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(i) whether the appellant allottee could have withdrawn from the project under Section 18(1) on completion of the project;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