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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