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Refund, Interest & Compensation in RERA

Real Estate Regulation Act, RERA in short came with huge promises for home buyers and reality consumers who were burdened with atrocities of builders earlier like delay in possession,  use of substandard defective material , improper services , unilateral increase in area, security concerns,  delay interest charged at exorbitant prices of @24% and many other but very little has been done so far on ground for abovementioned deficiencies owing to confusion about who is entitled to give reliefs such as refund, compensation and interest as per RERA Act. 

Now let us see where in Act, these words are mentioned.  For Interest and Compensation,  it is utter easy to find them but for refund, it is damn hard as the word refund is non-existent and only because of this defect, many previous judgments of RERA Punjab and Haryana RERA Panchkula Authority has been nullified on the ground of jurisdiction.  

Read the order in Sameer Mahawar vs MG Housing Pvt Ltd and 18 other appeals decided in a common order by J Darshan Singh (retd), J Inderjeet Mehta (J) & J Anil Kumar Gupta (T) on 02.05.2019 here.

 

Rera Punjab Haryana Appellate Authority Refund Interest Compensation

Also Read- RERA PUNJAB FORM M AND N FINALLY SETTLED

Section 12- Where any person makes an advance or a deposit on the basis of the information contained in the notice advertisement or prospectus, or on the basis of any model apartment, plot or building, as the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under this Act:

Provided that if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, or the model apartment, plot or building, as the case may be, intends to withdraw from the proposed project, he shall be returned his entire investment along with interest at such rate as may be prescribed and the compensation in the manner provided under this Act.


Section 14(3)- (3) In case any structural defect or any other defect in workmanship, quality or provision of services or any other obligations of the promoter as per the agreement for sale relating to such development is brought to the notice of the promoter within a period of five years by the allottee from the date of handing over possession, it shall be the duty of the promoter to rectify such defects without further charge, within thirty days, and in the event of promoter's failure to rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation in the manner as provided under this Act.

 

Also Read- LEGAL NOTICE BEFORE RERA CASE FOR ANY DEFICIENCY

 

Now the most confusing Section 18-  (1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,—

(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or

(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act:

Provided that where an allottee does not intend to withdraw from the project, he shall

be paid, by the promoter, interest for every month of delay, till the handing over of the

possession, at such rate as may be prescribed.

 

Also Read- RERA Panchkula Penalties

(2) The promoter shall compensate the allottees in case of any loss caused to him due

to defective title of the land, on which the project is being developed or has been developed,

in the manner as provided under this Act, and the claim for compensation under this subsection shall not be barred by limitation provided under any law for the time being in force.

(3) If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act.


The word used is ‘return’ not ‘refund’ but ought to be construed in the same sense as term refund means and that’s why the powers to grant refund falls with the domain of Adjudicating Officer (AO).

 

Also Read- HOW TO GET COMPENSATION FROM ADJUDICATING OFFICER

Section 19 (4)-  The allottee shall be entitled to claim the refund of amount paid along with interest at such rate as may be prescribed and compensation in the manner as provided under this Act, from the promoter, if the promoter fails to comply or is unable to give possession of the

apartment, plot or building, as the case may be, in accordance with the terms of agreement for

sale or due to discontinuance of his business as a developer on account of suspension or

revocation of his registration under the provisions of this Act or the rules or regulations

made thereunder.   

 

Now Section 19 doesn’t falls under the domain of Adjudicating officer and which left a view that RERA Authority constituting IAS’s has jurisdiction to entertain matters related to refund and withdraw from project.

Form M (Complaint to Authority akin member IAS) and Form N (Complaint to Adjudicating Officer akin retired Judge) has derailed the efficacy of RERA Act but not anymore because both Punjab RERA Appellate Authority and Haryana Real Estate Appellate Authority  (HREAT) has settled the controversy by their judgment in following: 

 

Also Read- CAN RERA AUTHORITY DECIDE REFUND IN PUNJAB AND HARYANA?

Now let us have the comparative view of both the judgments here  (conclusive findings):

Let us have RERA Punjab first- Sandeep Mann versus RERA Punjab & Anr, Appeal no. 53 of 2018

1 All violations and causes of action that gives rise to multiple reliefs shall be placed before one forum for adjudication.

2 Where the Act and or the Rules identify a particular forum as empowered to adjudicate a particular violation or a cause of action, the forum so named shall alone be empowered to decide the matter.

3 A violation claiming relief of compensation can only be adjudicated by the Adjudicating Officer exercising power under Section 71 of the Act and Rule 37 of the Rules.

 

Also Read- PROCEDURE STEPS OF COMPLAINT IN RERA PANCHKULA AUTHORITY

4 Where the violation alleged leads to a relief of compensation or if compensation is a part of multiple reliefs like return of investment with interest and compensation or refund with interest including compensation, the complaint shall be placed before the Adjudicating Officer exercising power under Section 31 and 71(1) of the Act read with Rule 37 in form N.

5 All other matters whatever be the nature of the voilation/cause of action and the reliefs flowing therefrom shall be placed before the Authority, like interest under the proviso to Section 18 and 19(7) of the Act.

6 All pending complaints/applications shall be forwarded by the Authority or the Adjudicating Officer to the appropriate forum as indicated above.

7 The parties shall be at liberty to amend their applications/complaints if the need so arises.

8 This order shall not apply to any matter that has attained finality.

 

Also Read-HARYANA RERA AUTHORITY CANNOT DECIDE REFUND IN GURUGRAM AND PANCHKULA

Now the order of Haryana RERA Appellate Authority at Chandigarh for Panchkula and Gurugram Benches in Sameer Mahawar vs MG Housing Pvt Ltd. Let us have the findings below:

1) That violations and causes of actions arising out of the same bundle of facts/rights giving rise to the multiple reliefs shall be placed before one and the same forum for adjudication in order to avoid the conflicting findings.

2) The complaints for the grant of relief of compensation can only be adjudicated by the adjudicating officer as per the provisions of section 71 of the Act and rule 29 of the rules.

3) Similarly, if compensation is provided as a part of the multiple reliefs along with refund/return of investment with interest flowing from the same violation/violations and causes of action, the complaints have to be placed before the adjudicating officer exercising the powers under Sections 31, 71(1) read with rule 29 of the Rules as only the adjudicating officer is competent to deal with the relief of compensation.

 

Also Read- EXECUTION OF RERA PANCHKULA ORDERS

The complaints filed by the appellants/allottees stand transferred to the adjudicating officer of the respective authorities for adjudication in accordance with law. The adjudicating officer will allow the appellant/allottee to amend their complaint in order to bring it in the parameter of Form 'CAO' as provided in rule 29 of the rules.

This order of ours will not apply to the orders directions and decisions, which has already attained finality. 

Further court held, RERA Authority had no jurisdiction to adjudicate upon the issue regarding refund. Thus all 19 appeals stand allowed accordingly. So, the impugned orders passed in all the appeals are hereby set-aside.

 

Also Read- REFUND REFUSED BY RERA PANCHKULA OR GURUGRAM? TRY THIS!


So now whether I should file my complaint to RERA Authority (Form M) or Adjudicating Officer (Form N) for Punjab and Haryana ? 

Here is my answer for each respective Authority;  RERA Punjab and Haryana RERA Authority?  

Let us have Punjab first :
1 If you want to retain the unit/plot/flat and just seeking compensation on any account like delay, increased area etc. then form M before RERA authority i.e. member IAS.

2 If you want to withdraw from project and don't want flat/unit/plot, then file form N before Adjudicating Officer which is retired Judge where you can claim everything refund, compensation and interest.

 

Now have Haryana:

1 In case of withdrawal of project- Everything goes to Adjudicating Officer as of now for refund , interest & compensation.

Also Read– CARPET AREA BUILT UP AREA AND SUPER AREA AS PER RERA

Rest, Haryana Real Estate Appellate Regulatory has settled the law that RERA Authority (IAS) in Panchkula Gurugram is competent to deal with the complaints where the claim is only for grant of interest simplicitor due to delay in delivery of possession. There is prima facie no express or implied prohibition to the Authority to entertain such matters. The appellate authority held that there is no reason to conclude that impugned orders passed by the Ld Authority are prima facie without jurisdiction. The decision of RERA Appellate Authority came in Appeal no. 74 of 2018 titled as Ramprastha Promoters & Developers Pvt Ltd vs Ishwar Chand Garg decided on 29.07.2019 .

Finally the controversy seems to be settled and now the RERA Punjab and RERA Panchkula and RERA Gurugram Authorities can start re-functioning again.

For more info on subject, please dial 99888-17966.

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