2019 whereas the Respondent should be liable for compensation from 13.09.2015(date as per agreement) till actual possession of the shop.
(5). BECAUSE the Learned Authority has done injustice with the Appellant which is illegal in the eyes of law by overlooking the agreement that was signed between the parties and according to which the Respondent has received the sanction and has promised to handover the possession within 3 years i.e. 30.07.2015.
(6). BECAUSE the impugned judgment and order passed by Learned Authority is cryptic, illegal and manifestly erroneous and is liable to be set aside.
(7). BECAUSE Learned Authority has committed manifest error of law in not granting the reliefs as sought by the Appellant.
(8). BECAUSE the Learned RERA Authority has failed to consider the fact that the Appellant has asked for physical possession and compensation for delay along with the financial loss suffered because of the Respondent.
(9). BECAUSE the Learned RERA Authority has failed to consider the fact that as per Section 18 of Real Estate (Regulation and Development) Act 2016, the promoter is liable to pay for the delay made in handing over the possession as per the agreement.
(10). BECAUSE it was submitted by the Appellant that the respondent had approached the Learned RERA Authority not with clean hands by not disclosing true and correct facts and by misrepresenting material facts.
(11). BECAUSE it was submitted by the Appellant that the respondent has not made an offer of possession before filling the complaint and when the offer was made it was not with the occupancy certificate or occupancy certificate and thus there was a delay in handing over the physical possession of the shop.
(12). BECAUSE it was submitted by the Appellant that the Respondent after many reminders and requests was not able to provide the possession on time and thus liable for losses which the Appellant has suffered.
(13). BECAUSE it was submitted by the Appellant that the Respondent has cheated and misrepresented not only the appellant but also the Hon'ble Authority by registering its project under the RERA and hiding the fact that the Shop Buyer Agreement has been executed in the year 2012 while the Respondent has shown the original start date under the RERA as 21.01.2013.
(14). BECAUSE impugned order passed by the Learned RERA Authority is bad in law and was passed without following procedure of the Act therefore impugned order granting the delay penalty only from 30.07.2018 to 20.09.2019 is liable to be set-aside by this Hon'ble Tribunal in the interest of justice and appeal filed by the appellant is liable to be allowed. The Respondent is liable for delay penalty from 30.07.2015 till the actual possession along with the execution of sale deed as per section 17 of the Real Estate (Regulation & Development) Act, 2016.
(15). BECAUSE the Learned RERA 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 Real Estate (Regulation and Development) Act, 2016 and prevailing UPRERA Rules viz. 'The Uttar Pradesh Real Estate (Regulation and Development) Rules 2016.
# 4. The appellant has sought the following reliefs:-
(i) In the interest of justice, this Hon'ble Tribunal may be pleased to set aside the impugned Order of granting the delay penalty from 30.07.2018 to 20.09.2019 at the rate of MCLR+1%.
(ii) In the Interest of Justice, this Hon'ble Tribunal may order or direct the Respondent to pay the delay interest at the rate of 18% p.a as would have been charged by the respondent in case of delay from 30.07.2015(date as per agreement) till actual handing of the possession.
(iii) Issue an order or direction to the Respondent to hand over the immediate possession of the shop along with the execution of the sale deed as per section 17 of Real Estate (Regulation & Development) Act, 2016.
(iv) Issue an order or direction to the respondent to compensate the appellant, as per provisions under RERA Act, for the harassment, mental agony and financial loss suffered by the Complainant due to delay in possession of commercial shop by the Respondent.
# 5. Learned counsel for the respondent filed its objections denying the averments made by the applicant in the appeal and narrated the relevant facts involved in the present appeal as under:-
5.1 In clause 16 of the Builder-Buyer Agreement it is clearly mentioned “that the developer shall make endeavour to offer possession of complex within 36 months from the date of sanction of building plans by the authorities subject to force majeure circumstances and on receipt of complete payment”. Here the appellant is trying to mislead the Tribunal by falsely mentioning the stipulated time period of 36 months from the date of agreement. Whereas, as per clause 16 of the agreement, it is clear that the possession will be offered by the respondent within 36 months from the date of sanction of building plans by the authorities. The sanction was given on 30.07.2015 and thus the project was to be completed on or before 30.07.2018. The possession was offered on 30.09.2019. Hence the delay in offering possession is of around one year and two months which has also been held by the Regulatory Authority in their impugned order dated 10.02.2020. The claim of the appellant that the delay is of more than four years is absolutely frivolous and done to harass and arm twist the respondent for monetary gains and must be dismissed with cost in the interest of justice.
5.2 The appellant has defaulted in payment and even after many reminders, the appellant paid no attention whereas in clause of 10 of BBA, it is clearly mentioned that timely payment as and when demanded by the respondent is must, therefore, the appellant has clearly violated the terms of agreement. The default in making payment by the allottee is a compensatory in nature, under section 19 (6) of the Act 2016 wherein it is provided that allottee is under obligation to make payment as per terms and conditions of the agreement, further Section 19 (7) of the Act 2016 envisages levying of the interest for the period of delay in making payment to the builder. In the given case the appellant at one side has failed to fulfil its obligations of making payment in time and on the other side the appellant is misusing the process of law in order to arm twist the respondent for vested interests.
5.3 RERA is not retrospective in nature as alleged by the appellant in her averments. The booking was made in 2012 much before the commencement of U.P. Real Estate Regulatory Authority and in “Neelkamal Realtors Suburban Private Limited Vs Union of India” it has been specifically held that the provisions of RERA are not retrospective in nature.
5.4 The RERA came into force with effect from 01.05.2017 and thereafter on 04.08.2017 the project got registered under it. The respondent has produced all mandatory documents to get the project registered with RERA and the averments of the appellant in this respect are false and fabricated.
5.5 The delay in completion of the project occurred due to FSI signed with Ansal API where it was duty of Ansal to get the land use converted by the competent authority. Therefore, it was not in the hands of the respondent. Further the force majeure circumstances caused delay and were not in the control of the respondent.
5.6 The respondent has submitted that the BBA was signed with open eyes, by the own sweet will of the appellant and without any pressure from the respondent, hence wrongful quote of malafide intention of respondent and allegation of providing wrong information wilfully, are deliberately misleading and false, therefore, highly objected.
# 6. The appellant in her replication/rejoinder has denied the averments made by the respondent in his objections and reiterated/repeated her averments made in the memo of appeal.
# 7. Heard Sri Abhishek Khare, learned counsel for the appellant and Sri Saurabh Mishra, learned counsel for the respondent.
# 8. The appellant is only aggrieved by direction no. 2 of the impugned order dated 10.02.2020 passed by the Regulatory Authority whereby delay interest has been granted from 30.07.2018 (date of possession as per agreement) to 20.09.2019 (date of offer of possession) at the rate of MCLR+1% whereas, according to her, she is entitled to delay interest from 30.07.2015 till actual handing over of the possession of the unit, with interest at the rate of 18% per annum.
# 9. In order to examine the issue involved in the instant appeal and on the basis of pleadings on record as well as submissions of both sides, we deem it proper to frame the following questions:--
(1) Whether it is necessary and mandatory for the Promoter to have first Completion Certificate (C.C.) and Occupation Certificate (O.C.) under the provisions of the Act of 2016 and Rules of 2016, read with the U.P. Apartments (Promotion of Construction, Ownership and Maintenance) Act 2010 before offering possession as well as asking the allottee to settle the account and satisfy the final demand?
(2) Whether the appellant is entitled for interest for the delay in completion of the Project under the scheme of Act, 2016 and if yes, what rate of interest is required to be paid by the Promoter to the allottee?
# 10. Issue No. (1) is as to whether offer of possession can be given by a promoter without completion and occupation certificate or is it necessary and mandatory to obtain the same before offering possession and asking the allottee to settle the account and satisfy the final demand, under the scheme of Act & Rules 2016, read with U.P. Apartments Act 2010.
10.1 In order to appreciate the issue, we examine Section 2(q) and Section 2(zf) of the Act of 2016, which defines Completion & Occupancy Certificate, the same are extracted as follows:-
“Section 2:- Definitions - In this Act, unless the context otherwise requires,-
XXXX
“Section 2 (q) "completion certificate" means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws;”
“Section 2 (zf) "occupancy certificate" means the occupancy certificate, or such other certificate by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity;”
10.2 On examination of the provisions of Section 2 (q) and Section 2(zf), we find that completion certificate is basically a certificate issued by the competent authority certifying that the Real Estate Project has been developed according to the sanctioned plan, lay out plan and specifications, as approved by the competent authority under the local laws. On the other hand, the occupancy certificate is issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructure such as water, sanitation and electricity etc.
10.3 Similarly, Section 4(5) of the U.P. Apartments Act, 2010 prescribes for Completion Certificate, which reads as follows:-
“Section 4(5) 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-laws. The completion certificate shall be obtained by promoter from prescribed authority [within the period specified for completion of the project in the development permit or the building permit as the case may be]
Provided that if the construction work is not completed within the stipulated period, with the permission of the prescribed authority;
Provided further that if the completion certificate is not issued by the prescribed sanctioning authority within three months of submission of the application by the promoter complete with all certificates and other documents required, the same shall be deemed to have been issued after the expiry of three months.
Explanation: For the purposes of this sub-section "completion" means the completion of the construction works of a building as a whole or the completion of an independent block of such building, as the case may be.”
10.4 Section 4(5) of the U.P. Apartments Act 2010 clearly lays down that an apartment may be transferred by the Promoter to any person (allottee) only after obtaining the C.C. from the prescribed sanctioning authority concerned as per building by-laws. The C.C. is required to be obtained by the Promoter, meaning thereby that Allottee has no role to play in obtaining C.C. from the prescribed authority. A Promoter is required to first obtain C.C./O.C. from the prescribed authority, only thereafter register conveyance deed of the real estate in favour of the Allottee(s) and a legal & habitable possession can be offered to the Allottees.
10.5 The issue of offering handing over possession prior to obtaining occupancy certificate was also examined by the Hon’ble Supreme Court in Civil Appeal Nos. 1232 and 1443-1444 of 2019 R.V. Prasannakumaar and ors. Vs. Mantri Castles Pvt. Ltd. and ors.decided on 11.02.2019 wherein it has been observed that possession cannot be handed over prior to obtaining occupancy certificate.
10.6 In view of the aforesaid analysis, we are of the considered view that as per the provisions of the U.P. Apartments Act, 2010 read with the provisions of Act, 2016 a Promoter is required to offer legal and habitable possession to the allottees only after obtaining OC/CC and ask for clearing dues by raising final demand. In the instant case the offer of possession was given by the respondent to the appellant on 20.09.2019 without obtaining OC/CC. Issue no. (1) is answered accordingly.
# 11. Question No (2) relates to the entitlement of the appellant for the interest on account of delay in completion of the Project under the scheme of Act, 2016 and the rate of interest required to be paid by the Promoter to the allottee for delay.
11.1 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.
11.2 The Hon’ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. And others Vs. Union of India (2018)1 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 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".
11.3 Subsequently, in Wg. Cdr. Arifur Rahman Khan & Others Vs. DLF Southern Homes Pvt. Ltd., reported in (2020) SCC Online 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.
11.4 The Hon’ble Supreme Court, while dealing with the provisions of Section 18 of the Act, 2016, in the case of M/S Imperia Structures Ltd. Vs. Anil Patni and another, 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).
11.5 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.
11.6 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.
11.7 This Tribunal came 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 Vs. 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.........”
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.
11.8 It is important to mention herein that the Hon’ble Supreme Court in Civil Appeal No. 4910-4941/2019 DLF Homes Panchkula Pvt. Ltd. Versus D. S. Dhanda etc. etc. 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.”
11.9 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.
11.10 On the basis of aforesaid analysis we are of the considered view that the appellant is entitled to delay interest at the rate of MCLR+1% and not 18% as prayed for by her. Issue no. (2) is answered accordingly.
# 12. The appellant has sought delay interest from 30.07.2015. According to the appellant, as per Clause 16 of the Shop Buyer’s Agreement dated 13.09.2012, the respondent had to hand over physical possession of the shop within 36 months from the date of agreement i.e. on or before 13.09.2015. Clause 16 of the said agreement reads as under:--
“The developer shall make endeavour to offer possession of complex within 36 months from the date of sanction of building plans by the authorities subject to force majeure circumstances and receipt of complete payment.” The said clause 16 makes it crystal clear the respondent had to hand over possession of the shop within 36 months from the date of sanction of building plans by the authorities and not from the date of agreement as claimed by the appellant. The building plan was sanctioned by the authorities on 30.07.2015 and thus the possession of the shop in question was to be handed over by the respondent to the appellant by 30.07.2018, as rightly held by the Regulatory Authority. Thus the appellant is entitled to delay interest from 30.07.2018 till the date of actual possession along with OC/CC.
# 13. In view of the aforesaid analysis the appeal is partly allowed. The direction no. 2 of the impugned order dated 10.02.2020 is modified to the extent that the respondent is directed to pay delay interest @ MCLR+1% of SBI for the period from 30.07.2018 till the date of delivery of actual possession along with OC/CC. The amount of delay interest will be adjusted towards final payment and if the amount of interest exceeds the amount due, the excess amount shall be returned to the complainant/appellant.
# 14. No order as to costs.
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