Last Updated on July 29, 2022 by Satish Mishra
Post covers interest for delay in possession in ATS Golf Meadows Lifestyle RERA Punjab Complaint. To pay outstanding amount.
Complaint Against ATS Estate Private Limited and Geenu Pawa
This post is a summary of judgment wherein the complainant applied for one apartment in ATS Golf Meadows Lifestyle situated at village Madhopur, Tehsil Dera Bassi, District Mohali. It was alleged by the complainant that despite having received a substantial amount of the sale consideration, the respondents failed to offer the possession of the unit in question. The respondents made detailed submissions and objections to the complaint in question. The Court held, “The complainant was under an obligation to have paid the balance amount of Rs.12.81 Lakhs and taken possession of the property within fifteen days of the letter of possession. The respondents shall pay interest w.e.f. 31.07.2015 till 10.07.2019 (two months from the offer of possession as per Section 19(10) of the Act) plus 2% and this amount shall be paid within sixty days from this order. That the interest to be paid by the complainant for any delay in payment would also be the State Bank of India’s highest marginal cost of lending rate (as of today) plus 2%. The complainant would be bound to pay any outstanding amounts, as per the agreement, before taking possession of the unit. “
Also Read- Consumer Complaint Against ATS GOLF MEADOWS
Judgment digest
Complaint GC No.1295/2019
Dated of Institution: 25.07.2019
Date of Order: 09.04.2021
Complainant:
Vandana Singh, A1 303, Nirmal Chhaya Towers VIP Road, Zirakpur, District Sahibzada Ajit Singh Nagar (Mohali), Punjab.
Respondents:
- ATS Estate Private Limited, 711/92 Deepali Nehru Place, New Delhi, Delhi Pin Code 110019.
- Geenu Pawa, ATS Golf Meadows Perlude; Barwala Road, Dera Bassi, District Sahibzada Ajit Singh Nagar (Mohali) Punjab Pin Code 140507.
Argued by:
For the complainants: None for the complainant
For the respondents: Shri Harsh Bunger Advocate, representative
Quorum:
(Afay Pal Singh) Member
(Navreet Singh Kang) Chairperson
(Sanji Gupta) Member
Also Read- RERA Punjab Complaint against ATS Estate Private Ltd
Facts and evidence presented by both parties.
The main averments in the complaint are that the complainant applied for one apartment vide application dated 26.06.2012 and was allotted Type-A flat on 9th Floor in Tower No.4, bearing No.04093 in ATS Gold Meadows Lifestyle situated at village Madhopur, Tehsil Dera Bassi, District Mohali. The total consideration of the flat in question was Rs.92,00,000/-, out of which the complainant had paid a sum of Rs.81,90,451/-, and the balance amount was to be paid at the time of possession. The buyer’s agreement was executed between the parties on 26.07.2012 and as per clause-14 of the said agreement, the possession of the property unit was to be delivered within thirty-six months from the date of the actual start of the construction of tower No.4, which started in June 2012 and as such possession was to be delivered to the complainant by 31.07.2015. It is alleged that despite having received a substantial amount of the sale consideration, the respondents failed to offer the possession of the unit in question. Hence, the complainant has sought relief on the following grounds: i. To direct the respondents to complete the construction of the flat and to deliver the possession of the same, along with all amenities, to the complainant; and ii. To direct the respondent to pay interest on the amount of Rs.81,90,451/- till the date of handing over of possession, as prescribed under Section 18 of the Act. The respondents made detailed submissions and objections to the complaint in question. The following are the main contentions/objections: i) That the complainant agreed to sell with the respondent company on 26.07.2012 and the Act came into force on 01.05.2017. The respondent company got its project, named above, registered under the Act, against registration No.PBRERA-SAS-79 PRO007. As per the declaration and affidavit submitted by the respondent company, the completion time of the project, consisting of 15 towers, has been declared as nine years i.e. up to 01.09.2026. Hence, the alleged violation of delay in handing over possession does not constitute a contravention of the Act and Rules and Regulations made thereunder given the time for completion of the project being nine years from registration of project i.e. 01.09.2017. ii) The complaint is not covered under the three conditions laid down by the tribunal in complaint No.3, of 2017, titled Bikramjit Singh’ and others Vs. state of Punjab. iii) The buyer’s agreement executed by the complainant with the respondent company is not the one which is prescribed by the Rules as applicable in Punjab; iv) That the penalty stipulated in the contracts cannot be axiomatic but a person claiming such loss or penalty must prove or substantiate its loss.
Also Read- Binu Bakshi v. M/s ATS Estate Private Limited – Casemine
Compensation can only be given for damaged or loss suffered. v) That the award of the statutory rate of interest is completely misconceived in as much as it would have the effect of novation of contract already executed between the parties and a validly executed contract cannot be novated or changed in any manner except with the mutual consent of the parties vi) That the provisions of the Act cannot be read into the already executed contracts between a promoter and an allottee and it is settled law that legislative acts entailing change in substantive rights are made applicable prospectively; vii) That the jurisdiction of this Authority could not have been invoked in this case given the arbitration clause 35 of the agreement and dispute resolution mechanism settled between the parties was to be invoked. As such the complaint under the Act is not maintainable; viii) That as per the terms of the agreement, the complainant was entitled to Rs.5/- per square feet, per month, for the period of delay in delivery of possession of the unit. The complainant is a speculative buyer, who invested in the project for monetary returns, and now since the real estate market is showing a downward trend, the complainant is taking undue advantage of the Act; though the parties were bound by the terms and agreement executed between them; ix) That the respondent company has been granted partial completion certificate on 10.05.2019 for Tower No.4, in which the flat of the complainant is situated, and letter for the offer of possession was issued to the complainant on 16.05.2019, asking the complainant to pay the balance amount and to take possession of the unit in question.
Also Read- M/S Ats Estates Pvt Ltd vs Union Of India And Others on 16.10.2020
However, instead of doing so, the complainant instituted the instant complaint, even though on request of the complainant, the respondent company allotted additional basement car parking without any additional cost to compensate him for the delay: x) That the complaint is also liable to be dismissed on the ground that the complainant has filed it with an ulterior motive; only to delay the execution of the conveyance deed. There being disputed question of facts, the complaint cannot be decided summarily: xi) That an amount of Rs. 12,81,500/- is still due towards the complainant; to be paid at the time of offer of possession. The project in question was 100% complete and a partial completion certificate had been issued before the filing of this complaint and in case the interest, as sought by the complainant, is granted, the respondent would suffer a huge loss. The first argument of the respondent is that the timeline given at the time of registration under the Act would hold good; and not the timeline given in the buyer’s agreement. Hence it has sought to be argued that there is no delay in handing over possession of the flat, as under the RERA Act the time for completion of the project was 1.09.2026. The respondent has submitted that as per clause 14(d) of the buyer’s agreement, the complainant is only entitled to compensation at the rate of Rs.5/- per square feet and not as per section 18 of the RERA Act.
Also Read- RERA Punjab Complaint against ATS Estate Private Ltd
We find that a similar issue came up before the Hon’ble Supreme Court in the case of Wg. Cdr. Arifur Rehman Khan, in civil appeal No. 6239 of 2019.In that case, the issue before the Supreme Court was whether, under the provisions of the Consumer Protection Act 1986, interest at the rate higher than that given in the agreement to sell could be enforced on the builder. The Court held: “On behalf of the flat purchasers it has been urged by Mr. R Balasubramanian (a submission which has not been controverted in rejoinder) that 95 percent of the purchase price was paid during the first two and a half to three years. The agreement did not stipulate that the developer would pay any interest on the amount which had already been received. A large chunk of the purchase price was thus available to the developer to complete construction. The court must take a robust and common-sense-based approach by taking judicial notice of the fact that flat purchasers obtain loans and are required to pay EMIs to financial institutions for servicing their debt. Delays on the part of the developer in handing over possession postpone the date on which purchasers will obtain a home. Besides servicing their loans, purchasers have to finance the expenses of living elsewhere. To postulate that a clause in the agreement confining the right of the purchaser to receive compensation at the rate of Rs 5 per square foot per month (Rs 7,500 per month for a flat of 1500 square feet) precludes any other claim would be a manifestly unreasonable construction of the rights and obligations of the parties. Where there is a delay of the nature that has taken place in the present case ranging between periods of two years and four years, the jurisdiction of the consumer forum to award reasonable compensation cannot be foreclosed by a term of the agreement.”
Also Read- Buyers entitled to full refund if flat not given on time: Court
The Hon’ble Apex Court in case Pioneer Urban Land & Infrastructure Limited vs. Govindan Raghavan, 2019(2) R.C.R. (Civil) 738 has laid down as under: “A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided, unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per section 2(r) of the Consumer Protection Act, 1986 since it adopts unfair methods or practices to sell the flats by the Builder. In view of the above discussion, we have no hesitation in holding that the terms of the Apartment Buyer’s Agreement dated 08.05.2012 were wholly one-sided and unfair to the Respondents-Flat Purchaser. The appellant Builder could not seek to bind the Respondents with such one-sided contractual terms. We also reject the submission made by the Appellant Builder that the National Commission was not justified in awarding interest a 10.7% S./. p.a. for the period commencing from the date of payment of each installment, till the date on which the amount was paid, excluding only the period during which the stay of cancellation of the allotment was in operation.”
Also Read- Complaint No. ADC 1281/2019 Dated of Institution – RERA Punjab
Judgment:
From the above facts, it is quite clear that there is a substantial delay in handing over the possession of the unit as per the buyers’ agreement. Instead of handing over possession within 36 months, plus 6 months grace period, as per the buyer’s agreement i.e. by 25.04.2017, the letter of possession was only sent on 16-05-2019, after receiving the partial completion certificate, dated 10.05.2019. Hence the complainant is eligible for interest under section 18 of the Act for the period 01-08 2015 to 16-05-2019. However, we are not inclined to interest accruing under Section 18 of the Act should be set off against the dues of Rs.12,81,499)- and in the circumstances, the possession of the flat should be given without any further delay as the said interest is likely to be more than the dues. Interest under Section 18(1) of the Act accrues only by way of an order under Section 38 of the Act.
Also Read- Ashwani Gautam v. M/s ATS Infrasturcture Ltd. – Casemine
Therefore, on the date on which possession was offered by the respondents to the complainant i.e. 16.05.2019 no interest under Section 18(1) of the Act could have been deemed to have accrued. Therefore, the complainant was under an obligation to have paid the balance amount of Rs.12.81 Lakhs and taken possession of the property within fifteen days of the letter of possession. Keeping in view the above facts the following reliefs are granted: As provided in Section 18(1) of the Act, read with Rule 16 of the Punjab State (Regulation and Development) Rules 2017, the respondents shall pay interest w.e.f. 31.07.2015 till 10.07.2019 (two months from the offer of possession as per Section 19(10) of the Act) as per State Bank of India’s highest marginal cost of lending rate (as of today) plus 2% and this amount shall be paid within sixty days from this order. That the interest to be paid by the complainant for any delay in payment would also be the State Bank of India’s highest marginal cost of lending rate (as of today) plus 2%. iii. The complainant would be bound to pay any outstanding amounts, as per the agreement, before taking possession of the unit. The complaint is accordingly disposed of as partly allowed. File be consigned to record room and copy of the order be provided to both the parties free of costs.
Also Read- Orders/ Judgements by Adjudicating Officer – RERA Punjab
This post is written by Riya Singh.
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