Manjushree Ray Vs. Secy. ORERA and Anr - The award of compound interest which is dehors of rules, in those cases cannot be treated as precedent and any decision on that score cannot be cited as precedent in other cases, particularly when the higher forum has already discarded the decision of awarding of compound interest.

 O-REAT (2025.05.16) in Manjushree Ray Vs. Secy. ORERA and Anr. [O-REAT Appeal No.75/2023] held that.-  

• “we would hasten to observe that the respondent is being allowed to retain the sum of money already received by her only because of peculiar circumstances of this case and else, this relaxation for the respondent is in no manner to be read as approval of the orders impugned or approval of the proposition of awarding compound interest in these matters. As said and iterated hereinbefore, such a proposition of awarding compound interest in these matters by the Fora exercising jurisdiction under the Act of 1986 stands disapproved.”

• The award of compound interest which is dehors of rules, in those cases cannot be treated as precedent and any decision on that score cannot be cited as precedent in other cases, particularly when the higher forum has already discarded the decision of awarding of compound interest.

• In various appeals this Tribunal has also discarded the order of compound interest awarded by the learned Authority in favour of the allottees and direction has been given for payment of simple interest.

Excerpts of the Order;

OREAT Appeal No.75/2023 24) 16.05.2025 The appeal is taken up through hybrid mode. 

2) We have already heard Mr.S.K.Parida, learned counsel appearing for the appellant, Mr. B.Nayak, advocate appearing on behalf of Mr. P.S.Nayak, learned counsel for the respondent no.1-Regulatory Authority and Mr. D.Nanda, learned counsel appearing for the respondent no.2. 

3) The appellant has challenged order dtd. 28.3.2023, passed by the Odisha Real Estate Regulatory Authority in Complaint Case No.143/2022 praying inter alia to set aside the said order and for direction to the respondent to pay a sum of Rs.2,59,000/- with 9.50% interest compound quarterly per annum from 16.4.2011 till the date of payment to the appellant. The appellant of the appeal was the complainant in the complaint case, the respondent no.2 of the appeal was the respondent in the complaint case and the respondent no.1 of the appeal was the learned Regulatory Authority who has passed the impugned order. 

4) The brief facts and circumstances leading to the filing of the present appeal are as follows : The respondent no.2 invited applications from the interested buyers for purchase of lands situated in mouza-Siula, Chaka, Matiapada, Ekchalia, Kairi under the project name ‘Bhagya Nagar’ Plotted Scheme, pursuant to which the appellant agreed to purchase eight plots i.e. Plot No.5537, 5538,5539,5540,5541,5542, 6172 and 6173 total measuring an area of 9600 sq. ft. The sale price of each plot was fixed at Rs.50,000/- with membership charges of Rs.250/-. As a token of booking amount, the appellant had deposited a sum of Rs.20,000/- on 20.3.2008 and Rs.30,000/- on 3.11.2008. Thereafter, agreements were executed between the respondent no.2 and the appellant on 16.3.2008 stipulating that the appellant has to pay Rs.700/- per month for each plot within 60 months and Rs.4000/- to be paid at the time of registration. In obedience to the said agreement, the appellant has deposited a sum of total Rs.2,59,000/- in phased manner from 20.3.2008 to 15.4.2011. On 4.8.2010 the respondent no.2-promoter informed the appellant to refund the deposited amount as the I.T. Department instructed the DSR Khordha not to make any registration or sale deed in respect of Bhagya Nagar Project. But the appellant failed to receive the amount which she had paid to the respondent as a result of which she filed the complaint case No. 142 of 2022 praying to direct the respondent-promoter to refund Rs.2,59,000/- with penal interest. 

5) Objection to the complaint has been filed by the respondent inter alia stating therein that the appellant is the depositor in Bhagyanagar Project and she had booked eight plots and the sale price of each plot was fixed at Rs.50,000/-. But while the matter stood thus, the Director of respondent-promoter was taken into custody in a criminal case vide PS case No.11 dtd.23.12.2012 (Criminal Branch, EOW, Bhubaneswar) for the offences u/s 120-B,420,506,34 of IPC. The prayer for his bail was rejected by the SDJM, Bhubaneswar so also the Hon’ble High Court of Orissa. Lastly, the respondent-promoter was released on bail by the Hon’ble Apex Court on deposit of Rs.63,55,49,227/- which amount was subsequently transferred to the Designated Court at Cuttack. The appellant is also the informant in GR case No.473/2012 and CT case No.23/2015 pending before the court of Presiding Officer, OPID Court, Cuttack. The competent authority has already notified requesting the depositors to come forward with their claim to receive the payment. But the appellant instead of approaching the OPID Court has approached the learned Authority claiming Rs.2,59,000/- with penal interest. Hence, it is prayed to dismiss the complaint with cost. 

6) From the pleadings of the parties, the learned Authority has framed the following five points for adjudication of the complaint: i)Whether the case is maintainable in law? ii)Whether the complainant has cause of action to file this case? iii)Whether the amount collected by the respondent in respect of five projects including the disputed project has been deposited before the Registry of the Hon’ble Supreme Court and transferred to OPID Court for distribution amongst the allottees? iv)Whether the Respondent is liable to pay the amount to the complainant with interest? v)Whether the complainant is entitled to the reliefs claimed? After hearing both the parties at length and on perusal of the documents available with the case record, the learned Authority vide order dt. 28.3.2023 allowed the complaint on contest against the respondent but without cost. The respondent has been directed to pay a sum of Rs.2,59,000/- to the complainant with interest thereon @9.50% per annum payable from 16.4.2011 till the date of payment. The amount to be returned to the complainant by the OPID Court shall be adjusted. 

7) The appellant being aggrieved and dissatisfied with the order dt. 28.3.2023 passed in Complaint Case No.143 of 2022 has filed the present appeal. The appellant admitted that the amount deposited by him with the promoter, is the part of the amount which the promoter deposited before the Hon’ble Supreme Court of India and subsequently transferred to the OPID Court, Cuttack. It is further submitted that the learned Authority erred in passing the order to pay simple interest @9.50% per annum and the interest should be compounded quarterly payable to the appellant. As the order has been passed directing the respondent-promoter to pay simple interest, the appellant shall suffer irreparable loss and injury and the appellant sustained heavy financial loss. It has been further submitted that in a similar cases that is complaint case No. 145/2020 and 152/2021, the learned Authority has awarded interest compounded quarterly, but in her case simple interest has been awarded. For which the appellant prayed for the relief as mentioned in paragraph-3. 

8) The respondent no.2 in his counter submitted that the impugned order has also been challenged by him before the Hon’ble High Court of Orissa in W.P. (C) No.17528 of 223 wherein the present appellant appeared and contested the case. It is further submitted that the respondent no.1 in the said writ petition has sought for a declaration whether the customer whose money have already been deposited before the Hon’ble Apex Court pursuant to order dt. 20.12.2014 in various SLPs, can approach other forum unlike Consumer Forum and Real Estate Authority Bhubaneswar. The said writ petition was dismissed vide order dt. 11.7.2024 and the matter is now pending before the Hon’ble Apex Court in SLP (C) No. 25395 of 2024. It is also submitted that the present appellant had applied before the Competent Authority-cum-ADM Cuttack for refund of her amount vide application sl.no. 3190 to 3195 (BNL No.5537 to 5542). Hence, the promoter is neither to pay any principal or interest. Reiterating the averments made in the objection filed in the complaint case, the respondent no.2 submitted that he is no more liable for any refund to the listed customers who are the complainants before the OPID Court. Hence, it is prayed to dismiss the appeal. 

9) Heard the learned counsels for the respective parties, perused the documents available on the case record and found that the present appeal has been preferred by the appellant assailing only the interest part that too it has been prayed to award 9.50% interest compounded quarterly instead of simple interest of 9.50% per annum on Rs.2,59,000/- which has been passed by the learned Authority in the impugned order. There is no dispute with regard to payment of Rs.2,59,000/- by the appellant to the respondent no.2. At no point of time, the respondent no.2 has controverted the payment of Rs.2,59,000/- from the appellant. The money receipts filed by the appellant also shows that she has paid the aforesaid amount to the respondent no.2 and the respondent no.2 has also issued money receipt to that effect proving the receipt of payment. The last payment was made on 15.4.2011 which is evident from Annexure-2 to the appeal. So far as the payment of interest is concerned, Section 18 (1) (b) of the Real Estate (Regulation & Development) Act, 2016 provides that “due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available to return the amount received by him in respect of that apartment, plot, building as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act. Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.” Further, Section 16 of the Odisha Real Estate (Regulation & Development) Rules, 2017 provides interest payable by promoter and allottee. The rate of interest payable by the promoter to the allot or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest Marginal Cost of Lending Rate plus two per cent. The Act does not prescribe anywhere to levy compound interest either on the promoter or on the allottee. The rate of interest to be paid by the promoter in case of delay in delivery of the flat or land is envisaged under Rule 16 of the Odisha Real Estate (Regulation & Development) Rules, 2017. In the case of M/S Suneja Towers Private Limited vs Anita Merchant on 18.4.2023 the Hon’ble Apex Court in Civil Appeal Nos.2892-2894 of 2023 (arising out of SLP (Civil) nos.8163-8165 of 2022) has been pleased to hold in para 27.3 of the said judgement that “we would hasten to observe that the respondent is being allowed to retain the sum of money already received by her only because of peculiar circumstances of this case and else, this relaxation for the respondent is in no manner to be read as approval of the orders impugned or approval of the proposition of awarding compound interest in these matters. As said and iterated hereinbefore, such a proposition of awarding compound interest in these matters by the Fora exercising jurisdiction under the Act of 1986 stands disapproved.” In the said case, the Hon’ble Apex Court disapproved the award of compound interest in favour of the respondent. Further, the appellant resorted to the order passed in Complaint Case No.145 of 2020 and 52 of 2021 wherein compound interest has been awarded in favour of the allottees. Though appeal No. 71 of 2021 and 19 of 2022 were preferred against the order passed in Complaint case No. 145 of 2020 and 52 of 2021, but the said appeals were dismissed due to non-deposit of statutory amount. The award of compound interest which is dehors of rules, in those cases cannot be treated as precedent and any decision on that score cannot be cited as precedent in other cases, particularly when the higher forum has already discarded the decision of awarding of compound interest. In various appeals this Tribunal has also discarded the order of compound interest awarded by the learned Authority in favour of the allottees and direction has been given for payment of simple interest. Hence, in the instant case, there is no reason to disagree to the order of the learned ORERA with regard to award of simple interest. We find the order passed by the learned Authority in respect of payment of interest i.e. @9.50% per annum is justified and legally tenable. No error has been committed by the learned Authority while delving into the matter and in passing the impugned order. 

10) In view of the discussions made herein above, we do find the impugned order dt. 28.3.2023 passed by the learned Authority in Complaint Case No.143 of 2022 is neither patently illegal nor is manifestly erroneous to warrant our interference. Hence, we are inclined to direct the respondent to pay a sum of Rs.2,59,000/- to the complainant with interest thereon @ Rs.9.50% per annum payable from 16.4.2011 till the date of payment and therefore the amount to be returned to the complainant by the OPID Court shall be adjusted. Accordingly, we hold that the present appeal being devoid of any merit is liable to be dismissed. Accordingly, the appeal stands dismissed. Send an authentic copy of this order alongwith the record of the complaint case to the learned Authority for information and necessary action. Also send a copy of this order to the appellant as well as respondent no.2. 

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Kuldeep Kumar Singhal,. Vs. Mojika Real Estate and Developers. Pvt. Ltd, - we are convinced that the refund requests post-issuance of the completion certificates should not be entertained, except in the special circumstances of inordinate delays, structural defects, project is not in a habitable conditions or defective titles etc.

 REAT Rajasthan (2025.05.20) in Kuldeep Kumar Singhal,. Vs. Mojika Real Estate and Developers. Pvt. Ltd, [Appeal No.114/2023 In Complaint No. RAJ-RERA-C-2022-5113 ] held that.-  

• In light of the above analysis and findings and the relevant provisions of the Act, 2016, the explicit contractual terms, and the broader implications on the real estate project integrity and stakeholders equity and also relying on the Hon’ble Supreme Court’s order in IREO Grave v/s Abhishek Khanna case, we are convinced that the refund requests post-issuance of the completion certificates should not be entertained, except in the special circumstances of inordinate delays, structural defects, project is not in a habitable conditions or defective titles etc.

Excerpts of the Order;

# 1. This instant appeal under Section 44 of the Real Estate (Regulation and Development) Act, 2016 (“the Act”) is initiated against the order dated 08.12.2022 passed by the Rajasthan Real Estate Regulatory Authority (“the Authority”) in Complaint No. RAJ-RERA-C-2022-5113, whereby the Authority declined to allow the appellant’s prayer for refund of the amount deposited and instead directed the promoter to offer possession on specified terms.

# 2. The appellant-allottee, Mr. Kuldeep Singhal, had booked a 2bhk flat in the respondent’s real estate project known as “Mojika Ultima”, situated at Plot No. 59-68, 69/213, 71-74, Chak Saligrampura, Jaipur- 303905, for a total sale consideration of Rs. 23,50,000/-, out of which he deposited Rs. 22,44,250/-through self-funding and bank loan. An agreement for sale was executed on 10th January, 2018, under which the possession of the unit was to be handed over by 31st January, 2021.

# 3. The appellant contends that the respondent-promoter failed to deliver possession as per the agreed timeline and instead obtained a delayed completion certificate without proper intimation. The promoter also allegedly raised illegal demands including interest at the rate of 18% p.a. and other charges, threatening forfeiture upon non-payment. Aggrieved by this conduct, the appellant approached the Authority seeking refund with interest under Section 18(1) of the Act.

# 4. The Authority, after hearing the matter, observed that the promoter had obtained the completion certificate on 27th January, 2022, and therefore was willing to hand over the unit in compliance with the Act. The Authority found no grounds to allow refund and instead directed the promoter to make a valid offer of possession and adjust interest dues appropriately. A penalty was also imposed on the promoter for wrongful interest demand.

# 5. In the present appeal, the appellant reiterates the grounds raised before the Authority and relies on judgments allowing refund in cases of delay, asserting that he cannot be compelled to take possession of a delayed and disputed unit.

# 6. The respondent, through counsel, submitted that the project has been completed and completion certificate obtained. The promoter is willing to hand over possession and the unit has remained earmarked for the appellant. It is submitted that there is no inordinate delay or impossibility of performance, and hence refund cannot be insisted upon.

# 7. The Tribunal finds that the facts of the present case are squarely covered by this Tribunal’s order in the appeal no 62/2023 (Jasmeet Jain v/s Mojika Real Estate and Developers. Pvt. Ltd) of the same promoter and the same project bearing the similar facts and circumstances wherein this Tribunal has taken the following view –

Analysis, Findings and Conclusion:-

Analysis and Findings:-

# 8. In the light of the aforesaid, discussion, the analysis and findings of this Tribunal are:-

Issue No. 1:-

(i) Legal framework under the RERA Act, 2016:-

Under the RERA, Act, 2016, particularly Section 18(1), a refund is primarily mandated only under specific conditions:- Such as the promoter’s failure to complete or handover possession of the unit in accordance with the terms of agreement for sale. However once the completion certificate is obtained, as the project is deemed complete in accordance with the sanctioned layout plans, the developer / promoter is presumed to have fulfilled their primary obligation under Section 11(4)(a) of the Act, 2016.

• “11 (4) The promoter shall— (a) be responsible for all obligations, responsibilities and functions under the provisions of this Act or the rules and regulations made thereunder or to the allottees as per the agreement for sale, or to the association of allottees, as the case may be, till the conveyance of all the apartments, plots or buildings, as the case may be, to the allottees, or the common areas to the association of allottees or the competent authority, as the case may be:” 

• “Section 18 (1):- (1)If the promoter fails to complete or is unable to give possession of an apartment, plot or building,-- 

• (a)in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or 

• (b)due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason,he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act: 

• Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed. 

In the present case, since the “completion certificate” has been duly issued by the competent authority and uploaded on the webpage of “the Authority”, the project is deemed to have stand as compliant with all statutory obligations, therefore, refund claims at this juncture are not legally tenable. 

(ii) Contractual Obligations:- As per the Agreement for Sale executed between the appellant-allottees and the respondent-promoter, it is explicitly understood that “no refund claims shall be entertained post completion of the project” except in cases of proven deficiency or breach of terms by the promoter. This understanding between the parties serves to maintain the financial viability and equitable execution of the project. 

(iii) Equitable and financial consideration:- The completion certificate signifies that all regulatory and construction benchmarks have been met. Refunds after this milestone would impair the financial stability of the project, adversely affecting other allottees who have met their obligations in good faith. The funds contributed by the buyers have already been allocated towards construction, development and regulatory compliance, in alignment with Section 4(2)(L)(D) of Act, 2016 which mandates the use of 70% funds received from allottees for the project’s land and construction costs. 

• “Section 4(2)(l)(D) :- a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorised by the promoter, stating:-- 

• ( D) that seventy per cent. of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose: Allowing refunds post completion would not only disrupt the financial closure of the project but also set a destabilizing precedent for the real estate sector, potentially discouraging investment and increasing project risk. 

(iv) Possession Rights and Remedy framework: 

Issue No. 2:- Post-completion, allottees are entitled to take possession of their respective units as per Section 17(1) of the Act, 2016. Any concerns regarding defects, if any, may be addressed under Section 14(3) of the Act, 2016, which provides for rectification within five years of possession, as also mandated under the relevant clause/s of the Agreement for Sale executed between the parties. 

• “Section 17: Transfer of title. 

• 17(1) The promoter shall execute a registered conveyance deed in favour of the allottee along with the undivided proportionate title in the common areas to the association of the allottees or the competent authority, as the case may be, and hand over the physical possession of the plot, apartment of building, as the case may be, to the allottees and the common areas to the association of the allottees or the competent authority, as the case may be, in a real estate project, and the other title documents pertaining thereto within specified period as per sanctioned plans as provided under the local laws: Provided that, in the absence of any local law, conveyance deed in favour of the allottee or the association of the allottees or the competent authority, as the case may be, under this section shall be carried out by the promoter within three months from date of issue of occupancy certificate.”

• “Section 14 (3):In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, it shall be the duty of the promoter to rectify such defects without further charge, within thirty days, and in the event of promoter's failure to rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation in the manner as provided under this Act.” 

Conclusion:- 

# 9. In light of the above analysis and findings and the relevant provisions of the Act, 2016, the explicit contractual terms, and the broader implications on the real estate project integrity and stakeholders equity and also relying on the Hon’ble Supreme Court’s order in IREO Grave v/s Abhishek Khanna case, we are convinced that the refund requests post-issuance of the completion certificates should not be entertained, except in the special circumstances of inordinate delays, structural defects, project is not in a habitable conditions or defective titles etc. However, the allottee will be at liberty, if so desired, if not interested to stay in the project and willing to exit, may do so, as per the terms of Agreement for Sale executed between the parties.

# 10. In view of the aforesaid facts and findings, the prayer for refund of the entire deposited amount under Section 18 (1) (a) of the Act, 2016 is not sustainable, and we are inclined to hold that the Authority was correct in dismissing the claim for refund. However, the appellant’s right to claim compensation for the delay in handing over possession, as envisaged under the proviso to Section 18(1) of the Act, 2016, and as affirmed by the Hon’ble Supreme Court in IREO Grace v/s Abhishek Khanna case, remains intact. The appellant is entitled to interest for every month of delay from the committed date of possession, until the date of valid offer of possession is made by the respondent-promoter.

# 11. Considering the above facts and circumstances, we do not find any merit in the appeal and therefore, the appeal is liable to be dismissed and the impugned order dated 08th December, 2022, is affirmed. In the result, the instant appeal (Appeal No. 114/2023) (Kuldeep Kumar Singhal v/s Mojika Real Estate and Developers Pvt. Ltd.) against the impugned order dated 08th December, 2022, in complaint No. RAJ-RERA-C-2022-5113 is hereby dismissed. The respondent-promoter is directed to comply with the directions of the Authority vide impugned order dated 08th December, 2022, and pay the interest on delayed possession from the committed date of possession to the date of valid offer of possession is made to the appellant. The respondent-promoter is also directed to obtain occupancy certificate, in accordance with law, within 60 days of issuance of this order and share the same with the appellant as well as to the Authority.

# 12. The appellant-complainant is at liberty, if so desired, to claim for compensation in accordance with law, before the appropriate forum.

# 13. Pending interim application (s) / order(s), if any, stand(s) closed.

# 14. A copy of this order be transmitted to the learned counsel for the appellant / and Raj- RERA, Jaipur.

# 15. File to be consigned to record.

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Rajeev Misra Vs. M/s. Anthem Infrastructures Pvt. Ltd. - In other words, in the event an allottee ‘wishes to withdraw’ from the delayed project, he has to make a demand with the promoter, or by filing a complaint that he intends to withdraw from the delayed project before the date of completion or handing over possession of the unit.

 UP-REAT (2025.04.22) in Rajeev Misra Vs. M/s. Anthem Infrastructures Pvt. Ltd. [Appeal No.885 OF 2021] held that.

• On conjoint reading of Section 18(1) and the proviso, an allottee, who makes a choice to withdraw from the project has to make a demand to that effect with the promoter, such a demand has to be made on or before the project stands completed i.e. upon the promoter having obtained completion certificate from the competent authority, followed by an offer of possession of the unit.

• In the event an allottee ‘wishes to withdraw’ from the delayed project, he has to make a demand with the promoter, or by filing a complaint that he intends to withdraw from the delayed project before the date of completion or handing over possession of the unit.

• In other words, in the event an allottee ‘wishes to withdraw’ from the delayed project, he has to make a demand with the promoter, or by filing a complaint that he intends to withdraw from the delayed project before the date of completion or handing over possession of the unit. 

• The allottee can withdraw from the project if the promoter fails to complete the project or is unable to give possession of the apartment, as per terms of the agreement and the dates specified therein.

• The withdrawal of the appellant under Section 18(1) of the Act 2016 upon completion of the project and making offer of possession of the unit is impermissible.

Excerpts of the Order;

# 1. Heard Sri Nirmit Srivastava, learned counsel for appellant and Sri Siddharth Nandwani, learned counsel for respondent.

# 2. The appellant/allottee is raising challenge to the order dated 27.02.2019, passed by the Uttar Pradesh Real Estate Regulatory Authority (for short, RERA Authority) at Gautam Budh Nagar, in Complaint No.7201814651, whereby, a direction was issued to the respondent promoter to handover possession of the unit to the appellant.

# 3. The appellant had instituted a complaint seeking refund of his deposit on the ground that the project was delayed, secondly, the amenity (Grand Eiffel Gate) was not provided opposite Tower D, wherein, unit of the appellant is situated.

# 4. In this backdrop it is submitted that Regulatory Authority committed an error in not granting relief of refund, rather, directing possession of the unit which was not prayed for.

# 5. The questions that arise for consideration are : 

• (i) whether the appellant allottee could have withdrawn from the project under Section 18(1) on completion of the project;

• (ii) whether ‘Grand Eiffel Gate’, erected at the commercial block gate, would tantamount to breach of agreement/brochure/layout plan to warrant refund of deposit.

# 6. The facts, inter se, parties, are not in dispute.

Question No.1

# 7. The appellant booked a flat (unit) bearing number D-1002, at 10th floor of Tower D, French Apartments, admeasuring 1125 sq.ft, situated at GH- 07B, Sector-16B, Greater Noida (west), Uttar Pradesh. The appellant allottee came to be allotted the above flat on 18.09.2012. The sale consideration of the unit was at Rs.36,03,750/- inclusive of preferential

location charges (PLC).

# 8. It is submitted that respondent promoter in the prospectus and advertisement had promised construction of iconic symbol ‘Grand Eiffel Gate’, opposite Tower-D, whereas, ‘Grand Eiffel Gate’, has been erected at the other entrance gate where the commercial block is situated. In this backdrop it is submitted that the respondent misled and misrepresented the appellant.

# 9. On 21.11.2013, Builder Buyer Agreement (BBA) came to be executed between the parties. The height of Tower-D was 19 floors and not 14 floors as is being alleged by the appellant. The possession of the unit was to be handed over within 36 months with additional grace period of 90 days i.e. on or before 13.08.2016. Admittedly, the project was delayed. The partial occupancy certificate (OC) was obtained by the respondent promoter in respect of the project on 12.04.2018. Thereafter, a final demand letter came to be issued to the appellant on 18.04.2018, calling upon the appellant to deposit the balance amount and execute the lease deed of the unit by depositing the stamp papers. The appellant did not comply, on the contrary within five months thereafter filed a complaint on 28.09.2018, before the Regulatory Authority, seeking refund. The complaint came to be disposed of by the impugned order dated 27.02.2019 directing the respondent to handover possession.

# 10. Learned counsel for respondent submits that the amount outstanding against the appellant on the date of issue of final demand notice was at Rs.88,464/- after adjusting delay interest as directed by the impugned order. The respondent complied the impugned order and is not at default. The appellant on completion of the project declined to take possession of the unit

# 11. Learned counsel for respondent in support of his submissions has placed reliance on paras 43 and 44 of the judgment of Hon’ble Supreme Court in the case of IREO GRACE PRIVATE LIMITED VS. ABHISHEK KHANNA AND OTHERS, reported in (2021) 2 SCC 241, to urge that after completion of the project, the allottee declining to take possession of the unit tantamounts to breach of agreement and termination of the unit. The consequence in terms of the agreement follow.

# 12. In this backdrop, the point for consideration is as to when can an allottee exercise his choice to withdraw from the incomplete/delayed project under Section 18(1) of Act, 2016.

# 13. Before adverting to Section 18, it would be apposite to refer to other provisions of the Act, 2016. The Act, 2016 came to be enacted, inter-alia, for regulation and promotion of the real estate sector in an efficient and transparent manner and to protect the interest of the consumer in the real estate sector. Section-3 mandates that no promoter shall advertise, market, book, sell, or offer of sale, or invite person to purchase any unit without registering the real estate project with the Real Estate Regulatory Authority (for short ‘RERA Authority’).

# 14. Section 4 mandates that every promoter shall make an application to the RERA Authority for registration of the project, inter-alia stating the time period within which the promoter undertakes to complete the project or phase thereof, as the case may be. Section 4(2)(l)(C) is being extracted : 

• “……….

• (l) a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorised by the promoter, stating:--

• …………

• (C) the time period within which he undertakes to complete the project or phase thereof, as the case may be; ……….”

# 15. Chapter III of Act, 2016 provides the functions and duties of promoter. Section 11(4), inter-alia, provides for the obligations, responsibilities and functions of the promoter under the Act or Rules and Regulations made thereunder or to the allottee as per agreement for sale. It further mandates that it is responsibility of the promoter to obtain the Completion Certificate (CC), or the Occupancy Certificate (OC), or both, from the relevant competent authority and to make it available to the allottee individually or to association of the allottees, as the case may be. Further, it is an obligation cast upon the promoter to execute the registered conveyance deed of the apartment, plot or building along with undivided proportionate title in the common areas as provided under Section 17 of the Act, 2016. Section 11(4) (a) (b) & (f) are being extracted:

• Section 11(4) The promoter shall— 

• “(a) be responsible for all obligations, responsibilities and functions under the provisions of this Act or the rules and regulations made thereunder or to the allottees as per the agreement for sale, or to the association of allottees, as the case may be, till the conveyance of all the apartments, plots or buildings, as the case may be, to the allottees, or the common areas to the association of allottees or the competent authority, as the case may be:

• Provided that the responsibility of the promoter, with respect to the structural defect or any other defect for such period as is referred to in sub-section (3) of section 14, shall continue even after the conveyance deed of all the apartments, plots or buildings, as the case may be, to the allottees are executed.

• (b) be responsible to obtain the completion certificate or the occupancy certificate, or both, as applicable, from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be; 

• (c)……

• (d) …..

• (e) …..

• (f) execute a registered conveyance deed of the apartment, plot or building, as the case may be, in favour of the allottee along with the undivided proportionate title in the common areas to the association of allottees or competent authority, as the case may be, as provided under section 17 of this Act;”

# 16. On careful perusal of the provisions extracted, hereinabove, Act, 2016 provides for compulsory registration of a real estate project by the promoter with the RERA Authority and casts an obligation to complete the project within the time period declared by the promoter. On completion of the project to apply and obtain OC/CC from the competent authority before handing over possession of the unit to the allottee. Section 2(q) defines completion certificate, which reads as under :

• “……….

• (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(z)(f) defines occupancy certificate, which is being extracted :

• “………….………….

• (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;

• ………….”

# 17. On conjoint reading of the definitions, it is mandated that on the project being completed, promoter would have to make an application under the relevant Building Bye Laws/Rules to the competent authority (development authority) under whose jurisdiction the development was undertaken and obtain the completion certificate (CC) certifying that the project has been developed according to the sanctioned plan and specifications approved by the competent authority, whereas, occupancy ertificate (OC) is to be obtained from the competent authority certifying  and permitting occupation of the building which has provisions for civic infrastructure, such as, water, sanitation and electricity. On close scrutiny of the definitions of CC and OC, there is a distinction. The expressions CC, and or, OC have different connotations. CC is issued in respect of the development of the ‘real estate project’ in accordance to the sanctioned plan, whereas, OC pertains to occupation of any ‘building’. The expression ‘building’ is defined under Section 2(j), which inter-alia, includes, structure or part of structure, which is intended to be used for residential, commercial or for any other related purposes. Section 2(j) is extracted :

• “…………..

• (j) “building” includes any structure or erection or part of a structure or erection which is intended to be used for residential, commercial or for the purpose of any business, occupation, profession or trade, or for any other related purposes;

• ……………..……………..”

In other words, occupancy certificate (OC) must certify that the building that is to be used for residential purposes is habitable with all necessary fittings and facilities pertaining to water, electricity supply etc.

# 18. Section 18 of the Act, 2016, falls under Chapter III pertaining to functions and duties of promoter. In other words, Section 18 cannot be read independently but is dependent on satisfying the functions/duties and obligations cast by the legislature upon the promoter. Section 18 provides for return of amount and compensation. The relevant part of the provision is extracted :

• Section 18: “(1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,—

• (a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or 

• (b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act:

• Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.

• (2)………….

• (3) If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act.”

# 19. Section 19(4) in Chapter IV is para-materia to Section 18(1), mandating rights and duties of allottees. In view thereof, it is the right of an allottee to claim refund of the deposited amount along with interest at such rate as may be prescribed and compensation if the promoter fails to comply or is unable to give possession of the apartment, inter-alia, in terms of agreement for sale. Sub section (10) of Section 19 casts a duty upon the allottee to take physical possession of the apartment within a period of two months of the occupancy certificate issued for the said apartment. Section 19(10) is extracted :

• “………….…………..

• (10) Every allottee shall take physical possession of the apartment, plot or building as the case may be, within a period of two months of the occupancy certificate issued for the said apartment, plot or building, as the case may be.

• …………………….”

# 20. Section 31 of the Act, 2016 provides for filing of complaint with the Authority or to the Adjudicating Officer, as the case may be. The complaint can be brought about by any aggrieved person, he need not be an allottee or a promoter. The maintainability of the complaint would dependent upon the facts and circumstances of each case as to whether the complainant is an aggrieved person.

# 21. Section 34 provides for the functions of RERA Authority which, interalia, mandates to ensure compliance of the obligations cast upon the promoter, the allottees and the real estate agent under the Act, Rules and Regulations made thereunder. Section 34(f) & (g) are extracted : 

• “………….…………..

• (f) to ensure compliance of the obligations cast upon the promoters, the allottees and the real estate agents under this Act and the rules and regulations made thereunder;

• (g) to ensure compliance of its regulations or orders or directions made in exercise of its powers under this Act;

• …………. ………….”

# 22. Section 38 confers powers on RERA Authority to impose penalty or interest, in regard to any contravention of obligations cast upon the promoter, and or, allottees under this Act, or Rules and Regulations made thereunder.

# 23. On conjoint reading of the provisions, Section 18, inter-alia, recognizes functions and duties of promoter to complete the project by the due date promised in any document be it allotment letter/agreement/broacher /prospectus. The date of completion is to be declared by the promoter on an affidavit before the RERA Authority while seeking registration of the project. In the event of default of the promoter in honouring the due date of completion, the allottee in such an event is entitled to make either of the two choices mandated in Section 18(1) and the proviso to Section 18(1). An allottee can choose to withdraw from the project, and on demand, the promoter shall be liable to return the amount received by him in respect of that apartment with interest at such rate, as may be prescribed, including, compensation. In the event an allottee makes a choice to continue in the delayed project, he shall be paid by the promoter interest for every month of delay till handing over possession of the unit.

# 24. In other words, in the event an allottee ‘wishes to withdraw’ from the delayed project, he has to make a demand with the promoter, or by filing a complaint that he intends to withdraw from the delayed project before the date of completion or handing over possession of the unit. 

# 25. However, as per proviso to Section 18(1), an obligation has been cast upon the promoter that he ‘shall’ pay interest to the allottee for every month delay till handing over possession to such allottee who has continued in the delayed project. Such class of allottees, need not make a demand for interest, rather, it is mandatorily obligated by the legislature on the promoter to pay interest. It is by implication that an unconditional statutory right has been conferred by the legislature upon an allottee to receive interest for the delayed period and a mandatory statutory obligation cast upon the promoter to pay interest to the allottee. The obligation imposed on the promoter is unconditional and non-negotiable.

# 26. In this backdrop, the issue that is to be examined is as to when can an allottee make a choice to withdraw from a delayed project. On conjoint reading of Section 18(1) and the proviso, an allottee, who makes a choice to withdraw from the project has to make a demand to that effect with the promoter, such a demand has to be made on or before the project stands completed i.e. upon the promoter having obtained completion certificate from the competent authority, followed by an offer of possession of the unit. An allottee who desires to withdraw from a delayed project cannot sit quietly on his intention giving an impression to the promoter that the allottee intends to continue in the delayed project and would honour his commitment/duty to take possession of the unit which is offered to the allottee after obtaining CC/OC. The allottee, in other words, is required to express its intention to withdraw by raising a demand to that effect with the promoter, failing which, in view of proviso to Section 18(1) the intention is that the allottee desires to continue in the delayed project.

# 27. The allottee under Section 18(1) of Act, 2016, is entitled to refund of deposit and compensation on the following conditions having being satisfied :

• (i) promoter fails to complete or is unable to give possession of the unit; 

• (ii) duly completed by the date specified in the agreement or any document as the case may be;

• (iii) in case the allottee wishes to withdraw from the project.

• (iv) promoter shall be liable on demand to return the amount received to the allottees;

# 28. Section 18(1), therefore, comes into operation if the promoter ‘fails to complete’ or ‘unable to give possession’ of the unit. The project is complete, on the promoter applying and obtaining the CC from the competent authority. However, there may be instances that despite the promoter having received the CC of the project is ‘unable to give possession’, of the unit to the allottee for some reason or the other viz the unit is inhabitable; conveyance deed is not being executed; physical possession of the unit is being delayed for some other factors etc. It would depend on the facts of each case. In that event, the allottee may make a demand to withdraw from the project on the default of the promoter not handing over the possession despite having received the OC/CC of the project.

# 29. Proviso to Section 18(1) of Act, 2016, is an exception to the main provision. The proviso, unlike the main provision, mandates that those allottees who do not ‘intend to withdraw’, from the project, they ‘shall be paid, by the promoter’, interest till the handing over of the possession at the prescribed rate. The proviso would come into play in cases where:

• (i) allottee does not intend to withdraw from the delayed project;

• (ii) allottee shall be paid interest by the promoter, without the allottee making a demand;

• (iii) till the handing over of the possession of the unit;

# 30. In the afore noted backdrop, under Section 18(1) of the Act, the allottee can withdraw from the project if the promoter fails to complete the project or is unable to give possession of the apartment, as per terms of the agreement and the dates specified therein. Admittedly, the project came to be completed by the respondent on receiving partial OC on 12.04.2018, thereafter, a final demand notice was issued on 18.04.2018, requesting the appellant allottee to comply and complete the necessary formalities for execution of lease deed and possession of the unit. The allottee failed to comply. In the circumstances the case of the appellant would not fall under Section 18(1), rather on completion of the project the case of the appellant would be covered under proviso to Section 18(1) for the reason the appellant continued in the project till handing over possession of the unit. In the circumstances, stage at which the appellant has sought withdrawal tantamounts to termination of the agreement and cancellation of the unit upon completion of the project. Accordingly, the terms and conditions of termination of the agreement would follow. The withdrawal of the appellant under Section 18(1) of the Act 2016 upon completion of the project and making offer of possession of the unit is impermissible. Question No.1 is answered accordingly.

Question No.2

# 31. The appellant has sought refund of his deposit in terms of Section 12 for the incorrect/false statement contained in the advertisement/prospectus that the ‘Grand Eiffel Gate’, shall be constructed opposite Tower-D. Admittedly, ‘Grand Eiffel Gate’, was constructed at the second gate of the project at the commercial block.

# 32. On specific query, learned counsel for appellant is unable to show any document whatsoever that the PLC amount at Rs.75/- per sq.ft. was deposited for Tower-D as that would be facing the ‘Grand Eiffel Gate’.

# 33. Our attention was drawn to the proposed sketch of the lay out plan, which was part of the brochure, wherein, two gates are shown giving access into the campus. The Towers had been constructed facing the Green area followed by 24 meters/wide road and thereafter the main gates. In other words, Tower D and other Towers facing the Green area are able to view the ‘Grand Eiffel Gate’. It is not the case of the appellant that the, ‘Grand Eiffel Gate’ as promoted in the advertisement and brochure of the project was not constructed. Further, it is not an amenity or facility which the allottees can enjoy for recreation or otherwise. ‘Grand Eiffel Gate’, is a gate which has been constructed at one of the entrance gate. In the circumstances, we are unable to persuade ourselves in accepting the submission of learned counsel for appellant/allottee that there has been a breach of advertisement/prospectus and the promised, ‘Grand Eiffel Gate’ has not been constructed as promised. The submission of learned counsel for appellant that there has been breach of advertisement/prospectus is not borne out from the records placed before us. Tower-D is facing both the gates across the Green area and it cannot be said to be a breach of a facility to enable the appellant to terminate the agreement and seek refund of deposit under Section 12 of Act, 2016. Question No.2 is accordingly answered.

# 34. Having due regard to the facts and circumstances of the case, the appeal is disposed of by passing the following orders :

• (i) The impugned order dated 27.02.2019, passed by the Regulatory Authority in Complaint No.7201814651, is set aside and quashed. 

• (ii) The respondent shall refund the deposited amount as per terms and conditions of the agreement for breach of the agreement within 45 days from the date the order is uploaded, failing which appellant shall be entitled to interest thereon @ MCLR+1% till the date of payment.

# 35. No order as to costs..

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