1. The complainants above named have filed this complaint seeking refund under the provisions of section 18 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the ‘RERA’) in respect of the booking of their flats in the respondent’s project known as “Vtp Cygnus-Nation R1-Tower 7” bearing MahaRERA Registration No.P52100009524 at Manjri,Pune.
2. This complaint was transferred to this Bench on 16-04-2021 by the Hon’ble Member-2 MahaRERA. Accordingly, this complaint was scheduled for hearing on 23/04/2021 as per the Standard Operating Procedure dated 12th June 2020 issued by MahaRERA for hearing of complaints through Video Conferencing. Both the parties have been issued prior intimation of the hearing and they were also informed to upload their respective written submissions. Accordingly, the complainants appeared for the said hearing through their advocate. However, none appeared for the respondent though notice for this hearing was duly served upon the respondent. Hence, after hearing the arguments advanced by the complainants, it was expressed to transfer this complaint to Ld. Adjudicating Officer/MahaRERA Pune to decide the quantum of compensation as the complainants are also seeking refund along with compensation under section 18 of the RERA. However, the MahaRERA has noticed that the respondent has not filed any reply on record of MahaRERA. Hence in compliance of principles of natural justice, the matter was again scheduled for hearing on 10-06-2021, when the respondent appeared and filed its reply on record of MahaRERA. The same was taken on record. On the said date of hearing, the complainants were directed to go through the said reply and to file their rejoinder if any, within a period of one week. With the said direction, the case was adjourned to this date.
3. During the course of hearing today, the complainants appeared and made their submissions. However, despite notice, none appeared for the respondent. The MahaRERA heard the arguments of the complainants and also perused the available record.
4. During the course of hearing, the ld. advocate for the complainants has informed MahaRERA that this was group complaint is filed by 13 allottees of this project. However, the Hon’ble Member-2 passed and dismissed the complaint in respect of other complainants at sr nos. 3 to 13 and therefore this complaint is restricted to complainant nos. 1 and 2 with respect to their flat No. 609. Hence he made submissions on behalf of complainant nos. 1 and 2.
5. The complainants further stated that they have booked their flat in the respondent’s project by executing a registered agreement for sale dated 2-07-2014. According to the said agreement, the respondent was liable to handover possession of the said flat to him on or before 5 years from the date of execution of the said agreement for sale. Though they have paid substantial amount towards the cost of the said flat, the respondent has failed and neglected to handover possession of the said flat to them. They further stated that the respondent has failed and neglected to handover possession of the flats to them and hence, they are seeking withdrawal from the project. Though around 7 years have passed from the date of execution of agreements for sale, the project is still incomplete and only 5 % to 10% work has been done on site. Further, several meetings have been held with the respondent, however, it has failed to complete the project and handover possession of their flats to them. Due to the said delay, they are facing financial difficulties as they are paying EMI for home loan and also rent for alternate accommodations. Further, though majority share holding have been changed in the respondent, no order under section 15 of the RERA has been obtained. Hence they want to withdraw from the project and want to seek refund along with interest and compensation for the delayed possession under section 18 of the RERA.
6. The complainants further stated that that they are also seeking refund along with cost of the litigation and the refund of stamp duty and registration charges paid by them, since they will not get the refund of the said stamp duty amount as more than 5 years have passed.
7. The respondent has filed its reply in these complaints and denied the contentions raised by the complainants. The respondent has stated that it is a company duly registered under the provisions of Indian Companies Act 2013 and the said project was registered with MahaRERA under the tenure of earlier management as a part of larger integrated multiuse township in the name styled Kul Nation. The present owners and the shareholders of the respondent company have assumed operation control of the respondent company after a 100% share purchase executed in the month of March 2018. The new shareholders have also applied for and obtained the name change certificate from the Registrar of Companies, Pune.
8. It has undertaken this larger project on land admeasuring about 40 hectares i.e. 97.35 acres. The respondent company was formerly known as Kul Developers Private Limited. Due to change in shareholding pattern, it has faced several issues and the said change in management has been communicated to all the allottees and several allottees have either applied for cancellation and refund or approached the MahaRERA for refund with interest and compensation which impacts the management financially. It further stated that in good faith and to keep transparency in communication, it had thereafter sent email invitation to all the allottees mentioning about the future development and revision of completion date. The same was duly accepted by majority of the allottees in writing. It has further stated that after change in shareholding pattern, it has started the construction of the project in full pace. The project is of 24 floors and in the year 2018, the project was completed till 15th floor and as on date, the construction till 24th slab is done and sheer wall and top slab is cast. It has further stated that 80 to 85% of construction of said project is completed as on date.
9. With regard to the delay, the respondent has stated that the construction was delayed amid pandemic Covid-19 crisis which has impacted the entire real estate sector which was beyond its control.
10. It has stated that the complainants have claimed that the date of possession has been changed without the consent of the allottees to which it has replied that it changed the date of possession by consent of majority of the allottees considering the fact that the project was a distress project of which the complainants were well aware and despite the said fact, it was ready and willing to complete the project in accordance with the agreement for sale registered with them. The respondent further stated that as per clause no. 7 of the said agreement, it is entitled for extension on account of reasons beyond its control. It has further stated that as the date of possession has been extended by majority of the allottees therefore, the minority cannot take the shelter of permissions or approval from them. The respondent further stated that in view of the consent given by majority of the allottees, the respondent have invited the complainants to execute the supplementary agreement / deed which the complainants have failed to execute despite several intimations. The respondent further stated that the complainants have time and again contended the procedure adopted for change of management. It has stated that circular issued by MahaRERA in the year 2019 was made applicable by the respondent which states that “for the purpose of section 15, changes in (internal) shareholding or constituents of a promoter’s organisation, that doesn’t affect obligations and liabilities with respect to the allottees and the rights and liabilities of the promoter’s organization shall not require aforementioned approvals.”
11. In view of the said circular, it has reiterated that its entity remains the same which is not disputed by the complainants, it is only the shareholding capacity of the respondent which is affected which shall be considered as internal change in management of the company. Therefore, the respondent is not duty bound to comply with the provisions of section 15 of the RERA. It has further stated that despite the said circular, it has communicated to all the allottees regarding change in management after having detailed meeting with the allottees that the date of possession is revised and it is uploaded on MahaRERA portal. The respondents therefore prayed for dismissal of this complaint.
12. The MahaRERA has examined the arguments advanced by both the parties as well as the record. In the present case, by filing these complaints, the complainants are seeking refund along with the interest and compensation under the provisions of section 18 of the RERA. Admittedly, the complainants are allottees of this project registered by the respondent promoter and the respondent has executed registered agreements for sale with them on 02-07-2014. According to clause no. 4.1-2 of the said agreement, the respondent was liable to handover possession of their flats on or before the expiry of 5 years from the dates of execution of the said agreement which was executed in the year 2014. The deadline, therefore, seems to have lapsed in the year 2019 itself. The complainants have uploaded relevant pages of their agreement to support their contention. Admittedly, the possession has not been handed over to them.
13. The respondent though has filed its reply on record, however it has failed to explain the delay caused in this project. It has merely stated that the shareholding pattern got changed in the year 2018 and the present management has taken over this project in the year 2018. It has further contended that majority of the allottees of this project have given their consent for revised completion date of this project and now the project has completed upto 80% to 85% as on date. Hence it has prayed for dismissal of this complaint. From the aforesaid submissions made by the respondent prima facie, it appears that no plausible explanation has been given by the respondent for the alleged delay.
14. In this regard, it is necessary to peruse the provision of section 18 of the RERA, which reads as under:
“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 allottee, 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.”
15. The aforesaid explicit provisions under section 18 of the RERA clearly provide that on failure of the promoter to handover possession of the flat to the allottee on the agreed date of possession mentioned in the agreement for sale, on demand of the allottee, if the allottee is willing to withdraw from the project, the promoter is liable to refund the entire amount to the allottee along with interest as prescribed under the provisions of RERA.
16. Likewise, in the present case, since the respondent has failed to handover possession of the flats to the complainants on the agreed date of possession, the complainants are entitled to seek refund under section 18 of the RERA.
17. In the present project, MahaRERA has noticed that considering the facts and circumstances of this project, the Hon’ble Member-2 MahaRERA has already considered the claims of the other allottees who had filed complainants for violation of section 18 of the RERA and passed an order on 30-11-2019 towards the interest for the delayed possession and granted reliefs to them under section 18 of the RERA. The complainants being allottees of this project are also entitled to seek reliefs under section 18 of the RERA at par with the other allottees of this project.
18. In view of above facts and discussion, the respondent is directed to refund the entire amount paid by the complainants towards the consideration of their flats along with interest at the rate of SBI’s Highest Marginal Cost Lending Rate (MCLR) plus 2% as prescribed under the provisions of section-18 of the Real Estate (Regulation and Development) Act, 2016 and the Rules made there under from the date of payment till the actual realisation of the said amount to the complainants.
19. With the above directions, the complaint stands disposed of.
20. The certified copy of the order will be digitally signed by concerned Legal Assistant of MahaRERA and it is permitted to send the same to both the parties by e-mail.
