Builder deliberately not handing over the possession to the allottee despite receiving the whole of consideration; Haryana RERA modifies order of the State Authority to extend due date of delivery of the unit

Haryana Real Estate Appellate Tribunal: The bench comprising of Inderjeet Mehta (Judicial Member) and Anil Kumar Gupta (Technical Member), while dealing with the appeal preferred under Section 44(2) of the Real Estate (Regulation and Development) Act, 2016 against the order passed by the Haryana Real Estate Regulatory Authority, Gurugram (‘The Authority’), partly allowed the appeal and modifying the order of the Authority to the extent of changing the due date of delivery of the unit.

Background of the case

The respondents/allotees had booked an apartment at Paras Quartier, Sector 2, village Gawal Pahari, Gurugram in 2013 and a significant amount of money had been paid by them. The possession of the apartment was to be handed in within 42 months of the date of the execution of the apartment buyer agreement (‘the agreement’) with an additional grace period of 06 (six) months. However, the appellant/promoter failed to offer legal possession of the apartment to the respondents.

Contention of the Appellant

It was argued that the possession of the apartment from the execution of the agreement was subject to:

A) Obtaining all the licenses for commencement of construction. The approval for commencement of such construction was accordingly obtained and initiated by November 2013.

B) While relying on Saradmani Kandappan v. S. Rajalakshmi, (2011) 12 SCC 18, respondent’s adherence to Section 19 of Real Estate Regulatory Authority Act, 2016 (‘RERA Act’) was a predominant factor. The respondents did not adhere to the payment schedule, as most of the payments were made after the expiry of due dates- resulting in violation of the buyer agreement, in turn affecting the obligation of the builder in terms of handing over the possession of the apartment. It was alleged that the consumers cannot be allowed to reap the benefits of their own wrong by not taking possession when the same has been offered by the Builder.

It was further alleged that the construction of two towers of the project were stopped on the orders of Supreme Court in order to control pollution as well as on the orders of Directorate of Town & Country Planning (‘DTCP’) on account of alignment of a sewage(‘nallah’), which was finally resumed in 2016, therefore, the same could not be completed in time. Thus, the delay could not be attributed to the appellant.

It was further contended that the Authority had not complied with Rule 28(2)(d) of the Rules by virtue of which the Authority was duty bound to record the plea of the appellant to the effect whether it pleaded guilty or wanted to contest the complaint.

Contention of the Respondent

Despite the appellant alleging that the construction of two towers were frozen by the orders of DTCP, they continued to ask for payments during the said period. It was further argued that the same ground was not contended before the Authority.

Court’s Assessment

The Court stated that, according to the terms of the Agreement, the appellant was to handover the possession within 48 months (inclusive of additional grace period of six months), hence, the Authority fell in error in incorporating 06 (six) months of grace period which was for completion of the unit and further grace period of 90 (ninety) days which was for offering possession to the allottees. Since the appellant could not provide the possession within the stipulated period, it was not entitled to claim the 90 days grace period. However, the grace period of 06 months was allowed resulting in the total period of handing over the possession to 48 months.

It was further stated that the ground that the construction of two towers were frozen in accordance with the orders of the DTCP, was never taken up before the Authority nor any evidence to the effect was provided that the respondent’s unit was situated in the frozen block. The Court also said that the appellant only referred to a news clipping of India Today which could not be relied upon in the absence of the Apex Court’s order.

The Court went on to peruse the appellant’s account statement which had received payments on accounts of completion of floors, clearly indicating that the construction of the project was neither hindered by the order of DTCP nor the Apex Court.

The Court also stated that the appellant was given ample opportunity to represent and defend itself, therefore, the contention of the appellant that the authority had not complied with the RERA Rules was without any merit.

The Court said that the appellant was deliberately not handing over the possession to the respondent despite being in the dominant position, having received whole of the consideration and a much bigger amount was due to the respondents on account of delayed possession.

Consequently, the appeal was partly allowed, and the order of the authority was modified to the extent that the due date of delivery was extended. Despite having multiple orders being passed in favor of the respondent in relation to handing over the possession of the apartment, the appellant was in violation of all the orders. The appellant was further directed to handover the possession within one month from date of the order

[Fantasy Buildwell Pvt. Ltd. v Gaurav Manohar Negi, Appeal No. 299 of 2022, decided on 09-12-2022]

Advocates who appeared in this case:

For the Appellant- Advocate Amandeep Singh Talwar;

For the Respondents- Advocate Rishab Jain.

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