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TMI Blog2024 (8) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... tering ongoing project under Section 4(2) (l)(C) of RERA read with Rule 4(2) of Maharashtra Regulations would amount to alteration of agreement between the parties vis-a -vis Promoter s liability to pay interest under Section 18? - HELD THAT:- Under Section 4(2)(l)(C) of RERA, the promoter is required to make a declaration about the time period within which he undertakes to complete the project - under the provisions of Section 4(2)(l)(C) of RERA read with Rule 4(2) of Maharashtra Regulations, it is incumbent for a promoter to make declaration of the period within which he undertakes to complete the pending project. It is Appellant s case that since it has declared 31 December 2019 as the date for completion of the project, the said date must be taken into consideration for the purpose of determination of interest under the provisions of Section 18 of the Act. The issue as to whether the provisions of Section 4(2)(l)(C), of RERA Act enables the promoter to give fresh timeline in violation of the time period stipulated in the agreement came up before the Division Bench of this Court in Neelkamal Realtors [ 2017 (12) TMI 1580 - BOMBAY HIGH COURT] . In that case, constitutional validi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als Mr. Farhan Khan a/w Mr. Rubin Vakil, Mr. Manish Doshi, Ms. Heena T. Ms. Ankita i/b Vimadalal Co. for Respondents in both Appeals and for Applicants in IA No.15263/2023 JUDGMENT 1. These two Appeals are filed by the Promoter challenging common Judgment and Order dated 7 February 2023 in Appeal No.AT0006000000053317 of 2021 filed by the Respondents/flat purchasers and in Appeal No.AT0006000000093905 of 2022 filed by the promoter. Both Appeals were filed by the Respondents / flat purchasers and the Appellant / promoter challenging the order dated 27 July 2021 passed by the Maharashtra Real Estate Regulation Authority, Mumbai ( MahaRERA ). The Appellant / Promoter is aggrieved by the MahaRERA Tribunal s decision in directing payment of interest to the Respondents from 1 July 2016 instead of 1 January 2020. The Appellant is also aggrieved by rejection of prayer for exclusion of COVID pandemic period from 25 March 2020 to 27 July 2021 and 27 July 2021 to 30 September 2021 for interest liability. 2. Briefly stated, facts of the case are that the Appellant / Promoter undertook construction of building by implementing Slum Rehabilitation Scheme on Plot No.21/5, 21/6 (pt), South Estate S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espite committing before MahaRERA, Appellant did not hand over possession of the flat to Respondents by 31 December 2019. Respondents therefore approached MahaRERA once again by filing Complaint No.CC006000000195842. The complaint was disposed of by MahaRERA vide order dated 27 July 2021 directing the Appellant to pay interest from 1 January 2020 at the rate prescribed under Rule 18 of Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rate of interest and Disclosures on website) Rules 2017 ( Maharashtra Regulations ) till handing over possession of the flat. Immediately after passing of order dated 27 July 2021, the Respondents filed Appeal No.AT0006000000053317 of 2021 before MahaRERA Appellate Tribunal to the limited extent of denial of interest from 1 July 2016. Subsequently, the Appellant also filed Appeal No. AT0006000000093905 of 2022 challenging the order dated 27 July 2021 to the extent of non-grant of exemption from payment of interest during the period of Covid-19 pandemic. Both the Appeals have been heard and decided by the MahaRERA Appellate Tribunal by common Judgment and Order dated 7 Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veloper to hand over possession and to pay interest. That, the date of possession indicated in the agreement then becomes irrelevant on account of the provisions of Section 4(2) of the RERA Act. That, the date indicated in the registration application is sacrosanct and so long as the same is not challenged, the flat purchasers are bound by that date. That, if a flat purchaser is not desirous of continuing in the project on account of altered date indicated under the provisions of Rule 4(2) of the Maharashtra Regulations, he/she has an option of making an exit from the project. Once he/she does not exercise the option of exiting from the project, the flat purchaser is bound by the date indicated at the time of registration of the project. 9. Mr. Malpathak would further submit that construction of the building is completed and Occupancy Certificate has been received on 27 April 2022. That, immediately thereafter, the Appellant wrote to the Respondents to take over possession of the flat after paying the balance amount of consideration. That, the Respondents, however, refused to take possession of the flat referring to pendency of Appeal before the Tribunal. That, when the option was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulations does not amount to rewriting the contract between the parties. That, this issue is settled by the Judgment of this Court in Neelkamal Realtors Suburban Pvt. Ltd. and Anr. Vs. Union of India and Others (2018) 1 AIR Bom R 558 and also by Judgment of the Apex Court in Imperia Structures Limited Vs. Anil Patni and Another (2020) 10 Supreme Court Cases 783 . 13. So far as the correspondence which has taken place between the parties after issuance of Occupancy Certificate is concerned, Mr. Khan would submit that the Appellant is responsible for non-handing over possession of the flat as it finally insisted vide letter dated 17 June 2022 that the offer of the Respondents for payment of balance consideration after adjustment of amount of interest was rejected. That, the Appellant also insisted for deducting the interest in respect of Covid-19 pandemic period from 25 March 2020 to 30 September 2021 and also demanded various other amounts. That, therefore, the amount of interest cannot be frozen as on 29 April 2022. 14. Mr. Khan would submit that the Respondent No.2 is a senior citizen and is required to reside on leave and license basis by incurring expenses towards license fees. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is stage, they are interested in having the Project completed and will therefore not insist that the Respondent pay them interest for the delayed possession as on date, provided, the Respondent completes the project by committing to a reasonable-timeline. Further, they submitted that if they do not see the efforts of the Respondent towards the completion of the project, they should-be a liberty to demand interest as per the provisions of section 18 of the Real Estate (Regulation and Development) Act, 2016 and the rules and regulations made to hereunder, from the Respondent for the delay in completing the said project. 4. In the view of the above facts, the Respondent shall, therefore handover the possession of the apartment to the complainant before the period of December 31, 2019. The Complainant shall be at liberty to demand interest at an appropriate stage, as per the provisions of section 18 of the Real Estate (Regulation and: Development) Act, 2016 and the rules and regulations made hereunder from the Respondent for the delay in completing the said project. Further, since the Complainants have already paid 75% of the amount towards the consideration of the said apartment, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration of the real estate project in such form, manner, within such time and accompanied by such fee as may be 1[prescribed]. (2) The promoter shall enclose the following documents along with the application referred to in sub-section (1), namely: (a) a brief details of his enterprise including its name, registered address, type of enterprise (proprietorship, societies, partnership, companies, competent authority), and the particulars of registration, and the names and photographs of the promoter; (b) a brief detail of the projects launched by him, in the past five years, whether already completed or being developed, as the case may be, including the current status of the said projects, any delay in its completion, details of cases pending, details of type of land and payments pending; (c) an authenticated copy of the approvals and commencement certificate from the competent authority obtained in accordance with the laws as may be applicable for the real estate project mentioned in the application, and where the project is proposed to be developed in phases, an authenticated copy of the approvals and commencement certificate from the competent authority for each of such phases; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in practice that the withdrawal is in proportion to the percentage of completion of the project : Provided also that the promoter shall get his accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilised for that project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project. Explanation. For the purpose of this clause, the term scheduled bank means a bank included in the Second Scheduled to the Reserve Bank of India Act, 1934 (2 of 1934); (E) that he shall take all the pending approvals on time, from the competent authorities; (F) that he has furnished such other documents as may be prescribed by the rules or regulations made under this Act; and (m) such other information and documents as may be prescribed. (3) The Authority shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Rule 4(2) of Maharashtra Regulations, it is incumbent for a promoter to make declaration of the period within which he undertakes to complete the pending project. It is Appellant s case that since it has declared 31 December 2019 as the date for completion of the project, the said date must be taken into consideration for the purpose of determination of interest under the provisions of Section 18 of the Act. 24. The issue as to whether the provisions of Section 4(2)(l)(C), of RERA Act enables the promoter to give fresh timeline in violation of the time period stipulated in the agreement came up before the Division Bench of this Court in Neelkamal Realtors (supra). In that case, constitutional validity of certain provisions of RERA were challenged. The two learned Judges of the Division Bench have rendered separate Judgments with same conclusion in Neelkamal Realtors. Justice Naresh Patil (as he then was) in his Judgment has held in para 128 that RERA does not contemplate rewriting of contract between the flat purchaser and the promoter. In para 128 of the Judgment authored by Patil J, it is held as under: 128. Under the provisions of Section 18, the delay in handing over the pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted with the penal consequences laid down under RERA. If the promoter has all the permissions specified in Section 4(2) in place and is permitted to prescribe new time period, I do not find that first proviso to Section 3(1) is unreasonable. That apart, in terms of first proviso to Section 6, the Authority has discretion, in reasonable circumstances, without default on the part of the promoter, based on the facts of each case, and for reasons to be recorded in writing, to extend the registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of one year. 26. Thereafter Ketkar J. decided the effect of enabling provision under Section 4(2)(l)(C) to revise the date of completion of project vis-a-vis the obligation of the promoter arising out of agreement executed with flat purchasers. He held in paras 304 and 305 in his Judgment as under : 304. Section 18 provides for refund of amount and compensation on account of - (a) failure of the promoter to complete or his inability to give possession of an apartment, plot or building either in accordance with the terms cf the agreement for sale or as the case may be, duly completed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of Section 4(2)(l)(C) of RERA and Regulation 4(2) of Maharashtra Regulations does not affect the obligations on his part arising out of agreement executed with the Respondents. Under that agreement, the Appellant undertook to hand over possession of the flat to the Respondents on 30 June 2016. Therefore, the Tribunal has rightly directed the Appellant to pay interest to the Respondents from 1 July 2016. I do not find any serious error being committed by the Tribunal in directing payment of interest by taking into consideration the timeline specified in the agreement and by ignoring the timeline declared at the time of registration of the project. 28. The next aspect is about the liability of the Appellant to pay interest after issuance of Occupancy Certificate on 27 April 2022. According to the Appellant, the Respondents were called upon to take possession of the flat by paying balance amount of consideration and charges by letter dated 29 April 2022 and therefore the liability to pay interest must be frozen as on 29 April 2022. Some correspondence has taken place between the parties between 29 April 2022 to 17 May 2022 which is relevant for the purpose of determining the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in your Letter under reply is not acceptable to us, and hence it is rejected . We submit that you cannot dictate any unilateral change in terms upon us, which are not specified in the agreement. We repeat that interest awarded in the impugned order dated 27:07.2021 is not crystallized, and moreover you have challenged the said Order in Appeal. In the circumstances, we need to wait upto the outcome of the Appeal as stated aforesaid. Simultaneously without prejudice to what is stated aforesaid, we submit that the period of COVID-19 pandemic from 25.03.2020 to 30.09.2021 would be required to be excluded, while determining total amount of interests claim, as entire building activities in the state as well as the country during lockdown period was at stand still, and the said contention has been duly taken by us in our reply. We submit that you are required to pay the following amounts as stated in paragraph 8 hereunder and on payment of which you may obtain possession of the Flat and car parking space. (vi) This is how Appellant demanded the amount of Rs.67,14,563/- from Respondents as a pre-condition for handing over possession of the flat. The details of the said amount of Rs.67,14,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant in respect of liability to bear interest after issuance of Occupancy Certificate. 30. So far as Appeal No.689/2023 is concerned, the same merits no consideration in view of the fact that the Appeal is filed for claiming benefit of circulars issued by MahaRERA for moratorium during Covid-19 pandemic period. The Appellant was under obligation to hand over possession of the flat initially on 30 June 2016 and in any case as per its own commitment before the Authority by 31 December 2019. Therefore, Covid-19 pandemic lockdown declared subsequently cannot come to the aid of the Appellant for claiming any relief for payment of interest. The Appellate Tribunal has rightly considered and rejected the request of the Appellant for grant of benefit of moratorium during Covid-19 pandemic in para 28 of its Judgment. It must also be borne in mind that initially the Appellant has not challenged MahaRERA s Order before the Tribunal and filed the Appeal only when Respondents appeal was taken up for hearing. Mr. Malpathak has submitted that initially Appellant filed cross objections in Respondents appeal but later thought of filing a substantive appeal so as not to leave any technical ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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