REAT Mumbai (2024.09.09) in Malkeet Singh G. Matharu HUF Vs. Mount Mary Builders and Anr. [(2024) ibclaw.in 136 REAT, Appeal No. AT00600000063797/22 in Complaint No. CC006000000196424] held that;
When a claim is raised in respect of a real estate project by a flat purchaser, all promoters become jointly liable qua that flat purchasers, irrespective of whether there is privity of contract with each of the promoters or not. This is the scheme of RERA and mere absence of privity of contract with a particular promoter does not relieve such promoter in respect of the liabilities under RERA".
In the absence of formal agreement executed by the parties, the date of possession can be deciphered from any documents such as allotment letter, brochure, pamphlet, email communication, etc
That if the date of possession is not mentioned in the agreement, the Promoter is expected to handover the possession of the unit within a reasonable time and the period of three years held to be reasonable time.
We are of the view that mere non-execution of the 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 application form/ formal letter/ allotment letter/ letter of intent/ correspondence, etc. capable of being construed as an agreement,
However, since the Appellant has not sought relief of compensation in the complaints, the same cannot be granted in the Appeals
Excerpts of the Order;
1). The captioned Appeals arise from common Order dated 22.02.2022 passed by learned Member I, MahaRERA (for short "the Authority') in Complaint Nos.CC006000000t96427 and CC0060000000L96424 whereby the Authority directed Respondent No.1 to execute and register agreements for sale with Appellant as per provisions of Section 13 of RERA Act, 2016 (for short "RERA') within a period of 30 days, failing which the monies paid by the Appellant to be refunded without interest within the period of next three months.
2). Respondent No.1 is a sole proprietorship concern and is involved in real estate business and is the promoter of a project named "Green World" situated at Airoli, district Thane (for short "the said Project), Respondent No.2 is incorporated under the provisions of the Companies Act, 1956 and is involved in business of real estate and Co-Promoter of the said project vide a joint venture agreement dated 15.04.2010 registered between them at the Sub-Registrar of Assurances at Thane. By the joint venture agreement dated 15.04.2010 executed between the Respondents, Respondent No.1 has assigned, transferred and assured to Respondent No,2, the development rights in respect of the said project. The Respondents have jointly launched the said project.
3). For the sake of convenience, parties to the Appeals hereinafter will be referred to as "Appellant/Complainant" and "Respondents/Promoters" respectively. Since the captioned Appeals arise out of the same Order having identical facts, relief sought and law points involved and parties are the same, therefore, these Appeals are disposed of by this common judgment.
4). The brief facts gathered from the pleadings, documents on record, and impugned Order are that flats bearing no,1301 and 1302 admeasuring 913 sq. ft, carpet area each on 13th floor in F Wing of the said project have been booked by Mr. Malkeet Slngh Gulzar Singh Matharu for a total consideration of Rs.90,51,625 leach. At the time of booking, an amount of Rs.5,00,000/- each was paid to the Promoter/ Respondent No.1. Subsequently, the Promoter/ Respondent No.1 issued allotment letters dated 22.09.2014 and 23.09.2014 for the respective flats. At the time of booking, Promoter/ Respondents No 1 promised possession of the said flats in 2016. The Promoter/ Respondent No.1 has received total amount of Rs.65,20,791/- and Rs.64,05,887/- for the respective flats as per the demand letters raised by Respondent No.1. Mr. Malkeet Singh Gulzar Singh Matharu expired on 25.10.2016 and Karta rights automatically devolved upon his son Mr. Kunvarjit Singh Malkeet Singh Matharu, who is the Appellant in both the Appeals.
5). The said project came to be registered with MahaRERA on 06.08.2017 with proposed date of completion of the said project as 31.12.2019. The Appellant/complainant by an email dated 05.10,2019 asked the Respondents/ Promoters for status of balance payment and Information on allotment of the said flats in the name of the Appellant. The Appellant on 27.01.2020 through his Advocate called upon the Respondent No.1/ Promoter to allot the said flats in the name of Appellant. The Appellant on 16.02.2020 through a legal notice by his Advocate called upon both the Respondents/ Promoters to allot the said flats. The Respondent No.1/ Promoter never replied to the said notice. Respondent No 2/ promoter replied to the said notice on 23.02.2021 denying the allotment by citing a reason that there is no privity of contract between the parties. After repeated efforts to call upon the Respondents to update him on the status of the project and to execute agreement for sale in respect of the subject flats, there was no response from Respondent No.1 and Respondent No.2 denied the allotment citing a reason that there is no privity of contract with the Appellant.
6). Distressed by the Respondents Action and inaction namely failure to execute agreement for sale for said flats and failure to handover possession of the said flats, the Appellant filed separate Complaints for the subject flats bearing numbers CC006000000196427 and CC0060000000196424 on 18.03.2021 before the Authority and sought relief of
(i) direction to the Respondents to execute and register agreements for sale as per provisions of Section 13 of RERA in respect of the subject flats,
(ii) direction to Respondents to handover possession of the subject flats with Occupation Certificate,
(iii) direction to Respondents to jointly and severally refund the entire amount of Rs.65,20,791/- and Rs.64,05 ,BB7l- paid by the Appellant for the subject flats along with interest.
7). The Appellant/ Complainant was heard by the Authority and passed the impugned Order dated 22.02.2022. The Authority in the said impugned Order has observed that both the parties have been lssued notice for the hearing and they are directed to file their respective written submissions. Accordingly, the Complainant appeared through his Advocate and made the submissions. However, the Respondents even though have been duly issued notices on several occasions, they have neither appeared nor filed any reply on the record of MahaRERA. It therefore shows that the Respondents are not willing to contest the claims of the Complainant. Thereafter, Respondent No.2 filed an application on 28.06.2021 and prayed to delete his name on the ground that the Complainant has purchased the said flats from Respondent No.1. The Complainant opposed the application on the ground that both Respondents are jointly responsible in view of the joint venture agreement dated 15.04.2010 between them, whereby the Respondent No.1 has transferred/ assigned its development rights to Respondent No.2, Therefore, both the Respondents are jointly and severally liable for the project. The Authority observed that Respondent Nos.1 and 2 are Co-Promoters having area sharing' arrangements in the said project, Although both the Respondents are Promoters of the said project, they have the right to sell flats from their own shares. Respondent No.2 is not responsible for any allotment made by Respondent No.1 from its own share and therefore Respondent No.2 is not a necessary party and directed to delete the name of Respondent No.2 by his Order dated 04.10.2018. Further, the Authority rejected the claim of the Complainant of interest for delayed possession under Section 18 of RERA on the ground that Respondent No.1 has not agreed to any specific date for handing over possession of the subject flats in the allotment letters and there is no registered agreement for sale signed by both the parties indicating any agreed date of possession. The Authority directed Respondent No.1 to execute and register the agreement for sale for the subject flats as per provisions of Section 13 of RERA within the period of 30 days, failing which, the monies paid by the Complainant be refunded without any interest within the period of next 3 months.
8). Aggrieved by the impugned Order dated 22.02.2022, the Appellant has filed the captioned Appeals separately for each of the subject flats i,e, 1301 and 1302 and challenged the impugned Order on the following grounds:
(i) the learned Authority failed to appreciate that by virtue of the agreement dated 15.04.2010 entered between the Respondents, which is a joint venture agreement, Respondent responsible to allot the subject flats in the name of the Appellant and execute and register the agreement for sale for the subject flats,
(ii) the learned Authority come to an erroneous conclusion that there is 'area sharing' arrangement between Respondent No.1 and Respondent No.2 and pursuant to which the Respondent No.2 is not responsible for any allotment made by Respondent No. 1 from its own share.
(iii) the learned Authority failed to appreciate that on 04.12.2017 MahaRERA had issued Circular brining maximum transparency, awareness and removal of doubts of word "co promoter" and that there is no difference made out between the landowner promoter and/ or and investor Promoter and that they shall be jointly liable for the functions and responsibilities specified under RERA in the same manner as the Promoter who obtains building permissions and carries out construction.
(iv) the learned Authority failed to appreciate that by virtue of joint venture, both the Respondents must comply with the terms of the contract, and they will be jointly and severally liable for any breach of the terms and conditions of the contract. Hence, Respondent No.2 cannot escape the responsibility of allotment made by Respondent No.1. (v) the learned Authority erroneously concluded that there is no joint liability between Respondent Nos.1 and 2 when admittedly Respondent No.2 has neither appeared nor filed any reply to the Complaint. This being the admitted position, the doctrine of non-traverse as laid down under Order VIII Rule 5 of the Code of Civil Procedure fairly and squarely applies to the facts of this case. The learned Authority erred in holding that on the webpage information uploaded by Respondent No.2 while registering the project with MahaRERA, the name of Respondent No.1 appears to be shown as Co-Promoter having area sharing arrangement in the project, thereby drawing the conclusion that Respondent Nos. 1 and 2 have rights to sale the flat from their own share.
(vi) the learned Authority failed to appreciate that the Respondents have neither appeared nor filed any such agreement at the time of hearings claiming its stance on area sharing. The learned Authority failed to take into consideration the letters of allotment and the correspondence shared between the parties thereafter.
(vii) the learned Authority erred in holding that Respondent No.2 is not a necessary party in the Complaints filed by Appellant and SINCE Respondent Nos.l and 2 were CoPromoters, both had the right to sale the flat from their own share.
(viii) the learned Authority overlooked the fact that Appellant had prayed for directions that the Respondents not only execute the registered agreement for sale but also hand over possession of the flat. The learned Authority while granting the prayer for execution and registering the agreement for sale by , Respondent No.1 did not grant any relief of handing over the possession to the Appellant,
(ix) the learned Authority failed to appreciate that rights accrued upon Allottees once the terms of allotment are recorded in letter of allotment or otherwise agreed between the parties, is deemed to be certain and concluded contract, and that such rights cannot be scuttled merely by the absence of agreement for sale.
(x) the learned Authority failed to appreciate that there is binding agreement between the parties in terms of the letters of allotment and emails. Further, since the parties have acted in furtherance of the said documents which is evident from the fact that the Respondents have accepted the payment in respect of the subject flats.
(xi) the learned Authority has failed to correctly apply the provisions of RERA by erroneously interpreting Section 18 of the Act to read that relief under the said provision depends upon factum of execution of agreement for sale. The learned Authority has failed to consider that the Respondents are in breach of Section 4 of MOFA which casts an obligation upon the Respondents to enter into written agreement for sale and register the same before accepting any money as advance payment or deposit above 20% of the purchase price. Furthermore, the learned Authority has failed to consider that under Section 13 of RERA, the Respondents were obligated to execute and register the agreement for sale before accepting any payment more than l0% of the sale consideration.
(xii) The Appellant has always made timely payment of the sale consideration of the subject flats and acted based on agreement between the parties in terms of the allotment letters. Accordingly, the impugned Order, to the extent it denies compensation for the delay in handover of the possession, suffers from material infirmity and therefore ought to be set aside.
9). On the abovementioned grounds, the Appellant has sought the following relief in the Appeals.
(i) Direction of quashing and setting aside the impugned Order, thereby directing the Respondents to jointly and severally handover the possession of the subject flats with Occupation Certificate to the Appellant.
(ii) Direction that the Respondents to duly execute and register the agreement for sale,
(iii) Direction to refund the entire amount of Rs.65,20,791/- and 64,05,8871- paid by the Appellant towards the consideration of the subject flats along with the interest.
(iv) Direction to Respondents to jointly and severally pay to the Appellant compensation for the delay In handing over the possession of the subject flats as per provisions of Section 18 of RERA.
10). We have heard learned Advocate Mr. Mayur Patel for Appellant and Advocate Ms. Jayshree Gilra for Respondent No,1.
11). The submissions advanced by learned Advocate for Appellant are nothing but reiteration of the contents of the memorandum of appeal and written arguments. The learned Advocate has submitted that the Appellant is a Hindu Undivided Family represented by its Karta Mr. Kunvarjit Singh Malkeet Singh Matharu and Appellant is an allottee as per Section 2(d) of RERA. The appellant is legal heir of the original Karta Mr. Malkeet Singh Gulzar Singh Mathura who expired on 25.10.2016 and in whose name the allotment letters were issued by the Respondent No.1. Learned Advocate submitted that in spite of email correspondence dated 05.12.2019 addressed to Respondent No.1 and legal notice served on Respondent Nos. 1 and 2 asking for allotment of the subject flats, Respondent no. 1 never responded to the said email and notice. Respondent No.2, however, replied to the notice and denied its liability to allot the subject flats citing the reason that there was no privity of contract with the Appellant, Learned Advocate further submitted that the captioned Complaints were heard by the Authority where none of the Respondents appeared, no written or oral arguments were submitted by either of the Respondents. Learned Advocate submitted that there was binding agreement between the parties in terms of letters of allotment dated 22.09.2014 and 23.09.2014 and further email correspondence in furtherance of the said documents, Further, the Respondents have accepted the payments in respect of the subject flats. Despite payment of substantial amounts towards consideration of the subject flats, the Respondents failed to execute and register the agreement for sale for the subject flats in violation of Section 4 of MOFA as well as Section 13 of RERA. Learned Advocate further submitted that the Appellant is entitled to seek relief of interest for delayed possession as well as handover of possession of the said flats, Section 18 of RERA does not distinguish between the agreement for sale and letter of allotment when the question of payment of interest is to be determined. Consequently, the Appellant has right under Section 18 of RERA to receive interest on account of Respondents'failure to handover the possession of the subject flats in terms of allotment letter and oral promise by the Respondents that the possession will be handed over by 2016.
12). With these submissions the Appellant prayed for allowing the Appeals. Since the Appellant has sought both the reliefs of seeking interest on account of delay in possession as well as refund of the amount paid to the Promoters with interest, both of which cannot be considered at the same time, therefore the Appellant during the proceedings before this Tribunal pressed for relief of refund with interest as well as compensation and waived the relief of execution of agreement for sale, handover of possession of the subject flats and interest on account of delay in possession. Advocate for Appellant has placed reliance on the following citations.
i, Fortune Infrastructure (Now known as Hicon Infrastructure... Vs. Trevor D'lima & Ors.) [2018 (5) SCC 442
ii Experion Developers Pvt. Ltd. Vs. Sushma Ashok Shiroor 12022 (t5) SCC 2861
iii, Wadhwa Group Housing Private Limited Vs. Mr. Vijay Choksi and SSS Escatics Private Limited 2024:BHCAS:931
iv. Mrs. Amrita Kaur & Ors. Vs. East & West Builders Appeal No,4T0060000000 10997
13). It is pertinent to note that Respondent No.1 did not appear before the Authority despite several chances, nor filed any written submissions or reply to the Complaint. Further, Respondent No,2 did not file any reply or written submissions. However, Respondent No,2 only submitted an application before the Authority for deletion of its name, which was decided by the Authority ex-parte. From the proceedings of this Tribunal, it transpires that Appeals have been proceed ex-parte against the Respondent No.2. Despite ample opportunities, Respondent No.1 has not filed a reply to the Appeals and hence the Appeals have been proceeded without reply of Respondent No,1, We have heard Advocate Jayshree Girla l/b Adv. Sanjay Chaturvedi for Respondent No.1. Learned Advocate submitted that the Appeals are not maintainable and prayed for dismissal of the Appeals.
t4). After having considered submissions of the respective parties, supported by various documents on record, following points that arise for our consideration and finding thereon for the reasons to follow are as under:
REASONS
Point No 1
15). On ensembling the facts submitted above by the parties, it is not in dispute that subject flats bearing no.1301 and 1302 were booked in the name of Mr. Malkeet Singh Gulzar Singh Matharu for consideration of Rs.90,51,625/- each. It is also not in dispute that Respondent No.1 issued allotment letters on 22.09.2014 and 23.09.2014 for the respective flats to Mr. Malkeet Singh Gulzar received the payment of the amount of Rs,65,20,7911- and 64,05,8871- for the respective flats as per the demand letter issued by Respondent No.1. Mr. Malkeet Singh Gulzar Singh Matharu expired on 25.10.2016 and his son Kunwarjeet Singh Malkeet Slngh Matharu became karta of the family and being legal heir has filed the captioned Complaints and these Appeals. The subject project also registered wlth MahaRERA on 06.08.2017 with proposed date of completion of the project as 31.12.2019. is It is also on record that by email dated 05,12.2019 the Appellant had asked for status of balance payment and information on allotment of subject flats to Respondent No.1 and Respondent No,2. Further, the Appellant also served legal notice through his Advocate on 17.01.2020 calling upon Respondent No.2 to allot the subject flats. Appellant also served the legal notlce upon both Respondent Nos.1 and 2 on well as the legal notices were never responded to by Respondent No.1. However, Respondent No,2 replied to the notice on 23.02.2021 denying the allotment citing the reason that there is no privity of contract with the Appellant since allotment letters have been issued by Respondent No.1 and payment have been also received by Respondent No.1. Thus, despite substantial payment failed to execute and register the agreement for sale and handover possession of the subject flats in terms of allotment letters. Although the Appellant has sought relief of execution of agreement for sale, handover possession of the subject flats to Appellant, relief of interest on account of the delayed possession, the Appellant during the course of the proceedings in this Tribunal stuck to the prayers of relief of refund of the amount paid to the Respondents along with interest and compensation and gave up claims on other reliefs namely execution of agreement for sale, handover possession of the subject flats to Appellant, relief of Interest on the delayed possession.
16) In the Complaint proceedings, Respondent No.2 had filed an application to delete his name from the Complaint on the ground that there is no privity of contract between Respondent No.2 and Appellant. While responding to the notice from the Appellant dated 23.02.2021, the Respondent No.2 has mentioned that the subject flats was booked by the Appellant which comes under the share of Respondent No.1 and consideration amount has been paid by Appellant to Respondent No.1. Therefore, there is no privity of contract, and Respondent No.2 has not received any consideration amount from the Appellant and hence Respondent No.2 shall not be held liable for any action mentioned in the notice. Therefore, the moot question for our determination is whether Respondent Nos.1 and 2 are jointly and severally liable to discharge the obligations of the Promoter under RERA Act, 2016.
17) Section 4 of MOFA casts an obligation on the Promoters that they shall not accept sum of money as advance part price without entering into written agreement for sale and the agreement shall be registered under the Registration Act, 1908. Section 13 of RERA also casts a similar obligation on the part of Promoters that they shall not accept sum more than 10% of the purchase price from Allottee without first entering Into written agreement for sale and register the said agreement for sale. It is not in dispute that out of total consideration of Rs.90,51,6251- for each of the subject flats, the Respondent No.1 has received the payment of Rs.65,20,791l- and 64,05,8871- for the respective flats as per demand letter raised by Respondent No.1. Therefore, the Respondent No.1 has received more than 20% in case of provision of MOFA and 10% in case of provisions of RERA without executing and registering the agreements for sale. Therefore, Respondents/Promoters have violated the provisions of Section 4 of MOFA and Section 13 of RERA. The allotment letters also reveal that there is no specific date of possession mentioned. As per Section 4(1A)(aX)(ii) of MOFA, the Promoter is obligated to mention the date by which the possession of the flat is to be handed over to the purchaser. In view of this, there is also a violation of the said provision by the Respondents/Promoters on this count,
18). The Respondents by virtue of joint venture agreement are Promoter and Co-Promoter of the subject project. In the MahaRERA website, for the subject project Respondent No.1 has been shown as Promoter and Respondent No.2 as Co-Promoter. Therefore, the Respondents are Promoters within the meaning of definition of Promoter as contemplated under Section 2(zk) ot RERA Act, 2016,
19). While deliberating on the liability of the Promoters under RERA, it has been held by the Hon'ble Bombay High Court in Second Appeal (stamp) No. 21842 ot 2023 Wadhwa Group Housing Private Ltd. V/s. 1. Mr. Vijay Choksi 2. SSS Escatics Pvt. Ltd. That:
"17. The project 'The Nest’ has been registered as an ongoing project under Section 3 of RERA Act. To decide liability of Appellant to refund amount paid for purchase of flat in the real estate project, it would be necessary to determine whether Appellant falls in the definition of the term 'promoter'. Section 2(zk) of RERA defines the term "Promoter" thus:
(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;
(ii)or a person who develops land into a project, whether or not the person also constructs structures or 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;
(b) plots owned by such authority or body or placed at their disposal by the Government;
(c) 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, colonizer, 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 pub/ic.
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 person who sells apartments or plots are different personal 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;
Thus, definition of the term "Promoter" under Section 2(zk) of RERA is wide enough to include every person who is associated with construction of the building such as builder, colonizer, contractor, developer, estate developer or by any other name or even the one who claims to be acting as the holder of a power of attorney from the owner of the land. One of the principal objectives of RERA is to bring transparency in real estate sector and to protect the interests of the consumers in the real estate project. The term 'Promoter Has been so widely defined that it virtually includes every person associated with construction of the building. Thus, even a person who is merely an investor in the project along with the promoter and who is entitled to benefit in the real estate project is also covered by definition of the term 'Promoter'. In the present case, I need not delve deeper into the enquiry as to whether Appellant is covered by the expression ,promoter, or not. While registering the project as ongoing project under Section 3 of the RERA, Appellant's name has been included in the list of promoters. Therefore, Appellant cannot run away from the fact that it is the promoter in respect of the project 'The Nest'. Explanation to Section 2(zk) makes ail persons who construct or convert building into apartments or develop a plot for sale, as well as a person who sells apartments or plots to be promoters making them jointly liable as such for the functions and responsibilities specified under the Act or the Rules and Regulations made thereunder. Thus, a person who does not actually construct or causes to be constructed a building but merely takes part in the joint venture and sells flats, becomes a Promoter. Appellant admits that it is entitled to a share in the joint venture in the constructed area, which it is entitled to sell. Thus, the Appellant is entitled to sell flats in the project and accept consideration for such sale. There is therefore no doubt to the position that, both Appellant as we// as the second Respondent are promoters and are jointly liable in respect of the responsibilities under the RERA and Rules and Regulations made thereunder.
18. In my view therefore, mere falling of ftat in the share of the second Respondent under the loint Development Agreement, would not excuse the Appellant from the responsibilities and liabilities under the RERA, Rules and Regulations made thereunder qua that flat. RERA does not demarcate or restrict liabilities of different promoters in different areas. The liability is joint for all purposes under the Act Rules and Regulations.
19. Circular dated 4 December 2017, on which reliance is placed on behalf of the Appellant, far from assisting it, actually militates against the Appellant. The Circular is issued with a view to tackle a situation where several developers had entered into agreements with individuals/organizations like land owners or investors by which such individuals/organizations were also entitled to share in the total revenue generated out of sale of apartments. It was observed that such individuals/ organizations were not included in the online registration with MahaRERA. With a view to ensure their inclusion in the online registration with, the Circular dated 4 December 2017 is issued. Relevant part of the Circular reads thus:
Whereas, during the online registration process, especially for ongoing projects, it was observed that several developers (who actually obtain building permissions and construct) of the real estate project, have entered into arrangement with individuals/organizations like land owners or investors, by which the said Individuals/organizations are entitled to a share of the total revenue generated from sale of apartments or share of the total area developed for sale which are also marketed and / or sold by such individuals/organizations.
Whereas, a careful consideration of the aforesaid definition in the light of the true object and purpose of the said Act leaves no manner of doubt that such individuals/organizations are also covered and clearly fall within the aforesaid definition of the term 'Promoter And as such are Promoters within the meaning of the said terms for the purpose and for the implementation of the said Act and all the rules framed thereunder. They are therefore jointly liable for the functions and responsibilities specified in the Act in the same manner as the Promoter who actually obtains building permissions and carries out construction.
Whereas, for the ease of filing online registration application and for the benefit of the consumers it is necessary to distinguish and / or identify whether such Promoter is the land owner, investor or is actually obtaining the building permissions for carrying out the construction and is in fact carrying out construction.
Therefore, it is directed that
(1) Such individuals/ organizations who fall within the aforesaid definition of the term 'Promoter' on account of being landowners or investors, shall be specified as such,, at the time of online registration With MahaRERA.
(2) Though liabilities of such landowner Promoter or investor Promoter shall be as co-terminus with the written agreement / arrangement governing their rights in the real estate prolect, for the purpose of withdrawal from the designated bank account of a real estate project, the obligations and liabilities of all such Promoters shall be at par with each other.
(3) A copy of the written agreement or arrangement between Promoters (whether landowner or investor) which clearly specifies and details the rights and shares of each Promoter, should be uploaded on the MahaRERA website, along with other details for public viewing.
(4) Such landowner Promoter and investor Promoter should also submit declaration in Form B of Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agent, rates of Interest and Disclosures on website) Rules, 2017.
(5) Further each such landowner Promoter or investor Promoter, who is entitled to a share of the total area developed, should also open separate bank account for deposit of 70% of the sale proceeds realized from the allottees of their share.
20. Thus, the Circular dated 4 December 2017 also makes it abundantly clear that even the entities who are entitled to share in the revenue generated from sale of flats are jointly responsible/liable for functions and responsibilities specified under the Act as if they are Promoters themselves. "
20). Therefore, we are of the view that Respondent No.1 and Respondent No.2 being Promoters are equally liable for functions and responsibilities specified under RERA Act, 2016 and hence they are jointly and severally liable for discharging their liabilities under section 18 of RERA.
21). With regard to absence of privity of contract between the Appellant and Respondent No.2 is concerned, the Hon'ble Bombay High Court in Second Appeal (stamp) No. 2t842 of 2023 Wadhwa Group Housing Private Ltd. V/s. 1. Mr. Vijay Choksi 2. SSS Escatics Pvt. Ltd has held that:
"24. The Appellant's contention about absence of privity of contract between it and the Complainant is tota//y misplaced. Definition of the term 'promoter' under Section 2(zk) ot the RERA would indicate that even persons/entities with whom a flat purchaser does not enter into contract are also covered by definition of the term 'promoter. Therefore, it is not necessary that there has to be an agreement between every Promoter and the flat purchaser. As observed above, it is a matter of indoor management between the promoters and the flat purchaser who is not supposed to know the intricacies of the arrangements made between several promoters amongst themselves. When a claim is raised in respect of a real estate project by a flat purchaser, all promoters become jointly liable qua that flat purchasers, irrespective of whether there is privity of contract with each of the promoters or not. This is the scheme of RERA and mere absence of privity of contract with a particular promoter does not relieve such promoter in respect of the liabilities under RERA".
22). Therefore, from the dictum and ratio laid down in above judgment by Hon'ble High Court, we are of the view that Respondent No.2 cannot escape its liability or obligation as Promoter under the provisions of RERA and hence Respondent Nos.1 and 2 are jointly and severally liable in respect of the responsibilities and liabilities under the RERA and Rules and Regulations made thereunder. We, therefore, answer point number 1 accordingly.
Point No.2
23). It is pertinent to note that the allotment letters issued by Respondent No.1 do not disclose date of possession although they reveal all the necessary ingredients of a contract such as total consideration, payment schedule and other terms and conditions. In the absence of formal agreement executed by the parties, the date of possession can be deciphered from any documents such as allotment letter, brochure, pamphlet, email communication, etc. In this case, the allotment letters are the only documents available, which however do not disclose the agreed date of possession. In the case of Fortune Infrastructure (Now Known as M/s Hicon Infrastructure) & Anr. Vs. Trevor D'Lima & Ors. [(2018) 5 SCR 273] the Hon'ble Apex Court has held that if the date of possession is not mentioned in the agreement, the Promoter is expected to handover the possession of the unit within a reasonable time and the period of three years held to be reasonable time. In the instant case, the Appellant has booked the subject flats on 22.09.2014 and 23.09.2014 respectively. Therefore, we conclude that the date of possession would be on or before 22.09.2017 and 23.09.2017 respectively for the subject flats.
24). It is worthy to note that it is not in dispute that the Respondents have failed to handover possession of the subject flats to the Appellant by the date of possession as mentioned above. There is no material on record to show that the Appellant is responsible for the delay in completing the subject project. The ratio laid down by the Hon'ble Supreme Court in M/s. Imperia Structures Ltd. Vs. Anil Patni & Ors. [in Civil Appeal No.3581- 3590 of 20201 is that-
" In terms of Section 18 of the RERA Act, if a promoter falls 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 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(l) or under proviso to Section 1B(1)."
25). 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 18(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 this 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/Tribunal, which is in either way not attributable to the allottee/home buyer, the promoter is 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 Act 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 de/ay till handing over possession at the rate prescribed.
26). In the light of the discussion above, we are of the view that mere non-execution of the 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 application form/ formal letter/ allotment letter/ letter of intent/ correspondence, etc. capable of being construed as an agreement, Admittedly, the subject project is an ongoing project. As per the view taken by this Tribunal in catena of cases, provisions of RERA are applicable to this project. Accordingly, the allotment letters issued by the Respondents to the Appellant prior to RERA are enforceable under Section 18 of RERA.
27). Section 18 of the Act spells out the consequences that, if Promoter fails to complete or is unable to give possession of an apartment by the dates specified in the agreement for sale, the Allottee holds an unqualified right to seek refund of the amount with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided in RERA. We have already observed that the Promoter has violated the provisions of Section 4 of MOFA and Section 13 of RERA by not executing and registering agreements for sale for the subject flats even after having received more than 20?% of the sale price. Therefore, we are of the view that the Appellant is entitled to seek relief of refund with interest under Section 18 of RERA. However, since the Appellant has not sought relief of compensation in the complaints, the same cannot be granted in the Appeals. As both the Respondents are jointly and severally liable to discharge their obligations as Promoters under RERA, we hold that Respondent Nos.1 and 2 are jointly and severally liable to refund the amount paid by the Appellant in respect of the subject flats along with interest under Section 18 of RERA. Accordingly, we answer Point No.2 in the affirmative.
Point No.3
28). While passing the impugned Order, the Authority has observed that Respondent No.2 is not responsible for any allotment made by Respondent No.1 on the ground that there is no privity of contract between Appellant and Respondent No. 2 and therefore Respondent No.2 is not a necessary party and directed to delete the name of Respondent No.2 by its Order dated 04.10.2018. Further, the Authority rejected the claim of the Complainant under Section 18 of RERA on the ground that Respondent No.1 has not agreed to any specific date for handing over possession of the subject flats in the allotment letters and there is no registered agreement for sale signed by both the parties indicating any agreed date of possession. From the discussion and observations hereinabove, the view taken by the Authority is contrary to the provisions of RERA and also to the ratio laid down by Hon'ble Apex Court as mentioned above. Thus, the same is found unsustainable in the eyes of law and hence calls for interference in these Appeals' We therefore answer Point No.3 in the affirmative. Consequently, we proceed to pass the following Order.
ORDER
(i) Appeal Nos.AT006000000063797 and AT006000000063798 are partly allowed with the following directions.
a. The impugned Order dated 22.02.2022 passed in Complaints Nos.CC006000000196424 and CC006000000196427 is set aside.
b, The Respondent Nos.1 and 2 are directed to refund jointly and severally the amount of Rs.65,20,791l- and Rs.64,05,887/- paid by the Appellants to the Respondent No,1 towards consideration of the subject flats together with interest on the paid amounts as per SBI's highest Marginal Cost Lending Rate (MCLR) plus 2% from the date of payments within 30 days from the date of this order, failing which the Respondents shall also pay interest at this prescribed rate on the total amount due and outstanding as on 19th October 2024 till its realization.
c. Parties shall bear their own costs.
d. Copy of this Order be communicated to the Authority and the respective parties as per Section 44(4) ot RERA, 2016.
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