BEFORE THE TAMIL NADU REAL ESTATE REGULATORY AUTHORITY, CHENNAI Quorum : Mr. Sunil Kumar, LP.S (Retd), M.A, LLB, Hon’ble Single Member R.C.P Nos. 3 and 4 of 2022 1. Mr. R. Thiyagarajan S/o Ramakrishnan 2. Mrs. T. Jayashree W/o R. Thiyagarajan wR.C.P No. 3 of 2022 1. Mr. R. Thiyagarajan S/o Ramakrishnan 2. Mrs. T. Jayashree W/o R. Thiyagarajan Vs M/s. Ozone Projects Pvt Ltd., Rep. by its Director, Mr. Vasudevan Sathyamoorthy ..Respondent Complainants Rep. by M/s. Yusuf $ Q, Advocates. Respondent. : Rep. by M/s. A.R. Vishwaram, Advocates. Heardon :; 13/06/2023 Deliveredon : 09/08/2023 ORDER The above complaints by the complainants are filed under Section 31 of the Real Estate (Regulatory and Development) Act, 2016 (hereinafter referred to as RERA Act) read with Rule 38 of the Tamil Nadu Real Estate (Regulation and Development), Rules, 2017 (hereinafter referred to as TNRERA Rules). The above complaints are filed claiming refund of the amounts paid by thecomplainants to the respondent towards the purchase and construction of the respective booked flats and costs. 2. Since both the complaints are relating to the same project of the respondent and same points arise for determination, the complaints are heard together and disposed of by a common order. 3. Averments of the complainants in RCP 3/2022, in brief, as follows: (a) The complainants purchased a flat in the respondent's project by name “Metrozone-Pincale Tower”. The respondent allotted them a flat no. AG 1024 on payment an advance amount of Rs.2,00,000/-. The total sale consideration for the un-divided share was agreed at Rs.20,04,000/-. The sale agreement and the construction agreement were both entered on 31/05/2016. However, the respondent avers that he was not given any allotment letter. The complainant avers that respondent had promised to complete and deliver the flat in March 2019 with a grace period of 6 months projecting the final delivery on September 2019. The construction agreement projected the cost of construction as Rs.55,43,715/-, this made the total consideration for the UDS and the construction as Rs.75,47,715/- whereupon, the complainant was sanctioned a loan of Rs.98,22,160/- (total amount sanctioned for the RCP 03/2022 and RCP 04/2022 together) by the financial institution under subvention scheme. The subvention scheme implied that the pre-EMI cost was to be borne by the respondent till he completes the project where after the liability of payment shifted to the complainant. The amount of Rs.42,30,860/- was directly disbursed to the respondent from the bank on 05/08/2016. (b) The complainant further avers that the respondent had issued receipts for Rs.17,73,704/- as the amount of Rs.42,30,860/- was disbursed towards Flat No. AG 1023 and 1024. The complainant avers that there was no progress [TRUE Copy;in the construction work and it remained at the starting stage Itself. The complainant, therefore, decided to cancel the booking of the flat and communicated the same through E-Mail to the respondent on 18/05/2018 and in response the respondent committed to refund the money paid by the complainant. The complainant avers that the respondent failed to refund the money even by 29/04/2020. The complainant avers that from May 2019 the financing bank starting recovering EMI’s from the complainant. (c) The complainant further approached the respondent to refund the money to the bank which had been obtained as loan sanctioned to the complainant. The complainant also sought refund of Rs.2,00,000/- paid by him to the respondent. The respondent reacted by refunding a sum of Rs.30,00,000/- (Combined amount for RCP 3/2022 and RCP 4/2022 put together) out of the total amount of Rs.42,30,860/- which had been transferred from the bank to the respondent which left an amount of Rs.14,59,614/- (Combined balance for RCP 3/2022 and RCP 4/2022) yet to be refunded to the complainant in addition to Rs.2,00,000/- paid by him directly as on May 2021. This left an amount of Rs.14,59,614/- + Rs.4,00,000/- (Combined amount to be refunded for RCP 3 and 4 of 2022) Since, the amount was not repaid, the complainant’s loan account was declared as NPA on 14/12/2021 and the financing bank initiated proceeding against the complainant for the recovery process. Aggrieved, the complainant prays for refund of Rs.9,29,807/- with interest along with compensation and cost. 4. Averments of the complainants in RCP 4/2022, in brief, as follows: (a) The complainants purchased a flat in the respondent's project by name “"Metrozone-Pincale Tower”. The respondent allotted them a flat no. AG 1024 ‘on payment an advance amount of Rs.2,00,000/-. The total sale consideration : TRUE COPY,for the un-divided share was agreed at Rs.20,04,000/-. The sale agreement and the construction agreement were both entered on 31/05/2016. However, the respondent avers that he was not given any allotment letter. The complainant avers that respondent had promised to complete and deliver the flat in March 2019 with a grace period of 6 months projecting the final delivery on September 2019. The construction agreement projected the cost of construction as Rs.55,43,715/-, this made the total consideration for the UDS and the construction as Rs.75,47,715/- whereupon, the complainant was sanctioned a loan of Rs.98,22,160/- (total amount sanctioned for the RCP 03/2022 and RCP 04/2022 together) by the financial institution under subvention scheme. The subvention scheme implied that the pre-EMI cost was to be borne by the respondent till he completes the project where after the liability of payment shifted to the complainant. The amount of Rs.42,30,860/- was directly disbursed to the respondent from the bank on 05/08/2016. (b) The complainant further avers that the respondent had issued receipts for Rs.17,73,704/- as the amount of Rs.42,30,860/- was disbursed towards Flat No. AG 1023 and 1024. The complainant avers that there was no progress in the construction work and it remained at the starting stage itself. The complainant, therefore, decided to cancel the booking of the flat and communicated the same through E-Mail to the respondent on 18/05/2018 and in response the respondent committed to refund the money paid by the complainant. The complainant avers that the respondent failed to refund the money even by 29/04/2020. The complainant avers that from May 2019 the financing bank starting recovering EMI's from the complainant. (c) The complainant further approached the respondent to refund the money to the bank which had been obtained as loan sanctioned to the [TRUE COPY.complainant. The complainant also sought refund of Rs.2,00,000/- paid by him to the respondent. The respondent reacted by refunding a sum of Rs.30,00,000/- (Combined amount for RCP 3/2022 and RCP 4/2022 put together) out of the total amount of Rs.42,30,860/- which had been transferred from the bank to the respondent which left an amount of Rs.14,59,614/- (Combined balance for RCP 3/2022 and RCP 4/2022) yet to be refunded to the complainant in addition to Rs.2,00,000/- paid by him directly as on May 2021. This left an amount of Rs.14,59,614/- + Rs.4,00,000/- (Combined amount to be refunded for RCP 3 and 4 of 2022) Since, the amount was not repaid, the complainant’s loan account was declared as NPA on 14/12/2021 and the financing bank initiated proceeding against the complainant for the recovery process. Aggrieved, the complainant prays for refund of Rs.9,29,807/- with interest along with compensation and cost. 5. Counter averments of the respondent, in brief, as follows: (a) The learned counsel for the respondent avers that they are leading property and Infrastructure Development Company well known in the real estate industry for its values of customer service transparency and quality. The respondent avers that this project of which the complainant is a part is spread over 40 acres with about 8.5 million sq.ft. of built-up area. The respondent concurs with the complainants with regard to the basic details regarding allotment of flat no. AG 1023 in RCP No. 3/2022 and AG 1024 in RCP 4/2022. The respondent avers that they had obtained planning permission during April 2009 and had lost some two years even before the project could be launched. The respondent avers that the complainants flat were in a project which had 26 residential towers of which had some 2 level basements while others had 3 level basements. The complainant avers that the planning permission obtained was valid only for a period of 3 years within i TRUE COPY|which it was practically not possible to complete the entire development due to which the respondent had to approach the CMDA once again for the renewal of the plan during October 2011 which finally got approved during August 2013. (b) The respondent avers that the entire residential development had a common basement and that he could undertake construction only in a phased manner. The respondent avers that he had completed and handed over several units in his project to other allottees. In 2016, the Real Estate (Regulation and Development) Act, 2016 came into being wherein this project came in the category of on-going project resulting in further delay. (c) Despite these limitations, the respondent avers that he put in his best efforts which faced further hindrances due to natural calamities such as November/December 2015 Floods, Vardah, GST etc. preventing him from completing the project within the mutually agreed time frame. The respondent also suffered 3" party claims consuming his time and money. The respondent avers that several allottees did not make milestone payment which had a cascading cash flow which affecting the project. The respondent avers that the conditions stipulated in the RERA Act put heavy financial burden on him. The respondent finally admits that he was liable to repay the sale consideration amount to the complainant and prays for 8 months’ time to arrange for the money, so that he could refund the same to the complainant. 6. An attempt to settle the matter amicable has failed. 7. The complainant and the respondent have filed their respective evidences on affidavit with documents. =e Ses [TRUE COPY] Wie Se8. On the basis of rival contentions on the parties, the following points arise for determination: (i) Is there any delay in handing over the complainant’s unit entitling him to claim refund with interest. (ii) What are the reliefs made out? 2. Answer for the point (i): (a) The respondent entered into the sale agreement with both the complainants in the RCP 3/2022 and RCP 4/2022 on 31/05/2016 (EX-A2 in both the RCPs). The construction agreement in both the RCPs was also entered on the same date (EX-A3 in both the RCPs). The total consideration for the units allotted to the complainants in both the RCPs was Rs.75,47,715/- in each of the RCPs. The complainants have paid a sum of Rs 2,00,000/- in each of the RCPs from their own resources. The construction agreement vide clause 7 stipulates the handing over which is laid down in Annexure-3 as March 2019 with a grace period of 6 months. The very same clause goes on to provide the Force Majeure clause which has been submitted by the respondent as his savior as a cause for the delay in handing over. The complainants have submitted in both the RCPs that their units had not been handed as agreed. The contention of the complainant's is strengthened with the respondent’s own acceptance, where, in his counter, he has prayed for a time of 8 months to arrange money so that he could refund the amount back to the complainant. This clearly amounts to admitting that the flat was not handed over even at the time of filing the Counter to these complainants. He has committed as below in the counter filed by him. TRUE COPY(b) “in the above circumstance, it is most respectfully prayed that this Hon’ble Tribunal may be pleased to allow 8 months time to refund the sale consideration amount and thus render justice.” The respondent has very clearly admitted the delay in handing over and even prays for a time of 8 months to refund the money received from the complainants. In such a situation, Section 18 of the RERA Act clearly lays down:- Section 18:- “18, Return of amount and compensation.—(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 (6) 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. TRUE COP(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.” Since the respondent has failed to deliver the completed unit as agreed, he is left with no other option but to refund the money paid to him by the complainants with interest. The respondent has himself accepted the same and has sought for a time of 8 months to make the refund. This makes the complainant entitled to refund of the money paid by him with interest and thus the first point is answered accordingly. 10. Answer for Point No: (ii):- (a) __ In both the complaints the complainants are entitled to the refund of the money paid by them with interest. (b) As per Rule 18 of the TNRERA Rules, the rate of interest payable shall be the current highest marginal cost of lending rate of interest of State Bank of India (SBI) plus 2% per annum. Hence, the complainant is entitled for the interest at the rate of 7.30% per annum which was the marginal cost of lending rate of interest of SBI at the time of filing the complaint plus 2% per annum, i.e., 9.30% p.a for the entire amount paid from the date of respective payment till repayment by the respondent. TRUE COPY.(c) _ In view of the answer for the point no. (i) the amounts, interests and other charges, which the complainants are entitled to recover from the respondent as follows; RCP 3 of 2022:- The complainants are entitled to get Rs. 9,29,807/- from the respondent with interest at the rate of 7.30%, which is the marginal cost of lending rate of interest of SBI at the time of filing the complaint plus 2% per annum, i.e., 9.30% p.a for the entire amount paid from the date of respective payment till repayment by the respondent. Apart from the above, the complainants are entitled to a sum of Rs.25,000/- towards the litigation cost. RCP 4 of 2022:- The complainants are entitled to get Rs. 9,29,807/- from the respondent with interest at the rate of 7.30%, which is the marginal cost of lending rate of interest of SBI at the time of filing the complaint plus 2% per annum, Le., 9.30% p.a for the entire amount paid from the date of respective payment till repayment by the respondent. Apart from the above, the complainants are entitled to a sum of Rs.25,000/- towards the litigation cost. 11. Inthe result, the respondents are directed as follows:- (i) The respondent shall pay the entire amount at the interest rate and cost as per the findings in answer for Point No. (ii) in Para No. 10 of this order within 30 days of issue of this order. (ii) The charge of the aforesaid amount as encumbrance, if any, shall be on the flat booked by the complainants till repayment of the claim as per this order. The office of this Forum is directed to 10intimate the encumbrance created by charge in the order to the Sub-Registrar concerned. (iii) On repayment of the claim as per the order, the complainants shall execute the cancellation of the construction agreement and sale deed, as the case may be, at the expense of the respondent. (iv) The complainant is at liberty to move the Adjudicating Officer on his prayer on compensation. sd/-09/08/2023 SUNIL KUMAR, |P.S (Retd) ‘SINGLE MEMBER ‘TNRERA, CHENNAI RCP No. 3 of 2022 LIST OF WITNESSES ~ Mr. R. Thiyagarajan ~ Mrs. T. Jayashree RW-1— Premnath LIST OF DOCUMENTS FILED BY THE COMPLAINANT | Ex.Nos Date Documents Name ExAl = [ Receipt Ex.A2 | 31/05/2016 Sale Agreement Ex.A3 | 31/05/2016 Construction Agreement Ex.A4 | 29/06/2016 Letter from the Respondent ExAS | 05/08/2016 HDFC Loan Agreement ‘exe | 06/08/2016 Receipt Ex.A7 _ Cancellation and Acceptance request Ex.A8 Receipts Ex.A9 Mail | Ex.A10 | = Pian and Sketch | [exalt = Photos Ex.A12 = I Aadhar Card a TRUE COPYLIST OF DOCUMENTS FILED BY THE RESPONDENT-NIL RCP No. 4 of 2022 LIST OF WITNESSES Mr. 8. Thiyagarajan Mrs. T. Jayashree RW-1 --- Premnath LIST OF DOCUMENTS FILED BY THE COMPLAINANT Date Documents Name ||| | Receipt 7 | 31/05/2016 Agreement for Sale 31/05/2016 Construction Agreement 29/06/2016 Letter from the Respondent 05/08/2016 | _ HDFC Loan Agreement | | 06/08/2016 Receipt = Mail = Receipts | a ii Mail rey - Plan and Sketch Photos = Aadhar Card LIST OF DOCUMENTS FILED BY THE RESPONDENT-| ¥ Sd/- 09/08/2023, CERTIFIED TO BE TRU ae SUNIL KUMAR, L.P.S (Retd) uy SINGLE MEMBER $ TNRERA, CHENNAI TRUE COPY 2