2021 (3) TMI 976 - Other - Indian Laws

Breach of agreement entered into for sale of residential project - nearing completion project - Complainant Association has stated in the Complaint that the common facilities viz. Boundary wall, Medical Centre, Staff quarters, STP, Roads and Gardens which were promised are still not constructed and no effort was made by the Respondent Promoter to improve the infrastructure - complainant are seeking to enforce that the Promoter M/s. Serene Senior Living Pvt. Ltd. will complete the project as planned and provide residents with all infrastructure facilities - complainant also seeking relief in other complaints like Common facilities including club house, gardens should be handed over to the Association as per RERA Rules and also to attend warranty complaints. HELD THAT - It is seen from the copy of the Construction Agreement for Flat No.C-104 in this Real Estate Project (attached with the Complaint as Annexure-I) that Para-21 of the Construction Agreement states that M/s. Serene Senior Care Pvt. Ltd (2nd Respondent) will provide services to the purchasers and also to other residents of Serene Rose for which a separate Services Agreement will be signed by the purchasers, the SSC (2nd Respondent) as well as the DEVELOPER (1st Respondent) along with this Agreement. This Construction Agreement with the Allottee Thiru A.K. Ragothaman has been executed on 16.09.2015 - It is also seen that the 1 st Respondent Promoter as Power of Attorney Holder of the lands on which this Project is developed has sold 25,746 sq.ft. of undivided share of land to the 2nd Respondent the Service Provider and executed the sale deed dated 27.10.2017. This act of sale by the 1st Respondent Promoter is not only in contravention of the Section 17 of the RERA Act, but also against the provision in the Construction Agreement in para-22, 23 and 24 specifying the eligible person to whom the undivided share in the project can be sold. It is also seen from the Construction Agreement executed with the Allottees of this Project that the Club House is a common facility and the sale consideration paid for the construction of the flat and common amenities and facilities includes the Club House. The Brochure for the Serene Rose Real Estate project specifically mentions the Club House as one of the facilities for the Allottees - Therefore, the ownership of the Club house as well as the undivided share of the land on which the superstructure of the Club House is located has to be vested with the Association of Allottees only. It is for the 1st Respondent to ensure that the undivided share of the land measuring 25,746 sq.ft. and the Club House are conveyed to the Association of Allottees before 28.02.2021. For this purposes, the 1st Respondent Promoter shall pay back to the 2nd Respondent the sale consideration collected by them as Power of Attorney Holder from the 2nd Respondent towards undivided share of land and the 1st Respondent Promoter shall also repay the construction cost of the Club House which was paid by the 2nd Respondent to the 1st Respondent Promoter - With these payments, the 1st Respondent Promoter should get the ownership of the undivided share of land and the Club House and convey in favour of the Association of Allottees before 28.02.2021. This Complaint is disposed of.

Issues Involved:
1. Delay in project completion and lack of common facilities.
2. Non-registration of the project with RERA.
3. Discrepancies in the status of the project.
4. Defects in the occupied flats.
5. Transfer of common facilities to the service provider.
6. Maintenance and repair responsibilities.
7. Jurisdiction and maintainability of the complaint.
8. Compliance with RERA provisions.
9. Ownership and transfer of common amenities.
10. Refund of security deposits.

Detailed Analysis:

1. Delay in Project Completion and Lack of Common Facilities:
The complainant association highlighted that the project 'Serene Rose' was promised for completion by June 2016 but was delayed significantly. Common facilities like electricity, boundary wall, staff quarters, medical center, and internal roads were incomplete even when some occupants moved in by October 2017. The service lift was commissioned only in March 2019, and the completion certificate was still pending.

2. Non-Registration of the Project with RERA:
The complainants pointed out that the 1st Respondent did not register the 'Serene Rose' project with RERA, violating RERA rules. The 1st Respondent argued that phases A and C were launched before RERA's introduction and thus did not fall under its ambit. However, phases B and D were registered with RERA.

3. Discrepancies in the Status of the Project:
The complainants noted contradictions in the status of the project as reported by the 1st Respondent in different documents. While the project was claimed to be "nearing completion" and "completed and handed over," many facilities were still incomplete.

4. Defects in the Occupied Flats:
The complainants listed several defects in the occupied flats, including leakages, blocked pipelines, and unfinished works. The 1st Respondent acknowledged the responsibility to attend to these defects within twelve months from the date of possession, as per the construction agreement.

5. Transfer of Common Facilities to the Service Provider:
The complainants argued that common facilities were sold to the service provider, which should have been handed over to the Residents Welfare Association as per RERA rules. The 1st Respondent contended that the amenities were transferred to the service provider for maintenance purposes.

6. Maintenance and Repair Responsibilities:
The 1st Respondent claimed that all repair and maintenance works reported within twelve months of possession were attended to. The complainants, however, stated that many defects remained unresolved despite being reported within the stipulated period.

7. Jurisdiction and Maintainability of the Complaint:
The 2nd Respondent (service provider) argued that the complaint was not maintainable before RERA as there was no provision mandating the registration of a "service provider" under RERA. They also contended that the association had no locus standi to file the complaint.

8. Compliance with RERA Provisions:
The complainants argued that the entire project should be considered a single integrated project under RERA's ambit. The authority determined that the project, including common amenities, was not completed by the crucial date of 01.05.2017, thus classifying it as an ongoing project under RERA.

9. Ownership and Transfer of Common Amenities:
The authority directed the 1st Respondent to register Block-A and C along with common areas and amenities with RERA. The 1st Respondent was also instructed to execute a registered conveyance deed for the title in common areas and amenities to the Association of Allottees by 28.02.2021. The sale of undivided share of land to the service provider was found to be in contravention of RERA provisions and the construction agreement.

10. Refund of Security Deposits:
The complainants sought the refund of security deposits collected from the owners. The 2nd Respondent argued that the refundable deposit was a caution measure and did not fall under RERA's purview. The authority did not directly address the refund issue but focused on compliance with RERA provisions.

Conclusion:
The authority concluded that the project was an ongoing project under RERA and directed the 1st Respondent to register the project and hand over common amenities to the association. The sale of land and club house to the service provider was declared null and void, and the 1st Respondent was instructed to rectify defects reported within five years of possession. The service agreement with the service provider was deemed null and void to the extent it conflicted with RERA provisions.

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