Haryana Real Estate Appellate Tribunal Grants Refund and Interest to Homebuyers in Cosmos Express 99 Project

In a recent decision, the Haryana Real Estate Appellate Tribunal addressed Appeal No. 1392 of 2019 between Abhishek Agarwal and Monal Agarwal (Abhishek and Monal), who were the appellants, and M/s Cosmos Infra Engineering India Private Limited (Cosmos Infra), the respondent. The dispute revolved around the refund of a deposited amount for a flat booking in the "COSMOS EXPRESS 99" project in Gurugram. Abhishek and Monal sought a refund, while Cosmos Infra claimed non-payment by Abhishek and Monal. The Tribunal, consisting of Shri Inderjeet Mehta and Shri Anil Kumar Gupta, heard arguments from both parties and rendered its decision on 4th January 2023.

Background:

Abhishek and Monal had booked a flat in the Cosmos Express 99 project in response to the advertisement by Cosmos Infra in 2011. They paid a registration fee of Rs. 2,00,000 and an additional amount of Rs. 1,70,000 in April 2011. The parties executed a Flat Buyer's Agreement (FBA) on 7th February 2012. As per the agreement, possession was to be delivered by 21st July 2015. However, Cosmos Infra failed to hand over possession on the due date, leading Abhishek and Monal to file a complaint seeking a refund of their deposited amount.

The Tribunal's Decision:

After considering the arguments and reviewing the material on record, the learned Authority disposed of the complaint in its order dated 10th April 2019. The Tribunal granted the relief of possession to Abhishek and Monal along with interest on delayed possession. The relevant directions given by the Tribunal in the order were as follows:

Cosmos Infra was directed to pay interest at the prescribed rate of 10.70% per annum on the amount deposited by Abhishek and Monal from the due date of possession until the date of offer of possession.

The arrears of interest accrued at 10.70% per annum were to be paid to Abhishek and Monal within 90 days from the date of the order, followed by monthly payments of interest until the possession was handed over.

Abhishek and Monal were directed to pay any outstanding dues, if any, after adjusting the interest for the delayed period.

Cosmos Infra was directed not to charge anything from Abhishek and Monal that was not part of the Flat Buyer's Agreement.

Cosmos Infra was directed to charge interest on the due payments from Abhishek and Monal at the prescribed rate of 10.70%, similar to the interest granted to them in case of delayed possession.

The project's lack of registration led to the issuance of a notice under Section 59 of the Real Estate (Regulation and Development) Act, 2016, to Cosmos Infra for violation of Section 3(1) of the Act.

The registration branch was instructed to issue a show cause notice to the builder, Cosmos Infra, under the Act, asking why a penalty of 10% of the project's cost should not be imposed.

Analysis:

Abhishek and Monal contended that since the possession was not handed over on the due date, they were entitled to a refund of the entire amount deposited, along with interest. They relied on the judgment in M/s Newtech Promoters & Developers Pvt. Ltd. vs. State of UP & Ors., which emphasized the importance of timely possession and the rights of homebuyers under the Real Estate (Regulation and Development) Act, 2016. On the other hand, Cosmos Infra argued that the project was not registered with the Real Estate Regulatory Authority (RERA) and, therefore, was not covered by the provisions of the Act. Additionally, they contended that Abhishek and Monal did not pay the outstanding dues, justifying their non-delivery of possession.

The Tribunal, while considering the arguments presented by both parties, examined the provisions of the Real Estate (Regulation and Development) Act, 2016. Referring to the Supreme Court judgment, the Tribunal noted that Abhishek and Monal's right to claim a refund crystallized when possession was not delivered within the agreed-upon timeframe, irrespective of the project's registration status. The Tribunal opined that the Act does not provide any exemption for unregistered projects when it comes to delivering possession within the stipulated time.

Conclusion:

In the Haryana Real Estate Appellate Tribunal's decision in Appeal No. 1392 of 2019, Abhishek Agarwal and Monal Agarwal were granted a refund of their deposited amount, along with interest, for their booking in the Cosmos Express 99 project. The Tribunal clarified that the right to claim a refund arises when possession is not delivered within the agreed timeframe, regardless of the project's registration status. This ruling reiterates the importance of timely possession and the protection offered to homebuyers under the Real Estate (Regulation and Development) Act, 2016.

Note: The information provided in this article about Haryana Real Estate Regulatory Authority (HRERA) is for informational purposes only. It is not intended as legal or professional advice and readers should consult qualified professionals for advice specific to their circumstances. The information provided in this article is based on the Appeal No.1392 of 2019 before the Haryana Real Estate Regulatory Authority

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