UP-REAT (2025.04.01) in Sanjeev Aggarwal Vs. Greater Noida Industrial Development Authority [Appeal No.687 of 2022] held that.
In view thereof, the offer of possession made by the respondent without obtaining completion certificate is not a legal and valid offer of possession of the unit. The appellant was justified in not accepting the physical possession of the unit as the respondent/promoter was at default. There is no concept in law/bye laws of the competent authority of issuing completion certificate (OC/CC) of a project from a retrospective date.
The offer of possession, execution of lease/sale deed and thereafter physical possession of the unit in habitable condition follows OC/CC and not other way round as per scheme of Act 2016.
That the declaration of a subsequent date of completion with RERA made by the promoter does not shift the liability and obligation mandated under Section 18 (1) of the Act, 2016 to a future date.
The mandate of Section 18(1) (proviso) is absolute and unconditional casting upon the promoter a positive mandatory obligation to pay interest to the allottee who has continued in the project for the delay. The liability to pay interest by the promoter would start running from the initial date of completion declared by the promoter to the allottee. The promoter cannot recile/retract from his commitment declared to the allottee.
Unlike the main provision, under the proviso, allottee is not required to make a demand for the interest. In the event promoter fails to comply the mandatory obligation to pay the interest, the promoter, in that event, exposes itself for penal consequences under Chapter VIII of Act, 2016.
Excerpts of the Order;
# 1. Heard Shri Nirmit Srivastav, learned counsel for the appellant/allottee, and Shri Rishindra Vikram Singh, learned counsel for the respondent/promoter.
# 2. By the instant appeal the appellant/allottee is raising challenged to the order dated 09.06.2020, passed by the learned Regulatory Authority at Gautam Budh Nagar, in Complaint No. NCR/144/09/2302/2019, whereby, inter alia, a direction came to be issued directing respondent/promoter to hand over possession of the unit and pay interest till offer of possession (w.e.f. 19.09.2017 to 10.06.2019), at the prescribed rate. Further, pay interest in terms of Section 2 (za) (i) at the rate charged by the respondent/promoter after enforcement of the Act, 2016.
# 3. In cross appeal (appeal No. 875/2021 Greater Noida Industrial Development Authority Vs. Sanjeev Agarwal) the promoter is aggrieved by direction Nos. 3 & 4 of the impugned order, whereby, interest for the delayed period has been granted.
# 4. Learned counsel for the appellant/allottee confines the appeal for the relief of interest till handing over possession of the unit. In other words the other reliefs are not being pressed.
# 5. The learned counsel for the appellant submits that since occupancy certificate/completion certificate (OC/CC) of the project came to be issued on 29.05.2023, the appellant is entitled to interest till the said date.
# 6. The question that arises for consideration is, whether the appellant allottee would be entitled to delay interest until 29.05.2023, i.e. date of issuance of completion certificate of the project.
# 7. The facts inter-se parties are not in dispute. The appellant allottee came to be allotted a residential flat bearing No. 1 GF Block 105, Sector MU-II on 18.09.2013, on deposit of registration amount at Rs. 80,000/-. The appellant paid Rs. 12,31,351.02 against the sale consideration of the unit.
# 8. The respondent promoter has brought on record the completion certificate dated 29.05.2023, wherein, it has been noted that the project came to be completed on 15.10.2018, i.e. 5 years, prior to the issuance of completion certificate. On specific query, learned counsel for the respondent is unable to show any certificate with regard to the completion of the project as on 15.10.2018, and whether any such document was uploaded on the RERA portal as mandated under the Act, 2016 and rules framed thereunder. No such document has been placed on record except the completion certificate dated 29.05.2023. In the circumstances, the contention of the learned counsel for the appellant/allottee is that the date 15.10.2018 has been incorporated retrospectively by the promoter maliciously to deprive the allottee the delay interest in completion of the project. Further, the lease deed of the unit was executed on 10.06.2019, the completion date of the project is nowhere indicated. Learned counsel for the appellant informs that physical possession of the unit till date has not been taken as the unit was not habitable. The complaint came to be filed on 28.09.2019. In the objection/written statement filed by the respondent promoter, it was nowhere stated that the project was completed on 15.10.2018. It is before this Tribunal, as late as 28.06.2023, the document dated 29.05.2023 has been placed on record contending that the completion certificate of the project came to be issued from a retrospective date. It is not being disputed by the learned counsel for the respondent that completion certificate of the project was uploaded on the RERA portal before 2023 as mandated under Rule 14 of the Rules. In view thereof, the offer of possession made by the respondent without obtaining completion certificate is not a legal and valid offer of possession of the unit. The appellant was justified in not accepting the physical possession of the unit as the respondent/promoter was at default. There is no concept in law/bye laws of the competent authority of issuing completion certificate (OC/CC) of a project from a retrospective date. The offer of possession, execution of lease/sale deed and thereafter physical possession of the unit in habitable condition follows OC/CC and not other way round as per scheme of Act 2016.
# 9. Section 18(1) of the Act is extracted :-
18. Return of amount and compensation.—
(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.
# 10. On registration of the project with RERA as ongoing project, promoter is required to make a declaration of the date of completion of the project. In the event, promoter declares a date subsequent to the earlier date of completion, it would mean and indicate that the project is delayed. Section 18(1) of the Act, 2016 would become operative leaving it open to the allottee to either continue in the delayed project or withdraw from the project. It, therefore, follows that the declaration of a subsequent date of completion with RERA made by the promoter does not shift the liability and obligation mandated under Section 18 (1) of the Act, 2016 to a future date. The mandate of Section 18(1) (proviso) is absolute and unconditional casting upon the promoter a positive mandatory obligation to pay interest to the allottee who has continued in the project for the delay. The liability to pay interest by the promoter would start running from the initial date of completion declared by the promoter to the allottee. The promoter cannot recile/retract from his commitment declared to the allottee. The appellant/allottee, therefore, would be entitled to interest until 29.05.2023.
# 11. Proviso to Section 18(1) is an exception to the main provision i.e. Section 18(1). Section 18(1) is confined to those class of allottees who have expressed their intention to the promoter to withdraw from the delayed project. Such allottees are entitled to refund of their deposit and interest thereon, including, compensation, whereas, proviso to Section 18(1) carves out an exception to the main provision. The proviso governs those allottees who have continued in the delayed project. The legislative mandate insofar such allottees, is that they are entitled to interest on their deposit till the handing over of possession of the unit. A mandatory statutory obligation is cast upon the promoter to pay the interest to such allottees. The expression employed by the legislature is, ‘shall be paid, by the promoter,’ to the allottee. Unlike the main provision, under the proviso, allottee is not required to make a demand for the interest. In the event promoter fails to comply the mandatory obligation to pay the interest, the promoter, in that event, exposes itself for penal consequences under Chapter VIII of Act, 2016.
# 12. Having due regard to the facts, it is not disputed by the counsel for the respondent that the procedure mandated and obligated upon the promoter in handing over the possession of the unit was not complied. On completion of the project, an application is to be made by the promoter before the Competent Authority duly supported with no objection certificate from the relevant departments. After issuance of completion certificate, an offer of possession is to be made by the promoter to the allottee. Thereafter, lease/conveyance deed of the unit is to be executed. In the given facts at hand, no such procedure was adopted by the promoter and it appears to cover up their infirmity, respondent/promoter in order to justify the illegal and invalid possession of the unit, the completion certificate came to be issued on 29.05.2023, certifying that the project came to be completed from a retrospective date five years earlier. We are unable to persuade ourselves in accepting the submissions made by the learned counsel for the respondent/promoter that the completion date of the project be taken as 15.10.2018, to compute the delay interest. After registration of the project with RERA it was incumbent upon the respondent to have uploaded the CC in 2018 itself, it was not done, probably the CC was not available. The question is answered accordingly.
# 13. Having due regard to the facts and circumstance, the appeal is disposed of by passing
following orders:
(i) the appellant allottee shall be entitled to interest w.e.f 19.09.2017 to 20.05.2023 at MCLR+1% on the deposit and on the computed amount interest at the same rate till actual date of payment;
(ii) the impugned order dated 09.06.2020 shall stand modified to the extent herein above;
(iii) the delay interest to be computed and paid within 45 days from date the order is uploaded;
(iv) no order as to cost.
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