Completion Certificate issued prior to commencement of The Real Estate (Regulation and Development) Act, 2016: Will buyer’s case be maintainable? Read on

Odisha Real Estate Regulatory Authority, Bhubaneswar: Siddhanta Das, Chairperson, Pradeep Kumar Biswal, Member – I and Ramanath Panda, Member – II held that the present matter was not maintainable as the project which was the subject matter of the present case was completed before the commencement of The Real Estate (Regulation and Development) Act, 2016.

Respondent was developing a project and the complainant and her son applied for allotment of a flat in their favour in the project. Respondent was allotted a flat, and later an agreement was executed between both the parties for the sale of flat. Total consideration amount of the house was Rs 58,26,500 which included parking charges.

As per the above-mentioned agreement, the house in completed form should have been delivered within 40 months, i.e., by end of February 2016. Complainant continued to pay the amount as per the payment schedule of the agreement. Later in the year, 2015 the complainant requested another flat instead of the one which was already allotted. The said request was accepted. But the respondent could not complete the project before February 2016 as agreed upon by him in the agreement.

Complainant requested time and to hand over possession and to execute a sale deed.

Respondent in March 2016 requested the complainant to pay the final payment and to take possession of the unit. In September 2016, the complainant paid the rest of the amount towards full and final payment. Inspite of this, the respondent could not complete the flat.

In the year 2017, the flat was handed over to the complainant but the respondent before execution of the sale deed did not obtain an occupancy certificate from the local authority which was in violation of the provisions of the Act.

It was stated that the parking charges were covered under common area, hence the amount for the same should have been refunded. Respondent also took an extra amount towards VAT charges. Further, the complainant also sent a notice to the respondent for payment of Rs 4,59, 360 for delay in delivery of possession.

But the respondent did not make any payment.

In view of the above-stated reasons, the complainant approached the Authority.

Analysis, Law and Decision

Authority opined that delay in getting approval and non-availability of the building material required for construction are no ground to avoid the responsibility of payment of interest for the delay in delivery of possession.

Coram stated that it could not understand as to why the respondent started the project and collected money from buyers before getting sanctioned plan. Therefore, the respondent was held liable to pay interest on the whole amount for a period of 10 months provided the Act has application to the present project.

Further, from the recitals of the sale deed, it could not be established that the complainant paid separately for the parking cost. Hence, the complainant was not entitled to claim a refund of the parking cost.

VAT is collected as per the statutory provisions and paid t the Government. Hence it is only recoverable from Authority if sufficient reason is provided regarding payment made wrongly. Therefore, the complainant was not entitled to recover the VAT charges collected.

The Act of 2016 has application only to the project which are ongoing and the projects which are to be developed after commencement of the Act.

In the present matter, a completion certificate had been issued to the promoter by the empanelled architect of the BDA (local authority) in February 2016. The promoter presented the completion certificate before the local authority on the same day for the purpose of obtaining occupancy certificate. Therefore, for this project completion certificate was already issue prior to commencement of the Act.

It was observed that, The Real Estate (Regulation and Development) Act, 2016 got Presidential assent on 25-3-2016 and published in the Gazette of India on 26-3-2016. Therefore, the project was complete in all respect before the Act came into operation.

Hence, it was held that the Act had no application to the present project and that in view of the matter the case of complainant was not maintainable and complainant had no cause of action to file the case. [Ranjita Pati v. D.N. Homes (P) Ltd., Complaint Case No. 4 of 2021, decide don 2-12-2021]

Advocates before the Authority:

Advocate for the complaint: C. Ray and associates

Advocate for the respondents: P.C. Mohapatra and associates

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