M/s Imperia Structures Ltd. v. Anil Patni

(ii) The Promoter shall deposit seventy percent of the amount to be realized from the allottees by the Promoter in a separate account to be maintained in a schedule bank to meet exclusively the cost of land and construction purpose as per provision of Section 4 (2) (L) (D);

(iii) The registration shall be valid for a period commencing from 17.11.2017 to 31.12.2020;

(iv) The Promoter shall offer to execute and register a conveyance deed in favour of the allotees or the association of the allottees, as the case may be, of the apartment, plot or building as the case may be, or on the common areas as per provision of section 17 of the Act;

(v) The Promoter shall take all the pending approvals from various competent authorities on time;

(vi) The Promoter shall pay all outstanding payment i.e. land cost, construction cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities payable to competent authorities, bank and financial institutions which are related to the project until he transfers the physical possession of the real estate project to the allottees or the associations of allottees, as the case may be;

(vii) The Promoter shall be responsible for providing and maintaining the essential services, on reasonable charges, till the taking over of the maintenance of the project by the Municipal Corporation, Gurugram or any other local authority/Association of the Allottees, as the case may be;

(viii) The Promoter shall not accept a sum more than ten percent of the cost of the apartment, plot or building as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person and register the said agreement for sale, under any law for the time being in force;

(ix) The Promoter shall adhere all the terms and conditions of this registration and license, sanctioned plans and other permissions issued by Competent Authorities under the provision of any other law for the time being in force as applicable to the project. In case any deficiency in fee is found at later stage and the same shall be recoverable from the promoter/owner accordingly.

(x) The promoter shall return the amount with interest in case, allotee wishes to withdraw from the project due to discontinuance of promoter’s business or promoter fails to give possession of the apartment/plot in accordance with terms and conditions of agreement for sale in terms of subsection(4) of Section-19. The promoter shall return the entire amount with interest as well as the compensation payable. The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India highest marginal cost of lending rate plus two percent. The promoter shall adhere the provisions of The Real Estate (Regulation and Development) Act, 2016 and its Rules 2017 issued by the State Government.

(xi) The promoter shall adopt the model agreement for sale (Annexure-A) of the Haryana Real Estate (Regulation and Development) Rules, 2017 at the time of booking from the prospective allottees.

(xii) The Promoter shall, upon receiving his Login Id and password under clause(a) of sub-section (1) or under sub-section 92) of section 5, as the case may be, create his web page on the website of the Authority and enter all details of the proposed project as provided under sub-section (2) of section 4, including the followings:a) Details of the registration granted by the authority; b) Quarterly up-to-date list of number and type of apartments for plots, as the case may be, booked; c) Quarterly up-to-date the list of number of garages/covered parking lot booked; d) Quarterly up-to-date the list of approvals taken and the approvals which are pending subsequent to commencement certificate; e) quarterly up-to-date status of the project; and f) such other information and documents as may be specified by the regulations made by the authority.

(xiii) The Promoter shall be responsible to make available to the allottees, the following information at the time of the booking and issue of allotment letter:a) Sanctioned plans, layout, along with specifications, approved by the competent authority and other information as prescribed in Rule 14 of 2017 framed under the provision of the Real Estate (Regulation and Development) Act 2016 and the same shall be displayed at the site or such other place as may be specified by the regulations made by the Authority.”

8. In its response dated 18.01.2018 to the aforestated Consumer Case No.3011 of 2017, the Appellant challenged the jurisdiction of the Commission inter alia, on the ground that the apartment having been booked for commercial purposes, the Respondents would not come within the definition of “the consumer” under Section 2(d) of the CP Act. No reference was however made to the fact that the Project had been registered under the RERAAct. It was submitted:-

10. Consumer Case No.3011 of 2017 was allowed by the Commission by its judgement and order dated 12.09.2018. It was observed:-

12. It is significant to mention that in the afore-noted letter there is an admission by the Developer that the construction is still not completed. Additionally, even the specific date of delivery of possession has not been mentioned anywhere either in the Written Version or in the Affidavit or even in the letter dated 03.04.2017 which the Counsel is relying upon.” Concluding that the Appellant was deficient in rendering service, the Commission granted relief to the Respondents in following terms:-

11. Similarly, all other complaints were allowed by the Commission granting relief of refund of the amounts deposited by each of the Complainants with simple interest @ 9% per annum from the respective dates of deposits alongwith Rs.50,000/- towards costs. It was also directed that the amounts be deposited within four weeks, failing which the amounts would carry interest @ 12% per annum.

12. The Appellant being aggrieved preferred the instant appeals on 14.03.2019. By way of Additional Documents, a copy of the letter dated 17.11.2017 was placed on record. An order passed by Haryana Authority, Gurugram on 17.01.2019 in a complaint preferred by one Himanshu Giri was also placed on record. The directions issued in said order were to the following effect:-

13. The appeal memo also did not make any reference to the fact that the Project had been registered under the RERAAct. In the leading appeal, following assertions were made in the list of dates and events:- “2011-2017 The Appellant was unable to hand over the possession to the Respondents within the stipulate time as stipulated in Clause 10.[1] due to reasons beyond control of the Appellant viz., due to severe shortage of contractual labourers and delay caused in obtaining statutory requisite permissions for carrying on the construction of said flats, failed to deliver possession of the subject flats to the Respondents within the prescribed time limit. One of the grounds raised in the appeal memo was as under:-

14. After issuance of notice on 05.04.2019, it was submitted by the Respondents that the Appellant had partially refunded the amounts in terms of the directions of the Commission. Following details indicate that in four out of ten cases, partial refund was made. “ S.No. Consumer Case Number Amount Directed to be Refunded by Appellant to Complainant(s) (In Rupees) Amount Refunded by Appellant (In Rupees)

1. Consumer Case No.3011 of 2017 Rs.63,53,625/- 10,00,000/-

2. Consumer Case No.3012 of 2017 Rs.55,35,223/- 8,00,000/-

3. Consumer Case No.3013 of 2017 Rs.79,45,547/- NIL

4. Consumer Case No.3014 of 2017 Rs.75,85,280/- NIL

5. Consumer Case No.3015 of 2017 Rs.56,39,495/- NIL

6. Consumer Case No.3016 of 2017 Rs.65,26,929/- NIL

7. Consumer Case No.3017 of 2017 Rs.65,76,497/- 8,00,000/-

8. Consumer Case No.3018 of 2017 Rs.56,76,600/- 8,00,000/-

9. Consumer Case No.3019 of 2017 77,46,851/- NIL

10. Consumer Case No.3020 of 2017 Rs.1,02,66,866/- NIL ” Refund of Rs.10,00,000/- to the Respondents, was made on 27.03.2019 i.e. even after filing of the leading appeal.

15. Mr. Vikas Singh, learned Senior Advocate for the Appellant submitted inter alia:a) The Appellant had completed Phase-I of the Project well-intime and Phase-II of the Project concerning about 437 allottees was the matter in issue. Out of these 437 allottees, only in 59 cases complaints were filed under the CP Act, while Mr. Himanshu Giri had approached authorities under the RERAAct. A majority of the allottees had thus reposed faith in the Appellant. b) The Appellant had offered alternative accommodation to all the allottees. But the offer was rejected by all the Complainants which was indicative that the apartments were booked for investment purposes. c) The Complainants were not “Consumers” within the meaning of the CP Act as the apartments were booked merely for profit motive. d) Once the RERA Act came into force, all questions concerning the Project including issues relating to construction and completion thereof, would be under the exclusive control and jurisdiction of the authorities under the RERA Act. The Commission, therefore, ought not to have entertained the Consumer Cases. e) The Registration Certificate dated 17.11.2017 being valid upto 31.12.2020, the Appellant could not be said to have delayed the construction and consequently, there could be no finding that there was deficiency on part of the Appellant. f) The order passed in the case of Himanshu Giri had directed payment of interest @ 10.75% per annum without issuing any direction for refund of money. The approach so adopted would be conducive to completion of construction and at the same time would balance the interest of the allottees. g) Considering the provisions of the RERA Act and the fact that the registration being valid upto 31.12.2020, the orders passed by the Commission be set aside and instead the Complainants be granted interest @ 10.75% p.a. on the amounts deposited; whereby the Project would be completed without putting the Appellant under any financial strain and at the same time the relief in the nature of interest on investment would also be accruable to the allottees.

16. Ms. Priyanjali Singh, learned Advocate for the Respondents as well as for some of the other Complainants submitted:a) All the Complainants had purchased only one residential apartment each for self-use. They had taken home loans, except the Complainant in Consumer Case No.3020 of 2017 who after his retirement as Group Captain from the Indian Air Force had used all his retirement dues to book the apartment. Therefore, the issue whether the Complainants satisfied the requirements of being “Consumers” under the provisions of the CP Act was rightly decided in favour of the Complainants. b) The question whether the delay occurred due to force majeure events was also rightly answered in favour of the Complainants and no reasonable explanation was available on record to dislodge that finding. c) In the backdrop of these findings, the Commission was justified in accepting the claim of the Complainants. In fact, the award of interest @ 9% per annum was at a lower level. d) At no stage, any plea was taken before the Commission that the Project was registered under the RERA Act or about the effect of the RERA Act. No such plea was taken even in the appeal memo. Consequently, it would not be open to the Appellant to raise any submissions about the applicability of the RERAAct. e) In any case, as construed by this Court consistently, the remedy afforded by the CP Act would be an additional remedy to a consumer and said legal position remained unchanged even after the enactment of the RERAAct.

17. Three Complainants viz. (a) Chandra Shekhar; (b) Rajat Verma; and (c) Krishan Kumar appeared in person and advanced submissions. It was submitted, inter alia, that the decision of the Commission did not call for any interference and that they be refunded the entire amount with 12% interest instead of 9% as awarded by the Commission.

18. At the outset, we must deal with two factual issues. It was concluded by the Commission that; (i) all the Complainants were ‘Consumers’ within the meaning of the Act and that; (ii) there was delay on part of the Appellant in completing the construction within time. The stand taken by the Appellant at various stages, itself acknowledged that there was delay but the Appellant tried to rely on certain events as mentioned in ground (c) quoted hereinabove. In our view, the conclusions drawn by the National Commission in relation to these issues are absolutely correct and do not call for any interference.

19. Before we deal with the issues about the applicability and effect of the RERA Act as well as the effect of registration of the Project under the RERA Act, the relevant provisions of the CP Act and the RERA Act may be extracted:- A] The Consumer Protection Act, 1986 The CP Act was enacted, inter alia, “to provide for better protection of the interest of the consumer”; to promote and protect the rights of consumers such as “the rights to seek redressal against unfair trade practices or unscrupulous exploitation of consumers”. Sections 3, 12(4) and 24 were to the following effect: -

B] The Real Estate (Regulation and Development) Act, 2016 Sections 2(d), 2(zg), 2(zj) and 2(zk) define expressions “Allottee”, “Person, “Project” and “Promoter” respectively. Sections 3, 4, 5, 18, 19, 22, 46, 71, 79, 88 and 89 of the RERAAct are as under:-

20. The question whether the remedies available to the consumers under the provisions of the CP Act would be additional remedies, was considered by this Court in some cases, the notable cases being:i) In Secretary, Thirumurugan Cooperative Agricultural Credit Society vs. M. Lalitha (dead) through LRs. and others, this Court observed:-

21. It has consistently been held by this Court that the remedies available under the provisions of the CP Act are additional remedies over and above the other remedies including those made available under any special statutes; and that the availability of an alternate remedy is no bar in entertaining a complaint under the CP Act.  (2007) 4 SCC 579  (1996) 6 SCC 385  (2000) 5 SCC 294  (2011) 10 SCC 316

22. Before we consider whether the provisions of the RERA Act have made any change in the legal position stated in the preceding paragraph, we may note that an allottee placed in circumstances similar to that of the Complainants, could have initiated following proceedings before the RERAAct came into force. A) If he satisfied the requirements of being a “consumer” under the CP Act, he could have initiated proceedings under the CP Act in addition to normal civil remedies. B) However, if he did not fulfil the requirements of being a “consumer”, he could initiate and avail only normal civil remedies. C) If the agreement with the developer or the builder provided for arbitration:i) in cases covered under Clause ‘B’ hereinabove, he could initiate or could be called upon to invoke the remedies in arbitration. ii) in cases covered under Clause ‘A’ hereinabove, in accordance with law laid down in Emaar MGF Ltd and anr. Vs. Aftab Singh, he could still choose to proceed under the CP Act.

23. In terms of Section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed  (2019) 12 SCC 751 by the date specified in the agreement, the Promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to withdraw from the Project. Such right of an allottee is specifically made “without prejudice to any other remedy available to him”. 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. 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). The case of Himanshu Giri came under the latter category. The RERA Act thus definitely provides a remedy to an allottee who wishes to withdraw from the Project or claim return on his investment.

24. It is, therefore, required to be considered whether the remedy so provided under the RERA Act to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of the RERA Act bar consideration of the grievance of an allottee by other fora.

25. Section 79 of the RERA Act bars jurisdiction of a Civil Court to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered under the RERA Act to determine. Section 88 specifies that the provisions of the RERA Act would be in addition to and not in derogation of the provisions of any other law, while in terms of Section 89, the provisions of the RERA Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force.

26. On plain reading of Section 79 of the RERA Act, an allottee described in category (B) stated in paragraph 22 hereinabove, would stand barred from invoking the jurisdiction of a Civil Court. However, as regards the allottees who can be called “consumers” within the meaning of the CP Act, two questions would arise; a) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CP Act; and b) whether there is anything inconsistent in the provisions of the CP Act with that of the RERAAct.

27. In Malay Kumar Ganguli vs. Dr. Sukumar Mukherjee, it was held by this Court:- “The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provisions of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court. (See Bharat Bank Ltd. V. Employees and Nahar Industrial Enterprises Ltd. vs. Hong Kong & Shanghai Banking Corpn. On the strength of the law so declared, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint.

28. Proviso to Section 71(1) of the RERA Act entitles a complainant who had initiated proceedings under the CP Act before the RERA Act came into force, to withdraw the proceedings under the CP Act with the permission of the Forum or Commission and file an appropriate application before the adjudicating officer under the RERA Act. The proviso thus gives a right or an option to the concerned complainant but does not statutorily force him to withdraw such complaint nor do the provisions of the RERA Act create any mechanism for transfer of such pending proceedings to authorities under the RERA Act. As against that  (2009) 9 SCC 221  AIR 1950 SC 188: 1950 SCR 459  (2009) 6 SCC 635 the mandate in Section 12(4) of the CP Act to the contrary is quite significant. Again, insofar as cases where such proceedings under the CP Act are initiated after the provisions of the RERA Act came into force, there is nothing in the RERA Act which bars such initiation. The absence of bar under Section 79 to the initiation of proceedings before a fora which cannot be called a Civil Court and express saving under Section 88 of the RERA Act, make the position quite clear. Further, Section 18 itself specifies that the remedy under said Section is “without prejudice to any other remedy available”. Thus, the parliamentary intent is clear that a choice or discretion is given to the allottee whether he wishes to initiate appropriate proceedings under the CP Act or file an application under the RERAAct.

29. It was, however, urged that going by the objective or the purpose for which the RERA Act was enacted and considering the special expertise and the qualifications of the Chairpersons and Members of the Authority (Section 22) and the Appellate Tribunal (Section 46), such authorities alone must be held entitled to decide all issues concerning the Project registered under the RERA Act. It was submitted that if the allottees were to be permitted to initiate parallel proceedings before the fora under the CP Act, the financial drain on the promoter would render completion of construction an impossibility and, therefore, the RERA Act in general and Section 89 in particular be construed in such a way that all the issues pertaining to the concerned project be decided only by the authorities under the RERA Act. Even with acceptance of such interpretation, the allottees would still be entitled to approach the authorities under Section 18 of the RERAAct.

30. It is true that some special authorities are created under the RERA Act for the regulation and promotion of the real estate sector and the issues concerning a registered project are specifically entrusted to functionaries under the RERA Act. But for the present purposes, we must go by the purport of Section 18 of the RERA Act. Since it gives a right “without prejudice to any other remedy available’, in effect, such other remedy is acknowledged and saved subject always to the applicability of Section 79.

31. At this stage, we may profitably refer to the decision in Pioneer Urban Land and Infrastructure Limited and another vs. Union of India and another, where a bench of three Judges of this Court was called upon to consider the provisions of Insolvency and Bankruptcy  (2019) 8 SCC 416 Code, 2016, RERA Act and other legislations including the provisions of the CP Act. One of the conclusions arrived at by this Court was:-

32. We, therefore, reject the submissions advanced by the Appellant and answer the questions raised in paragraph 26 hereinabove against the Appellant.

33. We may now consider the effect of the registration of the Project under the RERA Act. In the present case the apartments were booked by the Complainants in 2011-2012 and the Builder Buyer Agreements were entered into in November, 2013. As promised, the construction should have been completed in 42 months. The period had expired well before the Project was registered under the provisions of the RERA Act. Merely because the registration under the RERA Act is valid till 31.12.2020 does not mean that the entitlement of the concerned allottees to maintain an action stands deferred. It is relevant to note that even for the purposes of Section 18, the period has to be reckoned in terms of the agreement and not the registration. Condition no.

(x) of the letter dated 17.11.2017 also entitles an allottee in same fashion. Therefore, the entitlement of the Complainants must be considered in the light of the terms of the Builder Buyer Agreements and was rightly dealt with by the Commission.

34. Lastly, it may be noted that the Consumer Protection Act, 2019 (hereinafter referred as, “2019 Act”) was enacted by the Parliament “to provide for protection of the interests of consumers and for the said purpose, to establish authorities for timely and effectively administration and settlement of the consumers’ dispute and for matters connected therewith or incidental thereto”. Sections 2(7), 2(33), 2(37), and 2(42) define expressions “Consumer”, “Product”, “Product Seller” and “Service” respectively. Sections 85 and 86 deal with liability of “Product Service Provider” and “Product Seller”. Sections 100 and 107 of 2019 Act are to the following effect:- “100. The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the

107. (1) The Consumer Protection Act, 1986 is hereby repealed. (2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under   Most of the provisions in Chapters I, II, IV, V, VI, VII and VIII including Sections 100 and 107 were brought into force w.e.f. 27.07.2020 vide Notification dated 15.07.2020 the Act hereby repealed shall, in so far as it Is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act. (3) The mention of particular matters in sub-section (2) shall not be held to prejudice or affect the general application of section 6 of the General Clauses Act, 1897 with regard to the effect of repeal.” Section 100 of 2019 Act is akin to Section 3 of the CP Act and Section 107 saves all actions taken or purported to have been taken under the CP Act. It is significant that Section 100 is enacted with an intent to secure the remedies under 2019 Act dealing with protection of the interests of Consumers, even after the RERA Act was brought into force. Thus, the proceedings initiated by the complainants in the present cases and the resultant actions including the orders passed by the Commission are fully saved.

35. Resultantly, we reject all the submissions advanced by the Appellant. These appeals are accordingly dismissed affirming the view taken by the Commission. We quantify the costs at Rs.50,000/- (Rupees Fifty Thousand only) to be paid by the Appellant in respect of each of the Consumer Cases, over and above the amounts directed to be made over to the Complainants and shall form part of the amount payable by the Appellant to the Complainants.

36. All the Complainants are entitled to execute the orders passed by the Commission in their favour, in accordance with law....…..……………….J. [Uday Umesh Lalit].…………………….J. [Vineet Saran] New Delhi; November 02, 2020.