1. This appeal was filed by the Lucknow Development Authority (hereinafter referred to as 'the appellant') against the judgment and order dated 10.02.2020 passed by the Regulatory Authority, Lucknow (hereinafter referred to as 'the Regulatory Authority') in Complaint no. LKO162/10/0807/2019 (Anoop Kumar Srivastava & Anr. Vs. Lucknow Development Authority), whereby the Regulatory Authority directed the promoter to take the balance amount and stamp fee as per Rules from the complainant and handover the possession after getting the sale deed registered within 45 days from the date of order. Further, interest for the delay at the rate of MCLR+1% was directed to be paid by the promoter from 01.11.2016 till offering of physical possession.

2. The case was registered as defective appeal (Appeal No. (D) 174/2021) and subsequently vide order dated 05.01.2022 it was converted into Regular Appeal No. 174/2021.

3. The facts giving rise to present appeal, as culled out from the pleadings, are that the appellant in 2011 launched its upcoming residential scheme known as 'Smriti Apartment' at Sector-J, Jankipuram Extension, Jankipuram, Lucknow. The respondent preferred an application for allotment of a residential unit in the aforesaid scheme. In view of the application form a unit bearing Flat No. A/1701/A-1 was allotted to the respondent vide allotment letter dated 15.11.2011. As per Clause 2.4 of the Brochure, the possession of the flat was proposed to be handed over to the allottees within 24 months. The estimated cost of the unit was Rs. 26,30,000/- as per Allotment Letter dated 15.11.2011 and the respondent had paid Rs. 26,30,000/- till 17.01.2012 as per the record available on RERA portal. After that the respondent/allottee has made a payment of Rs. 1,90,944/- as per the Accounts summary dated 31.10.2019. The sale deed of the flat in question was executed on 05.06.2020 in favour of the respondents. Learned counsel for the appellant has not placed on record the OC/CC. During the course of argument, it was orally informed by learned counsel for the appellant that the Completion Certificate was issued on 04.02.2020.

4. The respondents preferred Complaint no. LKO162/10/0807/2019 before the Regulatory Authority which was decided by the Regulatory Authority vide impugned order dated 10.02.2020 in the manner stated in para 1 above.

5. Being aggrieved by the impugned order dated 10.02.2020 passed by the Regulatory Authority, the appellant has filed the present appeal on various grounds, which are as follows:-

(A) BECAUSE, the impugned order dated 10-02-2020 has passed by the Ld. Authority is without jurisdiction.

(B) BECAUSE the relief sought by the respondent is in the nature of compensation which should be filed before the Adjudicating Officer in Form-N but the respondent has filed complaint in Form-M before the Ld. Authority and hence the complaint was not maintainable before the Ld. Authority.

(C) BECAUSE, the Ld. Authority has not considered the issue of jurisdiction as raised by the appellant.

(D) BECAUSE, the Ld. Authority travelled beyond the prayer requested for in the complaint and gave a relief which was not even prayed for.

(E) BECAUSE, the Ld. Authority has failed to consider the true facts and circumstances of the case and passed an order by directing appellant to pay delay interest @MCLR+1 p.a.

(F) BECAUSE, the Ld. Authority has overlooked that the respondent has paid his last payment in 20198 which clearly shows that he has failed to make timely payment to get the possession.

(G) BECAUSE, the respondent himself making a delay in timely payments and therefore they are not legally entitle to seek delay interest but in-spite of this the Ld. Authority has awarded delay interest from 2016 in favor of the respondent.

(H) BECAUSE, the Ld. Authority has failed to consider the terms of booklet in which it was specifically mentioned that the possession was proposed to be given within 24 months on the basis of situations and circumstances of the project.

(I) BECAUSE, the rules and regulations of the appellants allotment procedure itself provides a options to the allottee's to claim refund if the project was delayed or if they did not wants to continue with the project. However, the respondent was himself aware that the project was delayed due to some civil disturbance which was beyond the appellant and therefore they are decided to wait for the completion.

(J) BEACAUSE the complaint was filed by the complainant with approx 6 years delay from the stipulated period of 24 months which is clearly shows that the respondent is trying to get the advantage of the of 2016.

(K) BECAUSE the order passed is arbitrary and unjust and has been passed without using application of judicial mind and in vary causal manner.

(L) BECAUSE the respondent has breached the terms of the agreement by defaulting in timely payment.

(M) BECAUSE the respondent has not undergone any loss by waiting for his unit however, the value of the unit is increasing day by day and further the respondent has not filed any supporting document before the Ld. Authority which proves that a loss has been caused to him.

(N) BECAUSE the project was delayed due to civil disturbance which was beyond the control of the appellant and therefore the appellant is not liable to pay delay interest to the respondent.

(O) BECAUSE the impugned order dated 10-02-2020 passed by Ld. Authority is without jurisdiction and with several illegality and hence the impugned order needs to be set aside in the interest of justice.

6. The appellant has prayed for setting aside the impugned judgment and order dated 10.02.2020, passed by the Regulatory Authority and allow the appeal.

7. Learned counsel for the respondent while opposing the grounds of the appellant submitted that the provision of the Act, 2016, shall take precedence of the Rules of Lucknow Development Authority or the terms and conditions of the BBA/Allotment Letter and relied upon the judgment of Hon'ble Supreme Court in M/s. Newtech Promoters & Developers Ltd. Vs. State of U.P. (C.A. No. 6745-6749 of 2021), wherein it has been observed that single member of the Ld. Authority can pass order and the Regulatory Authority has passed order dated 10.02.2020 after considering Allotment Letter the facts of the case properly, just, fair and equitable manner because the respondents had paid entire cost of the unit in the year 2011-12 as per schedule given by the appellant. Learned counsel for the respondent submitted that the appellant has taken false and fabricated grounds in its appeal which has no locus and hence needs to be rejected.

8. Heard Saurabh Misra, learned counsel for the appellant and Shri Laxmi Narayan Mishra, learned counsel for the respondent.

9. In order to examine the grounds taken by the appellant and the issue involved in the instant appeal, we deem it proper to frame the following issues:-

(1) Whether under the scheme of Act 2016 and Rules 2016 any mechanism has been provided for determination of the interest or compensation for delay in handing over possession of the apartment/plot to the allottee and/or refund with interest, if allottee does not want to continue/wish to withdraw from the project

(2) Whether the Regulatory Authority ought to have examined the complaint of respondent/allottee only on the basis of agreed terms and conditions mentioned in the Brochure read with Procedure, Rules and Regulations of Lucknow Development Authority

(3) Whether the project in question of the Lucknow Development Authority/appellant is delayed

(4) Whether the appellant is entitled for interest and/or compensation on account of delayed possession under the scheme of the Act, 2016 and whether the rate of interest granted by the Regulatory Authority is in accordance with the provisions of the Act 2016, Rule 2016

(5) Whether it is necessary and mandatory for the Promoter to have first Completion Certificate (CC) and Occupation Certificate (OC) under the provisions of the of 2016 and Rules of 2016 read with the U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act 2010 before offering possession as well as asking the allottee to settle the account and satisfy the final demand

(6) Whether the complainant can claim interest and/or compensation for delayed possession of the Unit/Apartment/Flat by the appellant after execution of the conveyance deed and taking over possession of the Unit

(7) Whether under the scheme of the Real Estate (Regulation & Development) Act 2016 and U.P. Real Estate (Regulation & Development) Rules 2016 there is a limitation prescribed for filing complaint from the date of cause of action

(8) Whether the impugned order passed by the single member of the Regulatory Authority is against the provisions of Section 21 of the Act 2016 and is liable to be set aside being wholly bad and unsustainable in law

10. Issue No. (1) is regarding, whether under the scheme of the Act, 2016 and Rules, 2016 any mechanism has been provided for determination of the interest or compensation for the delay in handing over possession and/or refund with interest/compensation if allottee chooses to withdraw from the Project.

10.1. The Act envisages adjudication by the Regulatory Authority in terms of the powers under Chapter V of the and in particular Sections 31, 32, 34, 35 and 40 of the Act, and for adjudging compensation by the Adjudicating Officer in terms of the power under Chapter VIII of the and in particular Sections 71 and 72 thereof.

10.2. The Act spells out the obligations of the promoter of a real estate project and the consequence of the promoter failing to fulfill those obligations. Some of those obligations are enumerated in Section 11, 12 to 18 of the.

10.3. Section 18 of thetalks of the consequence of the failure by the promoter to complete or to be unable to give possession of an apartment, plot or building either in terms of the agreement for sale or failure to complete the project by the date specified therein or on account of discontinuance of his business either on account of suspension or revocation of the registration under the or for any other reason. In the event of either of the above contingencies under Section 18 (1) (a) of the Act, the promoter is made liable on the demand of the allottee:

(i) In the event that the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by the promoter in respect of that apartment, plot, building, as the case may be, together with "interest at such rate as may be prescribed", "including compensation in the manner as provided under this Act";

(ii) Where an allottee does not intend to withdraw from the project, the promoter shall pay him for every month's delay in the handing over of the possession "interest at such rate as may be prescribed". Section 18 (2) of themandates that in case loss is caused to allottee due to the defective title of the land, on which the project is being developed or has been developed, the promoter shall compensate the allottee and that such claim for compensation under Section 18 (2) shall not be barred by limitation provided under any law for the time being in force.

10.4. Section 18 (3) of thestates that where the promoter fails to discharge any other obligations under the or the Rules or Regulations made there under or in accordance with the terms and conditions of the agreement for sale, the promoter shall be liable to pay "such compensation" to the allottees, in the manner as provided under the.

10.5. It is apparent on a reading of Section 18 of theas a whole that upon the contingencies spelt out therein, (i) the allottee can either seek refund of the amount by withdrawing from the project; (ii) such refund could be together with interest as may be prescribed; (iii) the above amounts would be independent of the compensation payable to an allottee either in terms of Sections 18 (2) or 18 (3) of the read with other provisions; (iv) the allottee who does not intend to withdraw from the project will be required to be paid by the promoter interest for every month's delay of handing over possession.

10.6. When one turns to the powers of the Authority, it is seen that under Section 31, the complaints can be filed either with the Authority or with the Adjudicating Officer (AO) for violation or contravention of the provisions of the or the Rules and Regulations. Such complaint can be filed against "any promoter, allottee or real estate agent", as the case may be. Such complaint can be filed by "any aggrieved person". The Explanation to Section31 (1) of the states that for the purposes of said sub-section "person" shall include an association of allottees or any voluntary consumer association registered under any law for the time being in force. Section 31 (2) states that the form, manner and fees for filing a complaint under sub-section (1) shall be such as may be prescribed.

10.7. Having gone through the relevant Sections of the, we find that as per Sections 12, 18 and 19 of the Act, the allottee, in case of default by the promoter, is entitled to refund of his/her entire investment along with "interest at such rate as may be prescribed" and "compensation in the manner provided under the". Whereas in Section 12, the part dealing with interest and the part dealing with compensation are joined with the word "and" while in Section "18" they are joined with the word "including". Also, "at such rate as may be prescribed" is suffixed to the word "interest" in the context of refund of investment, but the expression "at such rate as may be prescribed" is neither prefixed nor suffixed to the word "compensation" in any of the Sections of the. The term compensation is suffixed by the expression "in the manner as provided under this Act" in Sections 12, 14, 18 & 19 of the. However, compensation and interest are qualified by the term "as he thinks fit in accordance with the provisions of any of those sections" in Section 71 of the Act. Theonly lays down for "holding an enquiry in the prescribed manner, after giving any person concerned a reasonable opportunity of being heard" under Section 71. The Act very clearly provides that the quantum of compensation or "interest as he thinks fit" under Section 71 will be decided taking into consideration the factors listed under Section 72 of the.

10.8. We further examined Section 31 of theand Rule 33 & Rule 34 of the Rules. The relevant portions of Section 31 of theand Rule 33 of the Rules are extracted as follows:-

Extract of Section 31 of the

"(1) Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter, allottee or real estate agent, as the case may be.

Explanation

For the purpose of this sub-section "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.

(2) The form, manner and fees for filing complaint under sub-section (1) shall be such as may be specified by regulations."

As can be seen from above, Section 31(2) of theprovides for specifying by regulations, the form, manner and fee for filing complaint under Section 31(1) of the. As provided under Section 31(2) of the Act, the U.P. Government has framed Rules, 2016. Rule 33(1) provides for manner of filing a complaint with the Regulatory Authority. Rule 33(1) is extracted as follows:-

Extract of Rule 33(1) of Rules-

(1) Any aggrieved person may file a complaint with the regulatory authority for any violation under the or the rules and regulations, made there under, save as those provided to be adjudicated by the adjudicating officer, in Form M which shall be accompanied by a fee of rupees one thousand in the form of a demand draft drawn on a nationalized bank, in favour of regulatory authority and payable at the main branch of that bank at the station, where the seat of the said regulatory authority is situated.

It is evident from Rule 33(1) of the Rules that the complaints filed with the Regulatory Authority should be in Form M, except those complaints which require to be adjudicated by the Adjudicating Officer. On top of Form M, it is clearly written that it is as per provisions of Rule 33(1) and is meant for filing complaint under Section 31 of the. Further Column 5 of the Form M specifically requires a complainant to indicate the relief(s) sought.

10.9. We have further examined Rule 34(1) of the Rules which relate to filing of a complaint with the Adjudicating Officer for compensation. Rule 34(1) reads as follows:-

Extract of Rule 34(1)

(1) Any aggrieved person may file a complaint with the adjudicating officer for compensation under Section 12, 14, 18 and 19 in Form N, which shall be accompanied by a fee of rupees one thousand in the form of a demand draft drawn on a nationalized bank in favour of regulatory authority and payable at the main branch of that bank at the station, where the seat of the said regulatory authority is situated.

10.10. It is clear from Rule 34 (1) of the Rules that a complaint for "compensation" under Sections 12, 14, 18 and 19 of theis to be filed before the Adjudicating Officer in Form N. It is mentioned on top of Form N itself that it is an application to Adjudicating Officer for claim of compensation under Rule 34(1) of the Rules and under Section 31 of theread with Section 71 of the. A complainant is required to indicate in Column 5 of Form N, the compensation sought.

10.11. Thus, it is our considered view that Form N is to be filed before an "Adjudicating Officer" for only claiming "compensation" under Rule 34(1); whereas Form M is to be filed before the Regulatory Authority under Rule 33(1) of the Rules for all types of reliefs, barring "compensation", for any violation under the, Rules or Regulations.

10.12. We have also examined the provisions of Sections 71 and 72 of the. The opening words of Section 71 (1) of themake it clear that the scope and functions of the Adjudicating Officer (AO) are only for 'adjudging compensation under Sections 12, 14, 18 and 19 of the'. If the legislative intent was to expand the scope of the powers of the AO, then the wording of Section 71 (1) ought to have been different. On the contrary, even the opening words of Section 71 (2) of themake it clear that an application before the AO is only for 'adjudging compensation'. Even in Section 71 (3) of the Act, it is reiterated that the AO may direct 'to pay such compensation or interest as the case may be, as he thinks fit' in accordance with provisions of Sections 12, 14, 18 and 19 of the. This has to be seen together with the opening words of Section 72 of the Act, which read "while adjudging the quantum of compensation or interest, as the case may be, under Section 71, the adjudicating officer shall have due regard to the following factors, namely,................"

On a collective reading of Sections 71 and 72 of the Act, the legislative intent becomes explicit. This is to limit the scope of the adjudicatory powers of the AO for determining "compensation or interest as he thinks fit" in the event of violation of Sections 12, 14, 18 and 19 of the.

10.13. On examination of Section 35 of the Act, we find that the powers of the Regularity Authority under Section 35 of theare of a wide nature. While discharging those functions, it will be open to the Authority to even require the AO to conduct the inquiry. Section 35 (2) of thealso makes it plain that the Regulatory Authority will have the same powers as a Civil Court. The legislative intent is, therefore, not to diminish the adjudicatory functions of the Regulatory Authority, but rather to provide it with all the trappings of a quasi-judicial/judicial authority while inquiring into the complaints and issuing directions, such as directing the Adjudicating Officer to adjudicate the compensation or interest. The legislature in its own wisdom has used the word "Authority" as well as "Adjudicating Officer" wherever it is required. Furthermore, the legislature has clearly, intentionally and suitably used the word "penalty" or "interest at such rate as may be prescribed" in case of the Regulatory Authority and "compensation" or "interest as he thinks fit" in case of the Adjudicating Officer.

10.14. Further, the Hon'ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. And others Vs. Union of India (supra) observed as follows:-

"Section 18(1)(b) lays down that if the promoter fails to complete or is unable to give possession of an apartment due to discontinuance of his business as a developer on account of suspension or revocation of the registration under the or for any other reason, he is liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice in this behalf including compensation. If the allottee does not intend to withdraw from the project he shall be paid by the promoter interest for every month's delay till handing over of the possession. The requirement to pay interest is not a penalty as the payment of interest is compensatory in nature in the light of the delay suffered by the allottee who has paid for his apartment but has not received possession of it. The obligation imposed on the promoter to pay interest till such time as the apartment is handed over to him is not unreasonable. The interest is merely compensation for use of money".

From the aforementioned discussion, it is clear that the of 2016 provides a mechanism for determination of interest and/or compensation for the delay in handing over possession of the unit to the allottee, if the allottee wishes to stay with the project and/or refund with interest, if allottee wants to withdraw from the project. Issue no. (1) is decided accordingly.

11. Issues nos. (2): Lucknow Development Authority (LDA) took a plea that present case ought to have been governed with the already agreed terms and conditions i.e. terms and conditions mentioned in the Brochure of the Scheme, read with Rules and Regulations of the LDA, but the Regulatory Authority failed to consider the same and has taken into account certain conditions in isolation and rest of the provisions have been ignored, which is impermissible, further Regulatory Authority failed to consider that in none of the conditions as per agreed terms, the appellant was entitled for any compensation/interest, in case the appellant decides to receive possession of the flat despite delay in handing over of possession.

11.1. The Lucknow Development Authority, the appellant placed reliance on clause 2.4 of its Brochure and submitted that the possession of the flat was proposed to be provided to the allottees within 24 months. Learned counsel for the respondent further placed reliance on clause 13.1 and submitted that in the Brochure, it is specifically provided that after allotment order conditions/rules applicable in Lucknow Development Authority or the State Government shall be binding upon the allottee.

11.2. The appellant/LDA has further submitted that the procedure for allotment of residential buildings of LDA was formulated by the Board of LDA in the year 1993, and the same are binding upon the allottee as per clause 13.1 of the Brochure, and condition no. 38.1 of the same provides that in case construction of the buildings is delayed for the reasons beyond its control then in that case LDA shall not be responsible for the delay, and in case, the amount deposited by the allottee remained in the account of LDA for a period of one year or more, then in that case simple interest at the @ 6%. p.a. shall be applicable on the deposited amount. The Procedure of 1993 was superseded in the year 2016 by means of Lucknow Development Authority procedure for registration and allotment of residential properties, 2016, and vide condition no. 14.2, it is provided that in case the Lucknow Development Authority (LDA) did not deliver the possession of the property within the time limit prescribed then the allottee may demand the refund of deposited amount with an interest at the rate of 9% p.a., and in case allottee accepts the possession despite of delay, no interest/compensation shall be payable to such an allottee. Thus the allottee in this case is entitled for only refund of amount with interest at the rate of 6% p.a. in view of the terms and conditions applicable on the date of allotment, and after coming into force of 2016 Procedure simple interest at the rate of 9%, if he chooses to withdraw from the project. Further in none of the conditions as per the agreed terms, the appellant was entitled for any compensation/interest in case the appellant decides to receive possession of the flat despite of delay in handing over of possession and therefore, the appellant who has consented on oath to abide by the provisions contained in the rules, while submitting application duly supported with an affidavit for allotment of a residential unit in the scheme in question, cannot claim interest & possession both, contrary to the undertaking given on oath.

11.3. On examination of the Brochure we found that in clause 13.1 it is mentioned that after allotment other conditions/rules applicable in Lucknow Development Authority (LDA) and any amendment/supersession in such Rules by the LDA or the State Government shall be binding upon the allottee, but specific conditions/rules have not been mentioned. Even it is also not mentioned in the Brochure, from where an applicant/allottee can find those conditions/rules. The Lucknow Development Authority (LDA) cannot take advantage of clause 13.1 of the Brochure, while applying procedure for allotment of residential building of LDA formulated in the year 1993 or subsequent new procedure framed in the year 2016, specially with respect to the rate of interest to be paid by the LDA in case the allottee chooses to seek refund on account of delay in completion of the project or no interest for delay in completion of Project, if allottee chooses to opt or decide to take possession of the unit even in the event of delay in completion of the Project.

11.4. Another important aspect of the matter is that the grant of interest to the allottee by the Lucknow Development Authority, if the allottee opts to withdraw from the project on account of delay, and providing no interest to the allottee in case he/she takes possession of the apartment in the project, is in violation as well as contrary to the provisions of sub-section (2) of Section 4 of the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010 (hereinafter referred to as 'the U.P. Apartment Act, 2010'). In order to appreciate sub-section (2) of Section 4 of the U.P. Apartment Act, 2010, the same is reproduced as follows:-

"CHAPTER II

DUTIES AND LIABILITIES OF PROMOTERS.

4. General liabilities of promoter.-- ..................

(2) Every promoter shall,

(a) specify in writing the date by which construction of the apartment is to be completed subject to force majeure clause and intimation sent to such purchaser;

(b) declare the penalty for delay in completion of the building and also penalty in the event of non-payment of installment by the purchaser;

(c) declare the conditions for cancellation or withdrawal of allotment and the extent of compensation either way in the event of violations of any of the conditions;

(d) give on demand by the intending purchaser, on payment of photocopying charges, true copies of the documents referred to in this section.

The provisions of Sub Section (2) (b) of Section 4 of the Apartment Act, 2010 mandates the promoter to declare the penalty for delay in completion of the building and also penalty in the event of nonpayment of installment by the purchaser, meaning thereby that in the Brochure a promoter is required to mention about the penalty for the delay in completion of the building and also penalty in the event of non-payment of installment by the purchaser. In the present case the Lucknow Development Authority in clause 2.1 of the Brochure only mentioned the obligation of the allottee to make payment of the installment in time and in case of failure the allottee has to pay penalty at the rate of 15% per annum and if due installment and penalty with interest are not paid within 90 days then his/her reservation/allotment was liable to be cancelled, whereas as per provisions of sub-section (2)(b) of Section 4 of the Apartment Act, 2010, the promoter was to declare and specifically mention the penalty to be paid by it, in case of delay in completion of the project. Thus the concerned provisions of the Procedure of 2016, is in violation of the Apartment Act, 2010, and it being a statutory organization, the Lucknow Development Authority is required to follow the concerned laws in its words and spirit.

11.5. Having examined the terms and conditions of the Registration Booklet/Agreement, we would like to examine the laws on contracts. In this connection, it is useful to note what Chitty has to say about the old ideas of freedom of contract in modern times. The relevant passages are to be found in Chitty on Contracts, Twenty-fifth Edition, Volume I, in paragraph 4, and are as follows:-

"These ideas have to a large extent lost their appeal today. "Freedom of contract", it has been said, "is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the economic interests of the community at large." Freedom of contract is of little value when one party has no alternative between accepting a set of terms proposed by the other or doing without the goods or services offered. Many contracts entered into by public utility undertakings and others take the form of a set of terms fixed in advance by one party and not open to discussion by the other. These are called "contracts d'adhesion" by French lawyers. Traders frequently contract, not on individually negotiated terms, but on those contained in a standard form of contract settled by a trade association. And the terms of an employee's contract of employment may be determined by agreement between his trade union and his employer, or by a statutory scheme of employment. Such transactions are nevertheless contracts notwithstanding that freedom of contract is to a great extent lacking.

Where freedom of contract is absent, the disadvantages to consumers or members of the public have to some extent been offset by administrative procedure for consultation, and by legislation. Many statutes introduce terms into contracts which the parties are forbidden to exclude, or declare that certain provisions in a contract shall be void. And the courts have developed a number of devices for refusing to implement exemption clauses imposed by the economically stronger party on the weaker, although they have not recognised in themselves any general power (except by statute) to declare broadly that an exemption clause will not be enforced unless it is reasonable. Again, more recently, certain of the judges appear to have recognised the possibility of relief from contractual obligations on the ground of "inequality of bargaining power".

11.6. Now turning to the question regarding ex-facie one sided, unfair and unreasonable agreement terms of a contract, the Hon'ble Supreme Court in LIC of India and Anr. Vs. Consumer Education & Research Centre & Ors., (1995)5 SCC 482 [LQ/SC/1995/657] , decided on 10th May 1995, was pleased to observe that:-

"in dotted line contracts there would be no occasion for a weaker party to bargain or to assume to have equal bargaining power. He has either to accept or leave the services or goods in terms of the dotted line ........ imposed by the stronger party or go without them. It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line.........".

11.7. Recently, the Hon'ble Supreme Court in Pioneer Urban Land & Infrastructure Ltd. Vs. Govindan Raghavan, II (2019) CPJ 34(SC) [LQ/SC/2019/611] , rejected the plea of the builder that it should not be directed to pay interest at the rate of 10.7% as the agreement provided for 6% interest. The Hon'ble Supreme Court observed that:-

"6.7. A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per Section 2 (r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.

7. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer's Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondent - Flat Purchaser. The Appellant - Builder could not seek to bind the Respondent with such one-sided contractual terms."

11.8. Subsequently, in Wg. Cdr. Arifur Rahman Khan & Ors. Vs. DLF Southern Homes Pvt. Ltd., reported in affirming the view taken in the Judgment in Pioneer's case (supra) the Hon'ble Supreme Court held that the term of the agreement authored by the Developer does not maintain a level platform between the Developer and the flat purchaser. The stringent terms imposed on the flat purchaser are not in consonance with the obligation of the Developer to meet the time lines for construction and handing over possession, and do not reflect an even bargain. The failure of the Developer to comply with the contractual obligation to provide the flat within the contractually stipulated period, would amount to a deficiency of service. Given the one-sided nature of the Apartment Buyer's Agreement, the consumer fora had the jurisdiction to award just and reasonable compensation as an incident of the power to direct removal of deficiency in service.

11.9. Moreover, Section 23 of the Contract Act, 1872 provides that what consideration and objects are lawful, and what are not. It says that the consideration or object of an agreement is lawful, unless, it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies, injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void to the extent it is "opposed to Public Policy".

11.10. The expression "public policy" or "opposed to public policy" has not been defined in the Contract Act. In R.B. Singh Vs. State of U.P. a Division Bench of the Hon'ble Allahabad High Court explained the meaning of word "Policy" and "Public Policy" as defined in various Dictionaries-

"30. In Grocier New Webster's Dictionary (page 304) "Policy" has been defined as a selected, planned line of conduct in the light of which individual decisions are made and coordination achieved. In Legal Glossary (1993, page 250) "policy" means a course of action adopted as advantageous or expedient. According to the Oxford Dictionary the word "Policy" means political sagacity, State-craft, prudent conduct, sagacity, craftiness, 'course of action adopted by Government'. According to Webster's New International Dictionary "policy" means a settled or definite course or method adopted and followed by a Government, institution, body or individual; a civil or ecclesiastical policy; Government; the science of Government.

31. In Law Lexicon with Legal Maxims it has been mentioned that the general head of "public policy" covers a wide range of topics, such as for example, trading with the enemy in time of war, stifling prosecutions, champerty and maintenance, and various other mater's; it has even been said in the House of Lords that public policy is always an unsafe and treacherous ground for legal decision. In Black's Law Dictionary "Public Policy" mean community common sense and common conscience, extended and applied throughout the State to matters of public morals, health, safety, welfare, and the like; it is that general and well settled public opinion relating to man's plan, palpable duty to his fellowmen, having due regard to all circumstances of each particular relation and situation. In Words and Phrases (West Publishing Co.) the word "public policy" generally means that imports something that is uncertain and fluctuating, varying with the changing economic needs, social customs and moral aspiration of the people. Lord Wright in his Legal Essays and Addresses (Vol. III, pages 76 and 78) stated that public policy like any other branch of the common law ought to be and I thing is, governed by the judicial use of precedents..... If it is said that rules of public policy have to be moulded to suit new conditions of a changing world, that is true, but the same is true with the principles of the canon law generally; Lord Lindley held in Janson v. Driefontein Consolidated Mines Ltd. that "a contract or other branch which is against public policy i.e. against the general interest of the country is illegal."

11.11. In Gherulal Parakh v. Mahadeodas Malya, AIR 1959 SC 781 [LQ/SC/1959/38] the Hon'ble Supreme Court while defining the word "Public Policy" or the "Policy of Law" has held as under:-

"Public policy or the policy of the law is an illusive concept; it has been described as "untrustworthy guide", "variable quality", "uncertain one", "unruly horse", etc. The primary duty of a Court of Law is to enforce a promise which the parties have made and to uphold the sanctity of contract which form the basis of society, but in certain cases, the court may relieve them of their duty on a rule founded on what is called the public policy for want of better words Lord Atkin describes that something done contrary to public policy is a harmful thing, but the doctrine is extended not only to harmful cases but also to harmful tendencies; this doctrine of public policy is only a branch of common law, and just like any other branch of common law it is governed by precedents; the principles have been crystallized under different heads and though it is permissible for courts to expound and apply them to different situations, it should only be invoked in clear and incontestable cases of harm to the public."

11.12. In the case of Central Inlad Water Transport Corpn. v. Brojo Nath Ganguly, (1986) 3 SCC 156 [LQ/SC/1986/114] the Hon'ble Supreme Court explained the above expressions and held-

"The Indian Contract Act does not define the expression "public policy" or "opposed to public policy". From the very nature of things, the expressions "public policy", "opposed to public policy" or "contrary to public policy" are incapable of precise definition. Public policy, however, is not the policy of a particular government. It connotes some matter which concerns the public good and the public interest. The concept of what is for the public good or in the public interest or what would be injurious or harmful to the public good or the public interest has varied from time to time."

The Hon'ble Supreme Court, after discussing the different schools of thought including landmark judgments on the expression of "public policy", further explained in the above case that-

"It is thus clear that the principles governing public policy must be and are capable, on proper occasion, of expansion or modification, Practices which were considered perfectly normal at one time have today become obnoxious and oppressive to public conscience. If there is no head of public policy which covers a case, then the court must in consonance with public conscience and in keeping with public good and public interest declare such practice to be opposed to public policy. Above all, in deciding any case which may not covered by authority our courts have before them the beacon light of the Preamble to the Constitution. Lacking precedent, the court can always be guided by that light and the principles under lying the Fundamental Rights and the Directive Principles enshrined in our Constitution".

11.13. Thus, where the terms of a contract show that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder, then certainly the contractual terms of the Agreement are one sided, unfair and unreasonable. It would also be referred as an unconscionable bargain. An unconscionable bargain would be one which is irreconcilable with what is right or reasonable or the terms of which are so unfair and unreasonable that they shock conscience of the Court.

11.14. Now again the question is that under which head an unconscionable bargain would fall If it falls under the head of undue influence, it would be voidable but if it falls under the head of being opposed to public policy, it would be void. The word "unconscionable" is defined in the Shorter Oxford English Dictionary, 3rd Edn., Vol. II, p. 2288, when used with reference to actions etc, as "showing no regard for conscience; irreconcilable with what is right or reasonable".

11.15. The Hon'ble Supreme Court in the case of DLF Universal Ltd. Vs. Town & Country Planning Deptt. reported in (2010) 14 SCC was pleased to quote in the heading "Interpretation of contract" as follows:-

"Interpretation of contract

13. It is settled principle in law that a contract is interpreted according to its purpose. The purpose of a contract is the interests, objectives, values, policy that the contract is designed to actualize. It comprises joint intent of the parties. Every such contract expresses the autonomy of the contractual parties' private will. It creates reasonable, legally protected expectations between the parties and reliance on its results. Consistent with the character of purposive interpretation, the court is required to determine the ultimate purpose of a contract primarily by the joint intent of the parties at the time the contract so formed. It is not the intent of a single party; it is the joint intent of both parties and the joint intent of the parties is to be discovered from the entirety of the contract and the circumstances surrounding its formation.

"14. As is stated in Anson's Law of Contract:

a basic principle of the Common Law of Contract is that the parties are free to determine for themselves what primary obligations they will accept....Today, the position is seen in a different light. Freedom of contract is generally regarded as a reasonable, social, ideal only to the extent that equality of bargaining power between the contracting parties can be assumed and no injury is done to the interests of the community at large.
15. The Court assumes:

that the parties to the contract are reasonable persons who seek to achieve reasonable results, fairness and efficiency.... In a contract between the joint intent of the parties and the intent of the reasonable person, joint intent trumps, and the Judge should interpret the contract accordingly. A party who claims otherwise, violates the principle of good faith."

11.16. We note that the Lucknow Development Authority had floated a scheme of multi storeyed residential apartments in Vikalp Khand-3, Gomti Nagar, Lucknow in the name of Panchsheel Apartments and in pursuance to the advertisement of the Lucknow Development Authority/appellant, the respondent purchased the Brochure and preferred an application for allotment of a unit. The respondent was allotted flat [property No. PS-5/1002-A-1] vide allotment letter dated 31.08.2012. The installments have also been deposited by the allottee as per the schedule mentioned in the allotment letter.

11.17. On scrutiny of the terms and conditions of the Brochure and allotment letter dated 31.08.2012, read with Clauses of Lucknow Development Authority procedure for Registration and Allotment of Residential Properties 1993 & 2016, we find that the rate of interest payable by the buyer/allottee to the promoter in case of default in payment works out to much higher than the interest or delayed penalty payable by the promoter to the buyer/allottee in case of default/delay, if allottee seeks refund and no interest in case allottee choose to continue with the project despite delay. It is evident from these terms and conditions of the Demand Letter and the Clauses of Registration Booklet as well as Lucknow Development Authority procedure for Registration and Allotment of Residential properties 1993 & 2016 that they do not provide a level playing field between the promoter and the allottee. We feel that this imbalance is on account of the fact that the buyer/allottee has much less bargaining power as compared to the promoter, and since the buyer/allottee had no choice but to accept such "dotted line, one sided, unjust and unreasonable" terms and conditions of the Registration Booklet, and of the allotment/demand letter, as framed by the promoter. Such terms and conditions which are one-sided, unjust and unreasonable cannot be made binding on the allottee.

11.18. In the light of above, we also observe that the promoter in the present case is an undertaking of the State Government having wide powers for acquisition of land and for development of residential projects. The rules, terms & conditions provided in the Registration Booklet and the Demand letter are heavily loaded in favour of the promoter and the buyer is at an obvious disadvantaged position and has no real choice but to agree to the rules, terms & conditions of the Registration Booklet and of the Demand Letter in order to buy a residential flat of his dreams, using his hard earned savings. Such terms and conditions of agreement, called by any name whatsoever, fall in the category of "dotted line" agreements or "one sided, unfair and unreasonable" agreements. Further, the Hon'ble Apex Court in several cases was pleased to observe that an unreasonable, unfair contract or an unreasonable and unfair clause in a contract where Contracting Parties are not equal in bargaining powers and where a man has no choice or rather a meaningful choice but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form as a part of the contract, cannot be allowed to act disadvantageously to the interest of the allottee/home buyer.

11.19. Further, Hon'ble Supreme Court time and again examined the issue of one sided apartment buyers' agreement and vide Pioneer Urban Land and Infrastructure Ltd. Vs. Govindan Raghavan (supra) was pleased to observe that incorporation of such one sided clauses in an agreement constitutes an unfair trade practice as per Section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair method or practices for the purpose of selling the flats by the builder, and again in Wg. Cdr. Arifur Rahman Khan & Others Vs. DLF Southern Homes Pvt. Ltd. (supra) while affirming the view taken in the judgment of Pioneer's case (supra) the Hon'ble Supreme Court held that on failure of the Developer to comply with the contractual obligation to provide the flat within the contractually stipulated period, the consumer fora had jurisdiction to award just and reasonable compensation as an incident of the power to direct removal of deficiency in service.

11.20. On the basis of the aforesaid analysis, we are of the view that the terms and conditions mentioned in the Brochure are binding on both the parties except clause 2.1 read with concerned provisions i.e. 14.2 of Lucknow Development Authority Procedure for Registration and Allotment of Residential Properties, 2016 which provides that, "in case allottee accepts the possession despite of delay, no interest/compensation shall be payable to such an allottee", being unreasonable, unfair, unjust and one sided and contrary to the provision of sub-section (2) (b) of Section 4 of the U.P. Apartment Act, 2010 apart from being unilateral and unfair.

11.21. On the basis of the aforesaid analysis, we are of the view that the terms and conditions mentioned in the Brochure are binding on both the parties except clause 2.1 read with concerned provisions i.e. 14.2 of Lucknow Development Authority Procedure for Registration and Allotment of Residential Properties, 2016 which provides that, "in case allottee accepts the possession despite of delay, no interest/compensation shall be payable to such an allottee", which is unreasonable, unfair, unjust and one sided and contrary to the provision of sub-section (2) (b) of Section 4 of the U.P. Apartment Act, 2010 apart from being unilateral and unfair.

11.22. We thus while rejecting the argument of the promoter that Regulatory Authority's order is not sustainable merely on the ground that it has ordered the promoter to pay to the allottee/complainant an interest not provided in the Registration Booklet and hold that Regulatory Authority is required to examine a complaint as per the provisions of the, Rules and Regulations and not merely on the basis of the terms and conditions of the Registration Booklet or as provided in the Demand/Allotment Letter only, taking into consideration the observations of Hon'ble Supreme Court in Civil Appeal No. (s). 6745-6749 of 2021 (M/s. Newtech Promoters & Developers Pvt. Ltd. Vs. State of U.P. & others) dated 11.11.2021 regarding terms of the contract to the effect that promoter cannot shirk from the responsibilities/liabilities under the and the Contractual terms do not have an overriding effect to the retrospective applicability of the authority under the provisions of the. The issue no. (2) is answered against the Lucknow Development Authority.

12. Issue No. (3): Issue no. 3 requires us to examine as to whether the project in question of the LDA/appellant is delayed.

12.1. From the perusal of pleadings and record, it is evident that the LDA launched a scheme of multistoried residential apartment known as "Smriti Apartment". The respondents submitted an application for allotment of the residential unit and in pursuance of the same they were allotted a residential unit. The appellant issued an allotment letter dated 15.11.2011 for unit bearing Flat No. A/1701/A-1.

12.2. As per Clause 2.4 of the Brochure, the possession of the flat was proposed to be handed over to the allottee within 24 months i.e. 12.06.2013. As per the argument of learned counsel for the appellant, the Completion Certificate of the project was issued by the competent authority on 04.02.2020 and the sale deed of the flat was executed by the appellant in favour of the respondent on 05.06.2020, while the physical possession has not yet been handed over despite the respondent has already deposited more than the estimated cost of the unit till 2012.

12.3. As per clause 2.4 of the Brochure of the project and the allotment letter the possession of the flat was proposed to be given within 24 months and as the flat was allotted vide allotment letter dated 15.11.2011, therefore, the appellant was required to offer possession by 14.11.2013 and the appellant cannot be permitted to take stand that on the ground of proposed possession within 24 months the allottee can be made to wait indefinitely.

12.4. Though the proposed period of completion of the project is 24 months and there will always be some variation in the actual time, but an allottee cannot be made to wait indefinitely for handing over of the possession merely on the ground that the time specified is an estimated period. We are of the view that the possession ought to have been given within 24 months + a month or so required for final finishing.

12.5. The analysis of UP RERA in issue no. 2 framed by it, reveals that UP RERA misread the provisions of Clause 2.4 of the brochure and wrongly relied on the judgment of Hon'ble Supreme Court in the case of M/s. Fortune Infrastructure Vs. Trevor Dlima & Ors. while observing that as per clause 2.4 of the brochure, the project was to be completed within 24 months and since no date of possession has been mentioned in the brochure, therefore, there is no question of delay, whereas in para 5.7 of the appeal the appellant itself mentioned Clause 2.4 of the brochure in which it is mentioned that the possession of the flat is proposed to be given by the authority within 24 months.

12.6. In view of the above, we hold that there is delay of about 6 years and 6 months in making offer of possession by the appellant to the respondent. Issue no. (3) is decided accordingly.

13. Issue No. (4) is that whether the appellant is entitled for interest and/or compensation on account of delayed possession under the scheme of the Act, 2016 and whether the rate of interest granted by the Regulatory Authority is in accordance with the provisions of the Act 2016, Rule 2016

13.1. Section 18 (1) of theclearly provides that if an Allottee wishes to withdraw from the Project on the ground that the Promoter is unable to give possession in accordance with the Agreement for Sale within the date specified therein, then the Promoter shall return the amount received from the Allottee in respect of that property with interest and compensation, on the Allottees' demand. The power of exercising the option of either staying in the Project or for withdrawing from it lies only with the Allottees under the provisions of Section 18 (1) of the. Further, Section 19(4) of the Act 2016 gives right to the allottees to claim refund along with interest and/or compensation in case the Promoter fails to give possession of the apartment in accordance with the terms and conditions of Agreement for sale.

13.2. The Hon'ble Bombay High Court in the case of Neelkamal Realtors Suburban Pvt. Ltd. And others Vs. Union of India (2018)1 Bom R 558 observed that the requirement to pay interest is not a penalty as the payment of interest is compensatory in nature in the light of the delay suffered by the allottee who has paid for his apartment but has not received possession of it. The obligation imposed on the promoter to pay interest till such time as the apartment is handed over to him is not unreasonable. The interest is merely compensation for use of money.

13.3. Subsequently, in Wg. Cdr. Arifur Rahman Khan & Others Vs. DLF Southern Homes Pvt. Ltd., reported in affirming the view taken in the Judgment in Pioneer's case the Hon'ble Supreme Court held that the term of the agreement authored by the Developer does not maintain a level platform between the Developer and the flat purchaser. The stringent terms imposed on the flat purchaser are not in consonance with the obligation of the Developer to meet the timelines for construction and handing over possession, and do not reflect an even bargain. The failure of the Developer to comply with the contractual obligation to provide the flat within the contractually stipulated period, would amount to a deficiency of service. Given the one-sided nature of the Apartment Buyer's Agreement, the consumer fora had the jurisdiction to award just and reasonable compensation as an incident of the power to direct removal of deficiency in service.

13.4. The Hon'ble Supreme Court, while dealing with the provisions of Section 18 of the Act, 2016, in the case of M/S Imperia Structures Ltd. Vs. Anil Patni and another, Civil Appeal Nos. 3581-3590 of 2020, decided on 02.11.2020, vide para 23, was pleased to observe that the right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed and the proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the Project. In that case he is entitled to and must be paid interest for every month of delay till the handing over of the possession. It is upto the allottee to proceed either under Section 18(1) or under proviso to Section 18(1).

13.5. The Hon'ble Supreme Court in the case of Bangalore Development Authority versus Syndicate Bank (2007)6 SCC 711 [LQ/SC/2007/738] in the matter of self financing scheme while laying down principles for delay in the delivery of possession was pleased to observe that if some statute steps in and creates any statutory obligation on the part of development authority in the contractual field, the matter will be governed by the provisions of that statute. The relevant portions of paras 10, 10(a) and 10(b) are being extracted hereinbelow:-

"10. Where a Development Authority forms layouts and allots plots/flats (or houses) by inviting applications, the following general principles regulate the granting of relief to a consumer (applicant for allotment) who complains of delay in delivery or non-delivery and seeks redressal under the Consumer Protection Act, 1986 ('Act' for short) - [vide : Lucknow Development Authority vs. M.K. Gupta 1994 (1) SCC 243, [LQ/SC/1993/978] Ghaziabad Development Authority vs. Balbir Singh - 2004 (5) SCC 65, [LQ/SC/2004/373] and Haryana Development Authority vs. Darsh Kumar - 2005 (9) SCC 449, [LQ/SC/2004/794] as also Ghaziabad Development Authority vs. Union of India 2000 (6) SCC 113] [LQ/SC/2000/979] :

(a) Where the development authority having received the full price, does not deliver possession of the allotted plot/flat/house within the time stipulated or within a reasonable time, or where the allotment is cancelled or possession is refused without any justifiable cause, the allottee is entitled for refund of the amount paid, with reasonable interest thereon from the date of payment to date of refund. In addition, the allottee may also be entitled to compensation, as may be decided with reference to the facts of each case.

(b) Where no time is stipulated for performance of the contract (that is for delivery), or where time is not the essence of the contract and the buyer does not issue a notice making time the essence by fixing a reasonable time for performance, if the buyer, instead of rescinding the contract on the ground of non-performance, accepts the belated performance in terms of the contract, there is no question of any breach or payment of damages under the general law governing contracts. However, if some statute steps in and creates any statutory obligations on the part of the development authority in the contractual field, the matter will be governed by the provisions of that statute.

...................................................."

13.6. The Hon'ble Supreme Court in Civil Appeal No. 6051/2002 (Ghaziabad Development Authority Vs. Shakuntala Rohatgi), decided on 04.03.2009, placed reliance on the case of Bangalore development authority versus syndicate Bank (supra).

13.7. After promulgation the Real Estate (Regulation and Development) Act, 2016 and the Real Estate (Regulation and Development) Rules, 2016, various issues relating to the real estate falls in the domain of the same and the provisions of the Act, 2016 have also been upheld by the of Hon'ble Bombay High Court in Neelkamal Realtors Suburban Pvt. Ltd. Vs. Union of India (2018) 1 AIR Bom R 558 and subsequently by the Hon'ble Supreme Court in Civil Appeal No. (s). 6745-6749 of 2021 (M/s. Newtech Promoters & Developers Pvt. Ltd. Vs. State of U.P. & others) decided on 11.11.2021.

13.8. U.P. Government framed "Uttar Pradesh Real Estate (Regulation and Development) (Agreement for Sale/Lease) Rules, 2018" (hereinafter referred to as Rules, 2018), wherein under Rule 9.2(ii) and 9.3(i), the rate of interest payable by the promoter or by the allottee respectively are defined in case of default by either of the party. These Rules are extracted as follows:-

Rule 9.2(ii)

The Allottee shall have the option of terminating the Agreement in which case the Promoter shall be liable to refund the entire money paid by the Allottee under any head whatsoever towards the purchase of the apartment, along with interest at the rate equal to MCLR (Marginal Cost of Lending Rate) on home loan of State Bank of India + 1% unless provided otherwise under the Rules, within forty-five days of receiving the termination notice:

Provided that where an Allottee does not intend to withdraw from the Project or terminate the Agreement, he shall be paid, by the Promoter, interest at the rate prescribed in the Rules, for every month of delay till the handing over of the possession of the Apartment/Plot, which shall be paid by the Promoter to the Allottee within forty-five days of it becoming due.

Rule 9.3

The Allottee shall be considered under a condition of Default, on the occurrence of the following events:

Rule 9.3(i)

In case the Allottee fails to make payments for 2(two) consecutive demands made by the Promoter as per the Payment Plan annexed hereto, despite having been issued notice in that regard the Allottee shall be liable to pay interest to the promoter on the unpaid amount at the rate equal to MCLR (Marginal Cost of Lending Rate) on home loan of State Bank of India + 1% unless provided otherwise under the Rules. The Promoter must not be in default to take this benefit.

13.9. On examination, we find that these Rules-2018 notified by U.P. Government are in consonance with the definition of interest as provided in Section 2(za) of the Act, in as much as that the interest chargeable from the allottee by the promoter, in case of default in payment as per demand, is equal to the rate of interest which the promoter is liable to pay to the allottee, in case of default/delayed possession on the part of promoter.

13.10. We have come across various orders of the Regulatory Authority wherein it had granted interest at the rate of MCLR+1% per annum in case of delayed projects and had an occasion to examine the issue of rate of interest at MCLR+1% awarded by the Regulatory Authority in Appeal No. 295 of 2019 (U.P. Avas Vikas Parishad Vs. Devesh Kumar Tiwari) decided on 20.02.2020 and held as under:--

"We feel that this imbalance is on account of the fact that the buyer/allottee has much less bargaining power as compared to the seller in the real estate market and therefore the buyers/allottees have no choice but to sign on such "dotted line", "one sided, unfair and unreasonable" terms and conditions/Agreements. We are therefore of the view that the rate of MCLR +1%, as prescribed by the Government and as being ordered by the Regulatory Authority, be payable from the date of deposit of money in case the allottee wishes to withdraw from the project; and from the specified/expected date of possession in case the allottee wishes to stay in the project, would balance the equities and are just and fair and will fall within the term "interest at such rate as may be prescribed" as used in Sections 12, 18 & 19......... "

13.11. It is important to mention herein that the Hon'ble Supreme Court in Civil Appeal No. 4910-4941/2019 DLF Homes Panchkula Pvt. Ltd. Versus D.S. Dhanda etc. etc. while examining the issue of compensation, was pleased to observe as under;-

"If compensation comprises of two parts, (i) by way of interest on the deposited amount from the assured date (milestone date) of completing construction and handling over possession to the actual date of handling over possession, and, (ii) lumpsum amount, we find nothing wrong in it. We do not agree with the builder co.'s contentions that interest on the deposited amount should not be provided since it is not a case of refund but a case of delay in possession. The interest on the deposited amount has to be viewed in the light of the purpose for which it is intended. It is but a way of computing compensation for delay in possession that is commensurate with the amount deposited by the complainant, and here it has been computed after adopting a milestone date as per the builder co.'s own (unfair and deceptive) letter of 05.06.2013. There can be and is no question of not agreeing to an endorsing the award of interest from the said milestone date. Here we may however add that the rate of interest also cannot be arbitrary or whimsical, some reasonable and acceptable rationale has to be evident, subjectivity has to be minimized, a logical correlation has to be established. Albeit detailed arithmetic or algebra is not required. Logical (to the extent feasible) objective parameters should be adopted. Rounding off simplification etc. to make the computation doable could be adopted. We feel it appropriate that, considering that the subject units in question are dwelling units, in a residential housing project, the rate of interest for house building loan for the corresponding period in a scheduled nationalized bank (take, State Bank of India) would be appropriate and logical, and, if 'floating'/varying/different rates of interest were/are prescribed, the higher rate of interest should be taken for this instant computation."

It is our considered view that drawing light from the Rules of 2018, and the fact that often an allottee/buyer has to supplement his savings by taking loan, the interest at MCLR+1 percent will balance the equities and is in line with the word and spirit of the and can be taken as "interest at such rate as may be prescribed" as mentioned in Sections 12, 18 and 19 of the Act, till the rate of interest for the purpose is notified by the State Government.

13.12. On the basis of aforesaid analysis the issue no. (4) is decided in affirmative in favour of the appellant.

14. Issue no. (5) is as to whether it is necessary and mandatory for the Promoter to have first Completion Certificate (CC) and Occupation Certificate (OC) under the provisions of the of 2016 and Rules of 2016 read with the U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act 2010 before offering possession as well as asking the allottee to settle the account and satisfy the final demand

14.1. In order to appreciate the issue, we examine Section 2(q) and Section 2(zf) of theof 2016, which defines Completion & Occupancy Certificate, the same are extracted as follows:-

"Section 2:- Definitions - In this Act, unless the context otherwise requires,

....................................................................................

...........................................................................

"Section 2 (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 (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;"

14.2. On examination of the provisions of Section 2 (q) and Section 2(zf), we find that completion certificate is basically a certificate issued by the competent authority certifying that the Real Estate Project has been developed according to the sanctioned plan, lay out plan and specifications, as approved by the competent authority under the local laws. On the other hand, the occupancy certificate is 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 etc.

14.3. Similarly, Section 4(5) of the U.P. Apartments Act, 2010 prescribes for Completion Certificate, which reads as follows:-

"Section 4(5) of the U.P. Apartments Act, 2010:-An apartment may be transferred by the promoter to any person only after obtaining the completion certificate from the prescribed sanctioning authority concerned as per building bye-laws. The completion certificate shall be obtained by promoter from prescribed authority [within the period specified for completion of the project in the development permit or the building permit as the case may be] Provided that if the construction work is not completed within the stipulated period, with the permission of the prescribed authority;

Provided further that if the completion certificate is not issued by the prescribed sanctioning authority within three months of submission of the application by the promoter complete with all certificates and other documents required, the same shall be deemed to have been issued after the expiry of three months.

Explanation: For the purposes of this sub-section "completion" means the completion of the construction works of a building as a whole or the completion of an independent block of such building, as the case may be."

14.4. Section 4(5) of the U.P. Apartments Act 2010 clearly lays down that an apartment may be transferred by the Promoter to any person (allottee) only after obtaining the C.C. from the prescribed sanctioning authority concerned as per building by-laws. The C.C. is required to be obtained by the Promoter, meaning thereby that Allottee has no role to play in obtaining C.C. from the prescribed authority. A Promoter is required to first obtain C.C./O.C. from the prescribed authority, only thereafter register conveyance deed of the real estate in favour of the Allottee(s) and a legal & habitable possession can be offered to the Allottees.

14.5. The issue of offering handing over possession prior to obtaining occupancy certificate was also examined by the Hon'ble Supreme Court in Civil Appeal Nos. 1232 and 1443-1444 of 2019 R.V. Prasannakumaar and ors. Vs. Mantri Castles Pvt. Ltd. and ors. decided on 11.02.2019 wherein it has been observed that possession cannot be handed over prior to obtaining occupancy certificate.

14.6. In view of the aforesaid analysis, we are of the considered view that as per the provisions of the U.P. Apartments Act, 2010 read with the provisions of Act, 2016 a Promoter is required to offer legal and habitable possession to the allottee only after obtaining C.C./O.C. and ask for clearing dues by raising final demand. Issue no. (5) is answered accordingly.

15. The Issue No. 6 is regarding whether the complainant can claim interest and/or compensation for delayed possession of the Unit/Apartment/Flat by the appellant after execution of the conveyance deed and taking over possession of the Unit

15.1. As per the submission of learned counsel for the respondent, the conveyance deed was executed on 25.08.2022 by the appellant in favour of the respondent, whereas, as per Registration Booklet, the possession of the Unit/Apartment/Flat was to be given to the respondent/complainant in 24 months from the date of allotment i.e. 12.06.2013 and thus possession was given to the allottees/appellants after a delay of about 9 years 2 months.

15.2. The purpose of Section 18(1)(a) is to ameliorate the buyers in real estate sector and balance the rights of all the stake holders.

15.3. Further Section 18 of thedoes not prohibit to the allottee to file the complaint with the Real Estate Regulatory Authority or Adjudicating Officer against the promoter, after taking delayed possession of flat for the violation of the provisions of the and breach of terms of agreement by promoter, seeking for the relief for delayed possession by the promoter. Also, the does not provide any limitation clause for filing of complaint by the allottee with the Real Estate Regulatory Authority or Adjudicating Officer against the Promoter to claim relief for violation and contravention of provisions of the by him. It is the legitimate right of the allottee to file complaint against the promoter even after the possession of the flat/house/plot is given to him if there is violation of the provisions of the by the Promoter. The provisions of the seek to protect the allottees and simplify the remedying of wrongs committed by a Promoter. The intention of the is to bring the complaints of allottees before one Authority and simplify the process.

15.4. The issue regarding claim for compensation of an allottee for delay in handing over possession of the Unit/Apartment/Flat against promoter/builder after execution of conveyance deed and taking over possession, is no more res integra. The Hon'ble Supreme Court in the case of Wg. Cdr. Arifur Rahman Khan and Aleya Sultan and others Versus DLF Southern Homes Pvt. Ltd. (now known as BEGUR OMR Homes Pvt. Ltd. and others, (reported in) while examining the issue whether a flat buyer who seeks to espouse a claim against the developer for delayed possession can as a consequence of doing so be compelled to defer the right to obtain a conveyance to perfect their title, was pleased to observe that it would be manifestly unreasonable to expect that in order to pursue a claim for compensation for delayed handing over of possession, the purchaser must indefinitely defer obtaining a conveyance of the premises purchased or, if they seek to obtain a Deed of Conveyance to forsake the right to claim compensation. Paras 34, 35 and 36 of the aforesaid judgment read as under:-

"34. The developer has not disputed these communications. Though these are four communications issued by the developer, the appellants submitted that they are not isolated aberrations but fit into a pattern. The developer does not state that it was willing to offer the flat purchasers possession of their flats and the right to execute conveyance of the flats while reserving their claim for compensation for delay. On the contrary, the tenor of the communications indicates that while executing the Deeds of Conveyance, the flat buyers were informed that no form of protest or reservation would be acceptable. The flat buyers were essentially presented with an unfair choice of either retaining their right to pursue their claims (in which event they would not get possession or title in the meantime) or to forsake the claims in order to perfect their title to the flats for which they had paid valuable consideration. In this backdrop, the simple question which we need to address is whether a flat buyer who seeks to espouse a claim against the developer for delayed possession can as a consequence of doing so be compelled to defer the right to obtain a conveyance to perfect their title. It would, in our view, be manifestly unreasonable to expect that in order to pursue a claim for compensation for delayed handing over of possession, the purchaser must indefinitely defer obtaining a conveyance of the premises purchased or, if they seek to obtain a Deed of Conveyance to forsake the right to claim compensation. This basically is a position which the NCDRC has espoused. We cannot countenance that view.

35. The flat purchasers invested hard earned money. It is only reasonable to presume that the next logical step is for the purchaser to perfect the title to the premises which have been allotted under the terms of the ABA. But the submission of the developer is that the purchaser forsakes the remedy before the consumer forum by seeking a Deed of Conveyance. To accept such a construction would lead to an absurd consequence of requiring the purchaser either to abandon a just claim as a condition for obtaining the conveyance or to indefinitely delay the execution of the Deed of Conveyance pending protracted consumer litigation.

36. It has been urged by the learned counsel of the developer that a consequence of the execution of the Deed of Conveyance in the present case is that the same ceases to be a transaction in the nature of "supply of services" covered under the CP Act 1986 and becomes a mere sale of immovable property which is not amenable to the jurisdiction of Consumer Fora. In Narne Construction (P) Ltd. v. Union of India, this Court distinguished between a simple transfer of a piece of immovable property and housing construction or building activity carried out by a private or statutory body falling in the category of "service" within the meaning of Section 2 (1) (o) of the CP Act 1986. This Court held that:

"8. Having regard to the nature of transaction between the appellant Company and its customers involved much more than a simple transfer of a piece of immovable property it is clear the same constitutes "service" within the meaning of the. It was not the case that the appellant Company was selling the given property with all its advantages and/or disadvantages on "as is where is" basis, as was the position in UT Chandigarh Admn v. Amarjeet Singh. It is a case where a clear-cut assurance was made to the purchasers as to the nature and extent of development that would be carried out by the appellant Company as a part of package under which a sale of fully developed plots with assured facilities was made in favour of the purchasers for valuable consideration. To the extent the transfer of site with developments in the manner and to the extent indicated earlier was a part of the transaction, the appellant Company has indeed undertaken to provide a service. Any deficiency or defect in such service would make it accountable before the competent Consumer Forum at the instance of consumers like the respondents."

The developer in the present case has undertaken to provide a service in the nature of developing residential flats with certain amenities and remains amenable to the jurisdiction of the Consumer Fora. Consequently, we are unable to subscribe to the view of the NCDRC that flat purchasers who obtained possession or executed Deeds of Conveyance have lost their right to make a claim for compensation for the delayed handing over of the flats."

15.5. In view of the aforesaid judgment of Hon'ble Supreme Court it can safely be said that a home buyer does not lose his right to claim compensation for the delay in possession even after execution of the conveyance deed and taking possession of the Unit/Apartment/Flat booked by him. The issue no. (6) is decided accordingly.

16. Vide Issue no. (7) we are required to examine as to whether under the scheme of the Real Estate (Regulation & Development) Act 2016 and U.P. Real Estate (Regulation & Development) Rules 2016 there is a limitation prescribed for filing complaint from the date of cause of action.

16.1. Section 31 of the Act 2016 provides for filing of complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of the Act 2016 or the rules and regulations made thereunder, against any promoter, allottee or real estate agent, as the case may be. Further Rule 33 of the U.P. Real Estate (Regulation and Development) Rules 2016 provides the manner of filing a complaint with the Regulatory Authority and the manner of holding an inquiry by the Regulatory Authority. Similarly Rule 34 of the Rules of 2016 provides the manner of filing a complaint with the adjudicating officer and the manner of holding an inquiry by the adjudicating officer.

16.2. On thorough examination of the aforesaid provisions we could not find any limitation prescribed for filing a complaint either before the Regulatory Authority or before the Adjudicating Officer from the date of cause of action, whereas Section 44(2) of the Act 2016 prescribes the period of 60 days for filing an appeal from the date on which a copy of the direction or order or decision made by the Authority or the adjudicating officer is received by the appropriate Government or the competent authority or the aggrieved person.

16.3. Thus, we are of the considered view that there is no limitation prescribed under the Act 2016 read with Rules 2016 for filing a complaint before the Regulatory Authority or the Adjudicating Officer against any violation or contravention of the provisions of the Act 2016 or the rules and regulations made thereunder, against any promoter, allottee or real estate agent, as the case may be. Issue no. (7) is answered accordingly.

17. Issue no. (8) is as to whether the impugned order passed by the single member of the Regulatory Authority is against the provisions of Section 21 of the Act 2016 and is liable to be set aside being wholly bad and unsustainable in law.

17.1. The issue regarding passing the order by single member of the Authority is no more res integra in view of the judgment of Hon'ble Supreme Court in Civil Appeal No(s). 6745-6749 of 2021(M/S Newtech Promoters and Developers Pvt. Ltd. Vs. State of U.P. & others etc.) decided on 11.11.2021 wherein vide question no. 3 the Hon'ble Supreme Court examined the issue "Whether Section 81 of theauthorizes the authority to delegate its powers to a single member of the authority to hear complaints instituted under Section 31 of the" and after examining the scheme of the vide paras 119 and 120, while answering the same, was pleased to hold that the power of delegation under Section 81 of theby the authority to one of its member for deciding applications/complaints under Section 31 of theis not only well defined but expressly permissible and that cannot be said to be dehors the mandate of law. Issue no. (8) is answered accordingly.

18. On the basis of the aforesaid analysis, we do not find any force in the submission and grounds pressed by the learned counsel for the appellant to challenge the impugned order. Accordingly, the appeal is dismissed.

19. Now the issue to be decided is as to what should be done of the pre-deposit made by the appellant/promoter in compliance of the provisions of Section 43(5) of the.

19.1. The aims and objects of the provide for regulation and promotion of the real estate sector in an efficient and transparent manner and to protect the interests of the consumers in real estate sector. Proviso to Section 43(5) of thespecifically provides that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained without the promoter first having deposited with the Appellate Tribunal at least 30% of the penalty, or such higher percentage as determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him before the said appeal is heard. The intent of the legislature is quite clear from the wording of proviso to Section 43(5) of thethat the interest of the consumers i.e. allottees/buyers be protected.

The intent of the legislature in laying down the provision of pre-deposit of the amount of penalty or any other amount payable to the allottee by the promoter before the appeal can be heard in the Appellate Tribunal, has been elucidated by the Hon'ble Apex Court in paragraph 127 of its judgment in the Civil Appeal Numbers 6745-6749 of 2021 M/s. Newtech Promoters and Developers Pvt. Ltd. Vs. State of UP and others, the same reads as under:-

"127. It may further be noticed that under the present real estate sector which is now being regulated under the provisions of the Act 2016, the complaint for refund of the amount of payment which the allottee/consumer has deposited with the promoter and at a later stage, when the promoter is unable to hand over possession in breach of the conditions of the agreement between the parties, are being instituted at the instance of the consumer/allottee demanding for refund of the amount deposited by them and after the scrutiny of facts being made based on the contemporaneous documentary evidence on record made available by the respective parties, the legislature in its wisdom has intended to ensure that the money which has been computed by the authority at least must be safeguarded if the promoter intends to prefer an appeal before the tribunal and in case, the appeal fails at a later stage, it becomes difficult for the consumer/allottee to get the amount recovered which has been determined by the authority and to avoid the consumer/allottee to go from pillar to post for recovery of the amount that has been determined by the authority in fact, belongs to the allottee at a later stage could be saved from all the miseries which come forward against him."

The Hon'ble Apex Court has clearly held that the legislature in its wisdom intended to ensure that the money which has been computed by the Authority at least must be safeguarded if the promoter intends to prefer an appeal before the Tribunal and in case, the appeal fails at a later stage, it should not be difficult for the consumer/allottee to get the amount recovered which has been determined by the Authority. It is in order to avoid the consumer/allottee to go from pillar to post for recovery of the amount that has been determined by the Authority, that the legislature has in its wisdom laid the condition of pre-deposit by the promoter under Section 43(5) of the.

19.2. Section 40(1) of theof 2016 provides for a mechanism for recovery of interest or penalty or compensation and enforcement of orders etc. of the A.O. or the Regulatory Authority, or the Appellate Tribunal and the same shall be recoverable in such manner as may be prescribed as an arrears of land revenue. The Hon'ble Apex Court vide paragraph 140 in M/s. Newtech Promoters and Developers Pvt. Ltd. Vs. State of UP (supra) was pleased to observe that:-

"140. It is settled principle of law that if the plain interpretation does not fulfill the mandate and object of the, this Court has to interpret the law in consonance with the spirit and purpose of the statute. There is indeed a visible inconsistency in the powers of the authority regarding refund of the amount received by the promoter and the provision of law in Section 18 and the text of the provision by which such refund can be referred under Section 40(1). While harmonizing the construction of the scheme of the with the right of recovery as mandated in Section 40(1) of thekeeping in mind the intention of the legislature to provide for a speedy recovery of the amount invested by the allottee along with the interest incurred thereon is self explanatory. However, if Section 40(1) is strictly construed and it is understood to mean that only penalty and interest on the principal amount are recoverable as arrears of land revenue, it would defeat the basic purpose of the."

As can be seen from the above observations, Hon'ble Supreme Court has held that even the principal amount invested by the allottee can be recovered as arrears of land revenue under Section 40(1) of the. It is further clarified by Hon'ble Supreme Court that the intention of the legislature is to provide a mechanism for early recovery of the amount invested by the allottee along with the interest incurred thereon.

19.3. Rule 23 of the U.P. Real Estate (Regulation and Development) Rules, 2016 provides that subject to the provisions of Section 40(1), the recovery of the amounts due as arrears of land revenue shall be carried out in the manner provided in the local laws. As Rule 23 has been framed under the provisions of Section 40(1) of the Act, the observations of Hon'ble Supreme Court on Section 40(1) shall equally apply to Rule 23 of the Rules 2016.

19.4. Although Section 40(1) of theof 2016 gives powers to the Appellate Tribunal to enforce its decisions, but the Tribunal does not have adequate infrastructure and the required sufficient human resource to determine and certify the amount due from the appellant/promoter to be paid to the respondent/allottee.

It is our considered view that as per provisions of the and as per the observations made by the Hon'ble Apex Court, it is the duty of the Tribunal to arrange to transfer the pre-deposited money to the concerned allottee/consumer in case the promoter's appeal is dismissed. However, since the promoter might not have paid the full payable amount or there being a prospect of some amount having already been recovered from the promoter under execution proceedings at the level of the Authority or AO, it is just and lawful that the Tribunal transfers the amount to the Authority for transferring the same to the allottee/consumer after due diligence at its end and to recover any additional amount which could be due to be paid by the promoter; or return to the promoter any amount that could be in excess of the entitlement of the allottee/consumer.

The calculation of the exact amount due to be paid to the respondent/allottee normally is to be determined up to the date of actual payment. As the facts and figures are available with the Regulatory Authority, which is executing its or A.O.'s original order, therefore, due diligence is required while calculating the amount payable, interest thereon, as well as verification of the payments made by the allottee from time to time, etc.

19.5. In the instant case, this Tribunal while upholding the order of Regulatory Authority dated 10.02.2020, dismissed the appeal of the promoter, accordingly, we direct the Registry to transfer the entire amount deposited by the promoter under the provisions of Section 43(5) of theto the concerned account of the U.P. Real Estate Regulatory Authority (U.P. RERA). Further, we direct the Regulatory Authority/Adjudicating Officer to dispose of this amount during the execution proceedings in accordance with his order dated 10.02.2020 passed in Complaint no. ADJ/LKO162/10/0807/2019 (Anoop Kumar Srivastava & Anr. Vs. Lucknow Development Authority).