Builder Fails To Provide Monthly Returns On Booked Unit, Haryana RERA Orders Refund To Complainant

Background facts

The complainant booked a 230 sq. ft. unit in the builder's (Respondent) commercial project, Landmark Cyber Park, located in Sector 67, Gurgaon, by entering into a Memorandum of Understanding with the builder on 21.02.2012, paying the total amount of Rs. 46,00,000 at one time.

As per Clause 4 of the Memorandum of Understanding (MOU), the builder promised to pay the complainant Rs. 46,000 as an assured return/rent on a monthly basis, payable quarterly, until the date of possession or for three years, whichever is earlier.

However, the builder failed to pay any assured return amount since November 2013. Aggrieved by the builder's conduct, the complainant filed a complaint before the authority seeking a refund of the amount paid with interest.

Contentions of Builder

The builder contended that the complainant paid Rs. 46,00,000 towards the sale price as per the terms of the MOU. However, in addition to this amount, the complainant was also required to make other payments such as External Development Charges (EDC)/Internal Development Charge (IDC), Interest Free Maintenance Security Charges (IFMS), and advance maintenance charges.

The builder further contended that, according to the MOU, it was specifically agreed that the builder would pay the complainant Rs. 46,000 every month as an assured return, payable quarterly until the date of possession or for three years, whichever came earlier. However, there was no specific time limit provided in the MOU for handing over possession of the unit, as the unit was sold on an assured return plan.

Observation and direction by Authority

Since there was no Builder Buyer Agreement (Agreement for Sale) between the complainant and the builder, the Authority referred to the Supreme Court case Pioneer Urban Land & Infrastructure Ltd. Versus Govindan Raghavan to decide the possession date of the unit.

In that case, the Court ruled that buyers should not have to wait indefinitely for possession and are entitled to a refund with compensation if there is no stipulated delivery period. The Supreme Court held that three years is a reasonable time for completion if there is no agreement for sale between the parties.

Therefore, referring to the Pioneer Urban Land & Infrastructure Ltd., the Authority determined that the possession date will be three years from the signing of the MOU, i.e., 21.02.2015.

Further, the Authority observed that the unit was allotted through an MOU dated 21.02.2012, with the possession date set as 21.02.2015. The Occupancy Certificate was received on 26.12.2018, and the complainants surrendered the unit on 18.02.2022 by filing the complaint.

The Authority referred to Regulation 11(5) of the Haryana Real Estate Regulatory Authority Gurugram (Forfeiture of Earnest Money by the Builder) Regulations 2018, which states:

"Scenario prior to the Real Estate (Regulations and Development) Act, 2016 was different. Frauds were carried out without any fear as there was no law for the same. But now, in view of the above facts and taking into consideration the judgments of the Hon'ble National Consumer Disputes Redressal Commission and the Hon'ble Supreme Court of India, the Authority is of the view that the forfeiture amount of the earnest money shall not exceed more than 10% of the consideration amount of the real estate, i.e., apartment/plot/building, as the case may be, in all cases where the cancellation of the flat/unit/plot is made by the builder in a unilateral manner or the buyer intends to withdraw from the project. Any agreement containing any clause contrary to the aforesaid regulations shall be void and not binding on the buyer."

Therefore, the Authority directed the builder to refund the paid-up amount of Rs. 46,00,000 after deducting 10% of the sale consideration of Rs. 46,00,000 as earnest money, along with an interest rate of 10.85% per annum.

Case – Reena Devi & another Versus M/s Landmark Apartments Private Limited

Citation – Complaint no. 465 of 2022