1

RESERVED JUDGMENT

BENCH-1

THE UTTAR PRADESH REAL ESTATE APPELLATE TRIBUNAL,

AT
LUCKNOW.

Appeal NO. 509/2020

1. Arvind Kumar Gautam.

2. Dr. Renu Gautam. …………Appellants.
Versus

1. U.P. Real Estate Regulatory Authority.

2. Omaxe India Trade Center Pvt. Ltd. ……………Respondents.

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Hon’ble Mr. Justice (Dr.) D. K. Arora, Chairman.

Hon’ble Mr. Kamal Kant Jain, Technical Member.

1. The present appeal has been preferred by Sri Arvind Kumar Gautam and Dr.
Renu Gautam (hereinafter referred to as the ‘appellants’) under Section
44(1) of the Real Estate (Regulation and Development) Act 2016
(hereinafter referred to as ‘the Act 2016’) against the order dated 27.07.2020
passed by the U.P. Real Estate Regulatory Authority, Regional Office,
Gautam Budh Nagar (hereinafter referred to as the ‘Regulatory Authority’)
in Complaint No. NCR144/10/0186/2019 whereby the following directions
were given:--

(i) The respondent is directed to ensure delivery of possession of the unit

of complainants along with OC/CC after completing all the facilities
as per allotment letter/agreement by 31.10.2020 and execute registry
after taking due stamp fee.

(ii) The respondent shall ensure payment of delay interest to the

complainants at the rate of MCLR+1% from 09.09.2016 till receipt of
OC/CC or offer of possession, whichever is later. It is clarified that
this amount of interest shall be adjusted towards final payment. If the
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amount of interest exceeds the amount of final payment, then the

excess amount be returned to the complainants. The delay interest
shall not be calculated for the period during which the amount of
assured return has been paid to the complainants. Keeping in view the
lockdown for prevention from Covid-19 the delay interest shall not be
calculated from 25.03.2020 to 25.09.2020.

(iii) The respondent is directed to issue offer of possession along with

OC/CC as directed above.

(iv) The interest has been defined in Section 2 (za) (i) of the Act 2016 that
if any rate of interest is charged by the promoter for default of the
allottee then the same rate of interest will be paid by the promoter for
his default to the allottee. The rate of interest notified by the State
Government is MCLR+1%.

(v) The respondent is directed that the amount will be payable by the
allottee after uploading on the website the information regarding
details of area of the unit at the time of agreement, the details of
revised area of the project and the basis of calculation of area of the
unit of the complainant.

(vi) Complainants to take possession of their unit by paying the amount as

directed above.

(vii) The respondent shall ensure to refund the deposited amount to the
complainants with interest at the rate of MCLR+1%, within 45 days
after 31.10.2020, if they are not interested in taking possession of the
unit, but after adjusting the amount of assured return paid earlier by
the respondent to the complainants.

2. The facts of the case, in brief, as culled out from the memo of appeal, are
that Omaxe India Trade Center Private Limited (respondent no. 2) advertised
its projects in several newspapers and on its website giving 12% assured
return on investment.

2.1 The appellants, based on the advertisements, claims and assurances of

respondent no. 2’s sales team, purchased a shop and paid 10% of the cost of
the shop i.e. Rs.10,00,000/- (rupees ten lacs) to respondent no. 2 by cheque
dated 23.10.2012.
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2.2 After receiving the booking amount of rupees ten lacs, respondent no. 2
issued allotment letter dated 08.03.2013 in favour of the appellants and
allotted shop No. A-18 at 2nd Floor, admeasuring 1326 sq. ft. in the project
called “India Trade Centre”, situated at Plot No. C-1, Sector Alpha-II,
Greater Noida, Gautam Budh Nagar.

2.3 According to Clause 39(a) of the Allotment Letter dated 08.03.2013,

respondent no. 2 had to complete the construction of the unit within 36 (with
a grace period of 6 months) months from the date of signing of the allotment
letter. There is a delay of more than 60 months in delivery of possession of
the shop/unit.

2.4 As per Clause 14 of the Allotment Letter “in case of decrease of the
allotment area of the said Unit, the amount received in excess by builder
over and above the total cost of the said Unit, based on the changed area,
shall be refunded/adjusted by the respondent to the allottee(s)”.

2.5 As per Clause 15 of the Allotment Letter “if the super area of the said unit is
increased/decreased then the amount towards the increased/decreased area
shall be paid/adjusted in manner detailed in clause 14 of this agreement”.

2.6 Respondent no. 2 has decreased the allotted area of the shop from 1326 sq.
ft. to 884.74 sq. ft. (difference of area =441.53 sq. ft.) without informing or
taking consent of the allottee and denied the refund of the amount
(approximately Rs. 27 lacs plus interest accrued) so received by respondent
no. 2 against the decreased area of 441.53 sq. ft.

2.7 On 08.03.2013 respondent no. 2 issued an Addendum to the allotment letter.

According to this Addendum, respondent no. 2 will pay to the allottee per
month commitment charges (Assured Monthly Return) against the initial
advance paid by the allottee during the commitment charges period.
According to para (c) of this Addendum, respondent no. 2 will also pay
commitment charge till possession, against the Trench Installment to the
allottee in the manner provided in Annexure-B to the Allotment Letter
against each Trench Installment from the month following the date of
realization of such Trench Installment by respondent no. 2. Respondent no.
2 has stopped commitment charges to the allottees since December 2018.
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2.8 On 14.01.2019, respondent no. 2 offered possession without receiving any

approval from GNIDA for OC/CC of the said shop. A demand letter was
also sent along with the said offer of possession asking the allottee to pay
Rs.9,78,342.11p. as their balance.

2.9 On 15.04.2019 Part Occupancy Certificate was issued by GNIDA in the

name of AVJ Towers and on the basis of this Part Occupancy Certificate,
respondent no. 2 issued a letter dated 04.05.2019 to the allottees falsely
stating that construction on the said commercial complex has already been
completed and all the requisite permissions from the concerned authority
have already been received by respondent no. 2, which is not true at all.
Respondent no. 2 has never received the Full Occupation
Certificate/Completion Certificate from the concerned authorities and
without obtaining the Full OC/CC respondent no. 2 offered possession of the
shop to the appellants. 85% construction work of the project is pending and
the building is unsafe for occupation. Respondent no. 2 has also imposed
common area maintenance charges without handing over possession of the
shop.

2.10 The appellants, feeling aggrieved and cheated by the demand letter from
respondent no. 2 as well as delay in construction, reduction in the area of
shop and non-payment of delay penalty, filed a complaint before the
Regulatory Authority.

2.11 Respondent no. 2 filed counter of the complaint and the appellants filed
rejoinder to the counter filed by respondent no. 2 and reiterated the
allegations made in the complaint. Written arguments were also filed by the
appellants before the Regulatory Authority with changes in the pleas and
opting for full refund with interest.

2.12 During pendency of the complaint the Regulatory Authority ordered

inspection and detailed measurements of the disputed property by the
technical team of RERA. The technical team, after inspection, submitted its
report and opined that there is reduction of approximately 441.53 sq. ft. in
the super area of shop no. A-18 first floor (erstwhile second floor). The
technical team also mentioned in its report that respondent no. 2 has not
taken any Occupancy Certificate/Completion Certificate for the project and
85% construction work is still pending and the building is unsafe for
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occupation and not yet certified by experts for structure, fire safety and other
parameters of live loading as mandatory based on NBC and regulatory
norms of the GNIDA.

2.13 The Regulatory Authority vide order dated 27.07.2020 decided the
complaint of the appellants along with four other complaints, with the
directions as mentioned in para 1 above.

3. The appellants have challenged the impugned order dated 27.07.2020 passed
by the Regulatory Authority, on the following grounds:--

(i) Because the impugned order dated 27.07.2019 passed by the

Regulatory Authority has incorrectly, without any such binding
clauses/reference in seller-buyer agreement, observed that “according
to law complainant is entitled to get only one financial benefit, in
other words, in between assured monthly return and interest on delay,
only one benefit can be given” as allottee has purchased this property
at 22% higher premium compared to other schemes in same property,
also paid 100% cost upfront. Assured Return like Ponzi scheme (now
banned by RBI) is return on investment and allottee has paid 30%
Income Tax on assured return every year apart from 12% ST/GST on
assured return, deducted by respondent no. 2 at source. Assured
return is related to upfront payment of capital to the builder and
builder utilized same at will to his business avoiding high interest
based borrowing from bank. Respondent no. 2 used part possession
as a trick to stop payment arbitrarily of these commitment charges,
that too 4 months in advance.

(ii) Because according to the clause 39 ( a ) of the allotment letter dated

08.032013 respondent no 2 has to complete the construction of the
Unit within 36 months from the date of the signing of the allotment
letter and further grace period of 6 months is allowed. There is a delay
of more than 60 months in the delivery of possession of the shop/Unit,
causing loss to complainants, of possible Revenue or Rent out of
property. Work is at halt on 85% of FAR.

(iii) Because the respondent no. 2 has decreased the allotted super area of
the shop from 1326 sq. ft. to 884.74 sq. ft. (difference of area=441.53
sq. ft.) without informing the allottees and denied the refund of the
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amount (approximately Rs.27 lakh plus interest) so received by

respondent no. 2 against the decreased area of 441.53 sq. ft.

(iv) Because on 15.04.2019 only for 15% of FAR, a Part Occupancy

Certificate was issued by the GNIDA in the name of AVJ Towers
(Title holder of the said plot) and on the basis of this Part Occupancy
Certificate, respondent no 2 has issued a letter dated 04.05.2019 to the
allottee wrongly stating that construction on the said commercial
complex has already been completed and all the requisite permissions
from the concerned authority have already been received by the
responded no 2. On ground the work is yet to complete on 85 % of
FAR and all services and structures are yet to be certified for safety.
Learned Authority should take cognizance of incorrect information
uploaded on RERA site and submitted by builder for obtaining
wrongful part OC. Also the incorrect information in advertisements or
prospectus and false and the statements made by respondent no.2, and
the appellant/complainant should be compensated by the promoter by
returning his entire amount along with applicable interest and
compensation.

(v) Because the respondent no. 2 has never received the Full Occupation
Certificate/Completion Certificate, as mandatory for safety of
occupants and ban imposed by GNIDA due to title discrepancies. On
ground no Registry is allowed by the Registrar since the building is
unsafe and title dispute not settled.

(vi) Because the respondent no 2 stopped payment of assured return even

4 months prior to Part Occupancy Certificate without obtaining the
full occupancy certificate/completion certificate from the authority
concerned and the construction work for 85% of the project is still
pending turning the building as unsafe for the occupation. It is further
aggravated by demanding common area maintenance charges without
possession of the shop and registry of property, which is against the
mandate of Honorable Supreme Court, in numerous judgments.

(vii) Because the RERA, Bench 2, had ordered physical verification of the
disputed property by the technical team of RERA, which carried out
joint inspection in presence of all stakeholders and submitted its report
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to RERA Bench on 17 March 2020. According to the Clause 9 of the

findings of the report submitted by technical team (RERA), it has
been very categorical mentioned that there is approximately 441.53 sq
ft. reduction in the super area of the shop A 18, first floor. In the
report of the technical team of RERA it was mentioned that
respondent no. 2 has not taken Full Occupancy
Certificate/Competition Certificate from any authority for the project
and construction work for 85 % of the project is still pending and the
building is unsafe for occupation and not yet certified by experts for
structure, fire safety and other parameters of live loading as
mandatory based on NBC and regulatory norms of the GNIDA.

(viii) Because the respondent no 2 has Committed Criminal contempt and

intended fraud by purposely hiding title discrepancies from RERA
Court and about stay on Registry of the project by GNIDA, which is
in effect when property was sold to appellants and now even when
illegal occupation is being suggested by Respondent no 2. This turns
part of the judgment for occupation as erroneous, bad in law and not
executable. Reference about the same is made in Joint Technical
Team’s findings that the lease deed from the GNIDA is in the name of
AVJ Towers Private Limited and not respondents no 2.

(ix) Because allottee sent a mail dated 30.09.2020 to the Managing

Director and other officials of respondent no. 2 in reference to RERA
court order dated 27.07.2020 against complaint No.
NCR144/10/0186/2019, whereas the operative order under para 7
provides an option to the allottee to withdraw from project Omaxe
ITC and a legal notice dated 07.09.2020 was also sent to respondent
no. 2, under protest and considering the last para of the judgment as
illegal and bad in the eyes of law, and withdrawing from the project
demanding refund of full capital with interest as per orders of RERA
court in Complaint No. NCR144/10/0186/2019, but there was no
response from respondent no. 2 either on the legal notice dated
07.09.2020 or mail dated 30.09.2020, rendering any reconciliation
efforts fruitless.

4. The appellant has prayed for the following reliefs:--

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(a) To set aside only the part of direction 7 of the impugned order dated
27.07.2020 passed by the Regulatory Authority, in complaint no NCR
144/10/0186/2019, titled Shri Arvind Kumar Gautam and Dr. Renu
Gautam Vs M/S Omaxe India Trade Centre Pvt. Limited wherein the
Learned Authority directed the respondent no. 2 that in case the
complainants don't want to take possession of the shop/unit then
respondent no 2 within 45 days after 31.10.2020 refund the amount
deposited by the allottee along with interest of MCLR + I% per
annum but the allottees who have earlier received Assured Monthly
return then the amount received as Assured Monthly return should be
adjusted in delay penalty.

(b) To allow the appeal and allow the allottee to withdraw from the
project due to reasons as explained and order the respondent no.2 to
pay entire amount deposited by the allottee along with interest of
MCLR + 1% per annum (as already ordered by the RERA Bench as
above), without making any recovery/adjustment for Assured Monthly
Return already paid since its neither linked to delay clause of buyer
seller agreement nor does it have any precedence to do so in law.
Assured return was a scheme separately sold by respondent at
substantial premium to other schemes and appellants paid ST/GST
and 30% IT on returns, which is non refundable.

(d) The Honorable Tribunal should take cognizance of the false

information and suppression of facts by the builder in selling the
property and uploading wrong documents on RERA portal in total
defiance of Sections 12 to 14 of the RERA Act and pass order for the
compensation for harassment and deep mental agony along with
litigation fee and expenses of Rs 500000/-.

(e) Pass any other/further order(s) which the Hon'ble Tribunal may deem
just and fit in the facts and circumstances of the present case and in
interest of justice.

5. Respondent no. 2 filed its objection/reply to the memo of appeal and

submitted that:

5.1 Respondent no. 2 is a Company registered under the Companies Act, 1956
having its registered office at 10, Local Shopping Center, Kalkaji, New
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Delhi and is engaged in the business of real estate and development of

Project ‘India Trade Center, Greater Noida’ situated at Plot No. C-1, Sector
Alpha-II, Greater Noida, District Gautam Budh Nagar, admeasuring 11584
sq. meters. Respondent no. 2 is formerly known as ‘A.V.J. Tower Pvt. Ltd.’

5.2 Respondent no. 2 is the lawful lessee and is in possession of Plot No. C-1,
admeasuring 11584 sq. meters, situated at Sector Alpha-II, Greater Noida,
District Gautam Budh Nagar and has been granted the requisite authority for
construction and development of a commercial project in the name and style
of ‘India Trade Center, Greater Noida (in short ‘Project’) and to undertake
allotment of shops/office space/premier suits/platinum floors/food court
spaces etc. in the said commercial project, in accordance with the lay out
plan/building plan of the project, sanctioned by Greater Noida Industrial
Development Authority (GNIDA) and lease deed executed by GNIDA for
the project.

5.3 In pursuance with the Act 2016 read with the U.P. Real Estate (Regulation
and Development) Rules 2016, the Regulatory Authority, upon
submission/uploading of all required sanctions, drawings, approvals etc. of
the Project, financial and other documents by respondent no. 2, registered
the Project with UPRERA vide registration No. UPRERAPRJ6205. All the
sanctions, drawings, approvals, financial and other information about the
Project and respondent no. 2 are uploaded on UPRERA website “up-rera.in”
and is available for inspection by general public.

5.4 The GNIDA has issued part occupancy certificate to respondent no. 2 on
15.04.2019 in respect of the project in which subject property is situated.
Even respondent no. 2 has mentioned the completion date of the project as
31.12.2020 while registering the Project with UPRERA, however,
respondent no. 2 has obtained part occupancy certificate on 15.04.2019 i.e.
well before the completion date (31.12.2020).

5.5 The appellants, after going through the general terms and conditions for
booking of shop, requested for booking of one Unit bearing No.
ITC/First/Shop/A-18, at a total sale consideration of Rs.90,11,588/- vide
application form dated 27.10.2012 under flexi payment plan, on the basis of
which the aforesaid shop was allotted to the appellants vide allotment letter
dated 08.03.2013.
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5.6 As per Flexi Payment Plan, which was opted by the appellants, the
appellants had to pay 10% amount at the time of booking; 40% of basic sale
price on 45th day + 50% additional cost; 50% of basic sale price on 365th day
of booking; and lastly 50% of additional cost +100% of PLC (if any) + lease
rent and other cost, if any, on offer of possession. The appellants remained
defaulter since the beginning for which reminders dated 01.02.2013 and
02.03.2013 were sent to the appellants.

5.7 The allotment agreement was signed on 08.03.2013 between the parties and
on the same day an ‘addendum’ to the allotment letter dated 08.03.2013 was
signed/executed, wherein it was agreed by the parties that commitment
charges (assured return) shall be paid @ Rs.44,410/- per month on
realization of Rs.41,82,295/- as per payment plan against the allotted unit
comprising super area of 1326.66 sq. ft. which was increased to Rs.86,234/-.
Payment of commitment charges (assured return) was started from
28.01.2013 and continued upto December 2018.

5.8 As per clause 39(a) of the Allotment Agreement dated 08.03.2013,

possession was to be handed over in 42 months from the date of signing of
agreement i.e. by September 2016, but the appellants signed an addendum
dated 08.03.2013 and opted for payment of commitment charges (assured
return) till offer of possession and accordingly respondent no. 2 has paid
commitment charges (assured return) till offer of possession.

5.9 Respondent no. 2 has paid commitment charges (assured return) to the
appellants upto December 2018 and offer of possession was sent on
14.01.2019. In the addendum dated 08.03.2013, there was a mandatory
condition that the Company shall pay the commitment charges during the
period commencing from the date of realization of payment of initial
advance and trenched installments in the manner as provided above till offer
of possession of the Unit. As per settled law commitment charges and
delayed penalty are not payable together. There is no delay, hence the
liability of delay penalty/interest does not arise.

5.10 Respondent no. 2 has received part occupancy certificate on 15.04.2019 after
completing the development work of the Unit in question. Thus, respondent
no. 2 has fulfilled its obligation towards the allotment letter dated
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08.03.2013 as well as addendum to the allotment letter dated 08.03.2013, but

the appellants have failed to comply their obligations.

5.11 As per order dated 27.07.2020 passed by the Regulatory Authority,

respondent no. 2 is ready to give possession and execute registry in favour of
the appellants. Respondent no. 2 is also ready to pay delay interest for the
balance period of 4 months i.e. January 2019 to April 2019 after adjusting
the period of commitment charges (assured return) and the period of lock
down.

5.12 In compliance of paragraph 5 of the operative portion of the order dated

27.07.2020 passed by the Regulatory Authority, respondent no. 2 sent a
letter dated 29.08.2020 to the Secretary, RERA mentioning the details of the
unit with the request to upload the detailed explanation of area as mentioned
in the letter on the website of general public and also sent a letter to the
appellants mentioning all dues and details of area.

5.13 After passing of the impugned order dated 27.07.2020, the appellants have
sent a legal notice dated 07.09.2020 to respondent no. 2 for withdrawal from
the project, which has been received in the office of respondent no. 2 on
22.09.2020, which is violation of the order dated 27.07.2020 passed by the
Regulatory Authority because the Regulatory Authority has clearly
mentioned that respondent no. 2 shall offer possession by 31.10.2020 and in
case of failure on the part of respondent no.2, the respondent no. 2 shall
refund the amount to the complainants/appellants within 45 days along with
interest @ MCLR+1% after adjusting the commitment charges (assured
return) paid to the complainants. In the legal notice the appellants have
demanded the deposited amount along with interest @ 18% p.a. within 7
days from receipt of the letter. Respondent no. 2 has already sent offer of
possession to the appellants in January 2019 and it is the appellants who are
not taking possession of the unit by clearing the dues.

5.14 Respondent no. 2 has sent reply to the above notice dated 07.09.2020 to the
appellants on 08.10.2020.

5.15 The appellants are investor and they do not want to take possession of the
Unit in question i.e. why they have filed false and baseless complaint and
instead of complying with the order of RERA dated 27.07.2020 they have
filed the present appeal just for lingering on the matter, which is not
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sustainable. The appellants have filed complaint before RERA for giving
possession of the Unit in question and when the respondent no. 2 is giving
possession of the unit, they are running away, which itself shows mala fide
act and conduct of the appellants.

5.16 In paragraph (d) of the ‘addendum’ to the allotment letter dated 08.03.2013,
the duration of payment of commitment charges (assured return) has clearly
been mentioned and accordingly the same has been paid to the appellants.

5.17 The offer of possession was sent as per payment plan and the development
has been carried out as per plan approved by GNIDA and the GNIDA has
granted part Occupancy Certificate in the month of April 2019 and
respondent no. 2 is ready to give possession but the appellants are not taking
possession intentionally and deliberately. Part Occupancy Certificate has
been issued by the competent authority after verifying the development
work, as such the allegations made by the appellants are false and
unsustainable.

5.18 Payment has been taken by respondent no. 2 from the appellants as per
payment plan opted by the appellants.

5.19 The grounds taken by the appellants in the present appeal are not tenable in
the eye of law, as such the appeal filed by the appellants is liable to be
dismissed.

6. The appellants filed reply to the objections of respondent no. 2 denying the
averments made by respondent no. 2 in its objections and reiterating the
averments made by the appellants in the memo of appeal. The appellants
further submitted that:

6.1 Lease deed of Plot No. C-1, situated at Sector Alpha-II, Greater Noida,
District Gautam Budh Nagar is in the name of AVJ Towers Private Limited
and respondent no. 2 has not paid proper stamp duty for name change before
GNIDA. There is a ban on registration of any property and a letter to this
effect from Commercial Branch of GNIDA has been issued to the
appellants, which turns possession offer by respondent no. 2 as illegal and
against law.

6.2 Respondent no. 2 has never received Full Occupation Certificate/Completion

Certificate from the concerned authority and without obtaining the aforesaid
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certificate, offering possession of the shop/unit to the appellants. This is

illegal action just to stop payment of assured returns and charge maintenance
from the appellants on false claims.

6.2 Respondent no. 2 has provided two waivers to the appellants. Once a waiver
is provided to the appellants, the issue of defaulter does not arise. As per
conditions of assured return, respondent no. 2 only started paying to the
appellant once the outstanding amount of respondent is paid.

6.3 As far as decrease in the area of the shop is concerned, there are categorical
findings in clause 9 of the report of Technical Team of RERA that there is
reduction of approximately 441.53 sq. ft. in the super area of Shop No. A-18
(first floor). In the report of the Technical Team of RERA it was mentioned
that respondent no. 2 has not taken any Occupancy Certificate/Completion
Certificate from any authority for the project. Respondent no. 2 also failed
to abide by RERA order to upload all details. This is the reason the
appellants are exercising their option to withdraw from the project as per
Regulatory Authority’s order and are claiming return of money paid along
with interest.

6.4 The appellants are aggrieved by the second part of Clause 7 of the impugned
order dated 27.07.2020 and claim relief only to set aside the second part of
Clause 7 of the impugned order wherein the Regulatory Authority directed
respondent no. 2 that in case the complainants are not interested in taking
possession of the property, respondent no. 2 should refund the money
deposited by them, within 45 days after 31.10.2020, with interest at the rate
of MCLR+1% per annum, but the complainants who have earlier received
the Assured Monthly Return on their deposited amount that amount will be
adjusted in the delay interest which is to be paid by respondent no. 2.
Assured return was part of the package under which property was purchased
and paid extra money to avail that option. Thus, it cannot be adjusted
against delay penalty since there is no such clause in the sale agreement.

6.5 There is stay on registration of the project due to non-transfer of title in the
name of respondent no. 2. Due to this reason the offer of possession
becomes untenable forcing appellant to withdraw from the project as
provided in the impugned order of the Regulatory Authority.
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6.6 Respondent no. 2 has paid commitment charges (assured return) only upto
December 2018. Respondent no. 2 claims that it has given offer of
possession on 14.01.2019. However, as per own submission of respondent
no. 2, it obtained part Occupancy Certificate/Completion Certificate in April
2019. Apart from that the said Part Occupancy Certificate/Completion
Certificate was in the name of AVJ Towers, not in the name of respondent
no.2. The lease deed from GNIDA is still in the name of AVJ Towers
Private Limited, hence, part of judgment for occupation based on illegal part
occupancy certificate, became infructuous, untenable and bad in law.

7. Respondent no. 2, vide application dated 18.04.2022, has brought on record

(i) photo copy of fresh certificate of incorporation consequent upon change
of name of the Company issued by the Registrar of Companies on
27.09.2012, (ii) photo copy of Builder Buyer Agreement dated 08.03.2013,
and (iii) photo copy of addendum dated 08.03.2013 to the Builder Buyer
Agreement dated 08.03.2013.

8. The Registrar of Companies, National Capital Territory of Delhi and

Haryana issued the following certificate on 27.09.2012:--

“GOVERNMENT OF INDIA-MINISTRRY OF CORPORATE AFFAIRS

Registrar of Companies, National Capital Territory of Delhi & Haryana.
Fresh Certificate of Incorporation consequent upon Change of Name
Corporation Identity Number:U70100DL2011PTC217186

In the matter of M/s AVJ TOWER PRIVATE LIMITED.

I hereby certify that AVJ TOWER PRIVATE LIMITED which was

originally incorporated on Sixth day of April Two Thousand Eleven
under the Companies Act, 1956 (No.1 of 1956) as AVJ TOWER
PRIVATE LIMITED having duly passed the necessary resolution in terms
of Section 21 of the Companies Act, 1956 and the approval of the Central
Government signified in writing having been accorded thereto under
Section 21 of the Companies Act, 1956 read with Government of India,
Department of Company Affairs, New Delhi, Notification No. G.S.R.507
(E) dated 24/06/1985 vide SRN B58287632 dated 27/09/2012 the name of
the said company is this day changed to OMAXE INDIA TRADE
CENTRE PRIVATE LIMITED and this Certificate is issued pursuant to
Section 23(1) of the said Act.

Given at Delhi this Twenty Seventh day of September Two Thousand

Twelve.
Registrar of Companies,
National Capital Territory of Delhi & Haryana.”
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9. Respondent no. 2, vide application dated 12.05.2022, has also brought on

record (i) true copy of order dated 12.04.2022 passed by the Greater Noida
Industrial Development Authority cancelling the allotment of the land which
was earlier allotted in favour of respondent no. 2 whereupon the project in
question exists, and (ii) copy of representation dated 27.04.2022 to the
Principal Secretary, Industrial Development, Sector-3, Government of U.P.,
Lucknow for quashing the order dated 12.04.2022 passed by the Greater
Noida Industrial Development Authority, which is pending disposal.

10. Heard Sri Siddharth Nandwani, learned counsel for the appellants and Sri V.
K. S. Bisen, learned counsel for the respondent.

11. Before we proceed to examine the issues pressed in the instant appeal, we
deem it proper to extract the relevant provisions of the Allotment Letter
dated 08.03.2013 and Addendum to Allotment Letter dated 08.03.2013,
which are as under:--

ALLOTMENT LETTER FOR COMMERCIAL SPACE/SHOP IN

“INDIA TRADE CENTRE, GREATER NOIDA”
Dated 08/03/2013
MR. ARVIND K GAUTAM Add:-T2-SF, ELDECO RESIDENCY
GREENS SEC- PI, GREATER NOIDA

DR . RENU GAUTAM Add: - T2 - SF, ELDECO RESIDENCY

GREENS , SEC-PI, GREATER NOIDA

Sub: Allotment Letter for Shop/Office Space/Premier Suites/Platinum

Floors /Food Court in the Commercial Project named as "India
Trade Centre, Greater Noida”

Dear Sir/Madam,

This has reference to your application submitted to M/s. Omaxe

India Trade Centre Pvt. Ltd. having its Office at 10, Local
Shopping Centre, Kalkaji, New Delhi- 110 019 (hereinafter
referred to as the "Company") for allotment of Shop/Office
Space/Premier Suites/Platinum Floors/Food Court Space in the
Commercial Project known as "INDIA TRADE CENTRE,
GREATER NOIDA" (hereinafter referred to as said "Project")
proposed to be developed on Plot of Land bearing No. C-1,
admeasuring 11584 sq. mts. situated at Sector Alpha-ll, Greater
Noida, Gautam Budh Nagar, U.P. (hereinafter referred to as the
said "Land") allotted to the Company by Greater Noida
Industrial Development Authority (GNIDA) vide Lease Deed
 16

dated 06.09.2011 (hereinafter referred to as the "said Lease

Deed") duly registered with the Sub Registrar, Gautam Budh
Nagar in Book No.1, Volume No. 9317, Page No.145-182 as
Document No.17033 dated 07.09.2011 on leasehold basis for a
period of 90 years commencing from the date of execution of the
said Lease Dead.

In response to your application, the Company hereby

provisionally allots to you (hereinafter “you” shall be referred to
as the “Allottee(s)”) a Shop/Office Space/Premier
Suites/Platinum Floors/Food Court Space more particularly
described in Annexure-A annexed hereto (hereinafter referred to
as “said Unit”) in the said Project. The allotment is subject to
the terms and conditions contained herein below:--

6. The Allottee(s) agrees that he shall pay the price of the said Unit
and other charges calculated on the basis of super area which
shall mean the covered area of the said Unit including the entire
area enclosed by its periphery walls including area under walls,
columns, balconies and lofts etc. and half the area of common
walls with other premises/Units which form integral part of said
Unit and Common areas shall mean all such parts/areas in the
entire said Project which the Allottee(s) shall use by sharing with
other occupants of the said Project Including entrance lobby,
electrical shafts, fire shafts, plumbing shafts and service ledges
on all floors, common corridors and passages, staircases,
mumties, services areas including but not limited to machine
room, security/fire control rooms maintenance offices/stores etc.,
if provided.

8. The Allottee(s) confirms that the company has given all options
of payment of total sale consideration of the said Unit and the
Allotee(s) out of all the offered payment plans has opted for the
payment plan annexed with this Allotment Letter in Annexure-B
on his own free will and consent and without any pressure or
false representation by the Company after understanding effect of
each payment plan and his/her financial limitations regarding
payment of installment.

9. The Allottee(s) hereby agrees to pay to the Company in timely

manner the Basic Sale Price, Additional Cost, Preferential
location charges, and other charges etc. as per the payment plan
opted by the Allottee(s) in Annexure - B, which is the essence of
this allotment. In addition to the above, the Allottee(s)
specifically agrees to pay promptly to the Company, the
applicable Service Tax, Cess etc. levied/to be levied by the
Government on services undertaken/to be undertaken by the
Company while constructing or developing the said Unit/Project.
 17

The Allottee(s) further agrees to pay directly or if paid by the

Company then reimburse to the Company on demand any Govt.
levies, Property Taxes, other charges etc. leviable in future on
the said Land and/or Project developed/constructed on the said
Land or the said Unit, as the case may be, as
assessable/applicable in respect of the said Unit to the Allottee(s)
and the same shall be borne and paid by the Allottee(s) in
proportion to the area of the said Unit to the area of all the Units
in the said Project as determined by the Company. If such
charges/cost are increased (including with retrospective effect)
after the sale/conveyance deed has been executed then such
charges/cost shall be treated as unpaid sale price of the said Unit
and the Company shall have the first charge/lien on the said Unit
for recovery of such charges/cost from the Allottee (s).

10. The Allottee(s) agrees and understands that in case the Company
is able to get additional FAR, the Company shall have the sole
right to utilize the additional FAR in the manner it may deem fit
including but not limited to by making addition to the said
Building or making additional buildings in and around the land
of the said Building in said Project and the Company shall be
entitled to get the electric, water, sanitary and drainage systems
of the additional construction thereof connected with the already
existing electric, water, sanitary and drainage system of the said
Building in the said Project. The Allottee(s) acknowledges that
the Allottee(s) has not made any payment towards the additional
FAR and shall have no right to object to any of such construction
activities carried on the said Building in the said Project.

14. It is understood and agreed by the Allottee(s) that the super area
given in this Agreement is tentative and subject to change upon
approval of final building plan(s) and/or on completion of
construction of the Project. The final size, location, number,
boundaries etc. shall be confirmed on completion of the Project.
In case of increase in the Floor area/Built-up area of the said
Unit, the Allottee(s) shall pay for the initial 10% of increase in
area at the rate of Basic Sale Price of the Floor/Built-up space
mentioned in the Price List prevailing at the time of booking of
the said Unit irrespective of any discount offered in the same at
the time of booking of the said Unit and shall pay for balance
increased area at the then prevailing company's rate/market rate.
In case of decrease of the allotted area of the said Unit, the
amount received in excess over and above the total cost of the
said Unit based on the changed area, shall be refunded/adjusted
(as the case may be) by the Company to the Allottee(s).

15. In addition to Clause (14) of this Allotment Letter, it has been

clarified by the Company and the Allottee(s) hereby re-affirms
 18

that at the time of the Application Form and Allotment Letter, the
Super Area of the said Unit is based on permissible F.A.R/F.S.I
and its maximum utilization by the Company. If the Company
opts to use F.A.R/F.S.I less than the permissible F.A.R/F.S.I then
the super area of the said Unit shall automatically
increase/decrease proportionate to the super area of the said
Unit as mentioned in this Allotment Letter. If the super area of
the said Unit is increased/decreased then the amount towards the
increased/decreased area shall be paid/adjusted in manner
detailed in the Clause (14) of this Agreement.

39 (a) The Company shall complete the development/construction of

the Unit/Project within 36 (thirty six) months from the date of
signing of this Allotment Letter by the Allottee(s), or within an
extended period of six months. Completion of development of the
Unit within such 42 (forty two) months is subject to force
majeure conditions [as mentioned in Clause (b) hereunder] and
subject to other Unit Allottee(s) making timely payment or
subject to any other reasons beyond the control of the Company.
No claim by way of damages/compensation shall lie against the
Company in case of delay in handing over the possession on
account of any of the aforesaid reasons and the Company shall
be entitled to a reasonable extension of time for the delivery of
possession of the said Unit to the Allottee(s). The aforesaid
period of development shall be computed by excluding Sundays,
Bank Holidays, enforced Govt. holidays and the days of cessation
of work at site in compliance of order of any judicial/concerned
State Legislative Body.”

ADDENDUM TO ALLOTMENT LETTER

“Dated 08/03/2013

To,
MR. ARVIND K. GAUTAM & DR. RENU GAUTAM
R/o T2-SF, ELDECO RESIDENCY GREENS, SEC-PI,
GREATER NOIDA.
The Allottees.
Sub: Addendum to Allotment Letter dated 08/03/2013.

Ref: Allotment of Commercial Shop/Office Space, Premier Suites/

Platinum Floors/Food Court Space (said Unit) admeasuring
1326.66 square feet ("Unit") bearing No. ITC/SECOND
SHOP/A-18 in the Commercial Complex known as "INDIA
TRADE CENTRE, GREATER NOIDA.

Dear Sir/Madam,

It is agreed between the Company and Allottee that:

 19

(a) Upon receipt/ realization of a sum of Rs.4182295.09 (Rupees

Forty One Lac Eighty Two Thousand Two Hundred Ninety Five
& Paise Nine Only) as an advance against part/full sale
consideration of the Unit in terms of Annexure B of the Allotment
Letter (“Initial Advance") from the Allottee(s) on dated 28 Jan
2013 ( hereinafter referred to as the "Payment Date”), the
Company shall pay the Allottee(s) a sum of Rs.44410/- ( Rupees
Forty Four Thousand Four Hundred Ten only) (less applicable
TDS), per month on realized BSP as Commitment Charges
against the said Initial Advance (“Initial Commitment Charges”)
during the Commitment Charges Period.

(b) …………….

(c). The Company shall also pay commitment charges against the
Tranche Installment to the Allottee(s) in the manner as provided
in Annexure B to the Allotment Letter against each Tranche
installment (“Tranche installment Commitment Charges”) from
the month following the date of realization of such Tranche
Installment by the Company The Tranche Installment
Commitment Charges and initial Commitment Charges shall
collectively be referred to as "Commitment Charges”.

(d) The Allottee(s) and the Company agree that the Company
shall pay the Commitment Charges on the Advance to the
Allottee(s), during the period commencing from the date of
realization of payment of initial Advance and Tranche
Installments, in the manner as provided above till offer of
Possession of the Unit to the Allottee(s) as mentioned in the said
Allotment Letter ("Commitment Charges Period”). The payment
of Commitment Charges shall be subject to following precedent,
terms and conditions:

4. That the obligations of the Company under the preceding and

subsequent clauses of this Addendum shall be subject to the
condition that whenever the Company is required to perform or
do any act or thing then in such instance, performance of such
act or thing shall not be required if the payment towards the said
Unit are not promptly and regularly paid, and/or if it is rendered
impossible or impracticable by reason of any riot, civil
commotion, labour unrest, go-slow, strike, lock out, non-
performance by Vendors/agencies, Act of God or the public
enemy, priority allocation, rationing or the prohibition of use of
any material/fuel or the regulation of course of work or by
reason of any matter or thing beyond the practical control of the
Company and the Company shall not be held responsible to pay
said return during the continuance/existence of the aforesaid
Force majeure unavoidable circumstances.
 20

5. That this Addendum shall form part and parcel of the said
Allotment Letter and shall alter the terms of said Allotment Letter
only to the extent mentioned herein. The covenants and
stipulators contained herein shall be read in conjunction to and
not in derogation to the terms and conditions of the said
Allotment Letter.

6. That it is agreed between the parties that all other terms of the
said Allotment Letter shall remain unaltered and shall continue
to be binding on the parties hereto.”

12 On examination of the pleadings and the record available in the instant

appeal, the admitted facts are that:

12.1 Respondent no. 2 is a Company registered under the Companies Act 1956
and is engaged in the business of real estate and development of projects in
the name and style “Omaxe India Trade Center Private Limited” situated at
Plot No. C-1, Sector Alpha-II, Greater Noida, district Gautam Budh Nagar,
admeasuring 11584 sq. meters. Respondent no. 2 is formerly known as
‘AVJ Tower Private Limited’. The appellant booked one unit bearing no.
ITC/First/Shop/A-18 at a total sale consideration of Rs.90,11,588/- vide
application form dated 27.10.2012 under flexi payment plan and in
pursuance of the same allotment letter was issued on 08.03.2013.

12.2 As per flexi payment plan opted by the appellants, they had to pay 10%
amount at the time of booking, 40% of basic sale price on 45th day + 50%
additional cost, 50% of basic sale price on 365th day of booking and lastly
50% of additional cost +100% of PLC (if any) + lease rent and other cost, if
any, on offer of possession.

12.3 On 08.03.2013 itself an addendum to allotment letter was signed/executed,

wherein it was agreed by the parties that commitment charges (assured
return) shall be paid @ Rs.44,410/- per month on realization of
Rs.41,82,295/- as per payment plan against the allotted unit comprising
super area of 1326.66 sq. ft. which was increased to Rs.86,234/-. Payment
of commitment charges (assured return) was started from 28.01.2013 and
continued upto December 2018.

12.4 As per clause 39(a) of the Allotment Letter dated 08.03.2013, possession
was to be handed over in 42 months from the date of signing of agreement
i.e. by September 2016, but the appellants signed an addendum dated
 21

08.03.2013 and opted for payment of commitment charges (assured return)

till offer of possession and accordingly respondent no. 2 has paid
commitment charges (assured return) till offer of possession i.e. 14.01.2019.

12.5 Respondent no. 2 paid commitment charges (assured return) to the

appellants upto December 2018 and offer of possession was sent on
14.01.2019.

12.6 Part Occupancy Certificate was received by respondent no. 2 on 15.04.2019

from the competent authority.

12.7 The appellants, being aggrieved on various issues as well as delay in

construction, reduction in the area of shop and non-payment of delay
penalty, filed the complaint before the Regulatory Authority seeking
possession as per RERA norms of covered area and resolution on delay in
delivery and short covered area; and exemption from common area
maintenance charges till execution of conveyance deed.

12.8 The complaint of the appellants along with four other similar complaints was
considered simultaneously and was disposed of by a composite order dated
27.07.2020 giving directions mentioned in para 1 of this judgment.

12.9 The appellants feeling aggrieved against the part of direction no. 7, wherein
the Regulatory Authority directed that in case the appellants are not
interested in taking possession of the unit, the promoter/respondent no. 2
shall refund the amount deposited by the complainants/appellants along with
interest at the rate of MCLR+1% per annum, within 45 days after
31.10.2020 after adjusting the amount of assured return earlier received by
the complainants/appellants.

13. On examining the pleadings, record and submissions of learned counsel for
the appellants and respondent no. 2 it comes out that the appellant and 4
other allottees of the project of respondent no. 2 approached the Regulatory
Authority by means of independent complaints raising various grievances.
All the five complaints were clubbed and disposed of by the Regulatory
Authority by means of a composite order dated 27.07.2020 with the
directions as mentioned in para 1 above.

14. The appellants of the instant appeal challenged only the part of direction no.
7 of the impugned order dated 27.07.2020 relating to their complaint no.
 22

NCR144/10/0186/2019 (Arvind Kumar Gautam and Renu Gautam Vs.

Omaxe India Trade Center Private Limited)x wherein the Regulatory
Authority directed respondent no. 2 herein to the effect that in case the
complainants (appellants herein) are not interested in taking possession of
the unit then respondent no. 2 will refund the amount deposited by the
complainants along with interest at the rate of MCLR+1% per annum, but
the allottees who have earlier received assured monthly return then the
amount received as assured monthly return will be adjusted in the delay
penalty, and sought further directions to withdraw from the project and
direct the respondent to pay entire amount of the appellants along with
interest at the rate of MCLR+1% without adjusting the amount of assured
monthly return already paid, since the same is neither linked to the delay
clause of BBA nor does it have any precedence to do so in law and the
assured return was a scheme separately sold by the respondent at a
substantial premium to other schemes and appellants paid ST/GST and 30%
IT on returns, which is non refundable.

15. Respondent no. 2, vide application dated 12.05.2022, has brought on record
a copy of order dated 12.04.2022 passed by Greater Noida Industrial
Development Authority cancelling the allotment of land which was earlier
allotted in favour of respondent no. 2 whereupon the project in question
exists. Respondent no. 2 has also brought on record copy of representation
dated 27.04.2022 to the Principal Secretary Industrial Development,
Government of U.P. under Section 41(3) of the U.P. Urban Planning and
Development Act 1973 read with Section 12 of the U.P. Industrial Area
Development Act 1976, challenging the order dated 12.04.2022 of Greater
Noida Industrial Development Authority, which is still pending disposal at
the level of the Government.

16. In view of challenge to the second part of direction no. 7 of the impugned
order, which is relating to adjustment of assured return received by the
appellants while returning the entire deposited amount by the
complainants/appellants along with interest at the rate of MCLR+1%, we
deem it proper to frame the following issue:--

Whether under the Scheme of Act 2016 there is a provision for

examining and deciding the issues relating to the provisions of
 23

assured return/committed charges or payment of Pre-EMI by

promoter for a fixed period or till possession etc. or commercial
effect in an allotment letter/builder buyer agreement for purchase of
flat/apartment/plot?

17. In order to examine the said issue, we proceed to examine the aims and
objects and the obligations and compliances required to be made by the
promoters/developers.

17.1 The real estate sector plays a catalytic role in fulfilling the need and demand
for housing and infrastructure in the country. While this sector has grown
significantly in recent years, it has been largely unregulated, with absence of
professionalism and standardization and lack of adequate consumer
protection. Though the Consumer Protection Act, 1986 is available as a
forum to the buyers in the real estate market, the recourse is only curative
and is not adequate to address all the concerns of buyers and promoters in
that sector. The lack of standardization has been a constraint to the healthy
and orderly growth of industry. Therefore, the need for regulating the sector
has been emphasized in various forums.

17.2 The Real Estate (Regulation and Development) Act, 2016 aims to create a
real estate regulatory authority and an appellate tribunal that will act as a
watchdog for the housing sector, primarily towards protecting consumer
interests while creating an alternative redress mechanism for an disputes that
may arise. This Act also aims to provide a uniform regulatory environment
in the real estate sector which is laced with black money, red-tapism, land
mafias and corruption. The core objective of this Act is twofold: firstly, to
ensure sales of immovable properties in an efficient and transparent manner
and secondly, to protect the interest of consumers in the real estate sector.

17.3 The Act is further intended to achieve:-

(a) To ensure accountability towards allottees and protect their interest;

(b) To infuse transparency, ensure fair-lay and deduce frauds & delays;

(c) To introduce professionalism and pan India standardization;

(d) To establish symmetry of information between the promoter and

allottee’

(e) To impose certain responsibilities on both promoter and allottees;

 24

(f) To establish regulatory oversight mechanism to enforce contracts;

(g) To establish fast-track dispute resolution mechanism;

(h) To promote good governance in the sector which in turn would create
investor confidence;

(i) Regulation of the planned development in the real estate sector;

(j) To ensure sale of immovable properties in an efficient and transparent

manner;

(k) To protect the interest of consumers in the real estate sector;

17.4 The promoter/developers are also required to make various compliances:

i. No launch or advertisement before registration with RERA;

ii. Sharing information project plan, layout government approvals, land

title status, sub-contractors;

iii. Increased assertion on the timely completion of projects and delivery

to the consumer;

iv. An increase in the quality of construction due to a defeat liability

period of five years;

v. Informing allottees about any minor addition or alteration;

vi. Consent of 2/3rd allottees about any other addition or alteration;

vii. Consent of 2/3rd allottees for transferring majority rights to 3rd party;

viii. Formation of RWA within specified time or three months after

majority of units have been sold.

17.5 The promoter of a real estate development firm has also to maintain a
separate account for each of their projects. A minimum 70 per cent of the
money from investors and buyers will have to be deposited. This money can
only be used for the construction of the project and the cost borne towards
the land. The developers will have to keep informed the buyers of their other
ongoing projects.

17.6 RERA requires builders to submit the original approved plans for their
ongoing projects and the alterations that they made later. Builders also have
to furnish details of revenue collected from allottees, how the funds were
utilized, timeline for construction, completion, and delivery that will need to
be certified by an engineer/architect/practicing chartered accountant.
 25

17.7 It is responsibility of each state regulator to register real estate projects and
real estate agents operating in their state under RERA. The details of all
registered projects will be put up on a website for public access.

17.8 Further the regulator will have to ensure protection to buyers in this matter
for five years from the date of possession. If any issue is highlighted by
buyers in front of the regulator in this period including in quality of
construction and the provision of services, the developer will have to rectify
the same within 30 days.

17.9 Developers can’t invite, advertise, sell, offer, market or book any plot,
apartment, house, building, investment in projects, without first registering it
with the regulatory authority. Furthermore, after registration, all the
advertisement inviting investment will have to bear the unique RERA
registration number. The registration number will be provided project-wise.
After registering the project, developers will have to furnish details of their
financial statements, legal title deed and supporting documents.

17.10 If the promoter defaults on delivery within the agreed deadline, they will be
required to return the entire money invested by the buyers along with the
pre-agreed interest rate mentioned in the contract based on the model
contract agreement given by RERA.

17.11 If the buyer chooses not to take the money back, the builder will have to pay
monthly interest on each month delay to the buyer till they get delivery.
After developers register with the regulator, a page will be created for the
builder on the regulatory authority’s website. The developer will be given
login credentials using which it will upload all the information regarding the
registered projects on the regulator’s website. The number, type of
apartments, plots and projects and their completion status will be updated at
a maximum quarterly basis.

17.12 To add further security to buyers, RERA mandates that developers can’t ask
more than 10 per cent of the property’s cost as an advanced payment or
booking amount before actually signing a registered sale agreement.

17.13 The regulator will have the power to impose penalty and courts can fine and
imprison errant builders. The imprisonment can go up to a period of three
years in case of certain matter.
 26

17.14 Section 2(c) of the Act 2016 defines “agreement to sale” means an
agreement entered into between the promoter and the allottee and Section 13
refrains the promoter from accepting a sum more than 10% of the cost of the
apartment, plot, or building as the case may be, as an advance payment or an
application fee, from a person without first entering into a written agreement
for sale specifically providing therein the particulars of the development of
project including the construction of building and apartments, along with
specifications and internal development works and external development
works, the dates and the manner by which payments towards the cost of the
apartment, plot or building, as the case may be, are to be made by the
allottees and the date on which the possession of the apartment, plot, or
building is to be handed over, the rates of interest payable by the promoter to
the allottee and the allottee to the promoter in case of default, and such other
particulars, as may be prescribed.

17.15 Section 18 of the Act 2016 gives right to the allottee to seek refund of the
amount and compensation if the promoter fails to complete or is unable to
give possession of the apartment, plot or building in accordance with the
terms of agreement for sale duly completed by the date specified therein.

17.16 Section 19(4) of the Act 2016 provides for entitlement of an allottee to claim
refund of amount along with interest at such rate as may be prescribed and
compensation in the manner as provided under the Act 2016 from the
promoter, if promoter fails to comply or unable to give possession of the
apartment, plot or building, as the case may be in accordance with the terms
of agreement for sale. Sub Section (6) of Section 19 further provides that
every allottee to make necessary payment in the manner within the time as
specified in the agreement for sale.

17.17 Section 31 of the Act empowers any aggrieved person to file a complaint
with the Authority for the Adjudicating Officer, as the case may be, for
violation or contravention of the provisions of the Act 2016 and Rules and
Regulations made thereunder against any promoter allottee or real estate
agent, as the case may be.

17.18 The State Government in exercise of powers conferred by sub section (1) of
Section 84 read with clause (h) of sub section (2) of the said Section and
sub-section (2) of Section 13 of the Act 2016 framed The Uttar Pradesh Real
 27

Estate (Regulation and Development) (Agreement for Sale/Lease) Rules,

2018 (hereinafter referred to as ‘Rules 2018’). Chapter-II of Rules 2018
provides for ‘agreement for sale/lease’ to be executed between the promoter
and an allottee in the form as per Annexure and under the heading of
‘Terms’ as per clause 1.5, a promoter has been given sole discretion to give
a rebate for early payments of instalments payable by the allottee by
discounting such early payments @ …….. % per annum for the period by
which the respective installment has been preponed and the provision for
allowing rebate and such rate of rebate shall not be subject to
revision/withdrawal, once granted to an allottee by the Promoter.

17.19 Rules further provide the mode of payment, compliance of law relating to
remittance, adjustment or appropriation of payments.

17.20 Under the heading ‘Time is the Essence’ it has been specifically provided
that the promoter shall abide by the time schedule for completing the Project
as disclosed at the time of registration of the Project with the Authority and
towards handing over the (Apartment/Plot) to the Allottee. Similarly,
Allottee was also required to make payment of the installment and other
dues and to meet the other obligations under the Agreement subject to the
simultaneous completion of construction by the Promoter as provided in the
payment plan.

17.21 Rules also provide for construction of the Project/Apartment, possession of

the Apartment/Plot, Representations and Warranties of the promoter,
conveyance of the apartment, maintenance of the building/
apartment/project, defect liability, right to enter the apartment for repairs,
usage, general compliance with respect to the apartment, compliance of
laws, notifications etc by parties, additional constructions, promoter shall not
mortgage or create a charge etc.

17.22 Clause 25 of the ‘Terms’ provides severability to the effect that “If any
provision of this Agreement shall be determined to be void or unenforceable
under the Act or the Rules and Regulations made there under or under other
Applicable Laws, such provisions of the Agreement shall be deemed
amended or deleted in so far as reasonably inconsistent with the purpose of
this Agreement and to the extent necessary to conform to Act or the Rules
and Regulations made there under or the Applicable Laws, as the case may
 28

be, and the remaining provisions of this Agreement shall remain valid and
enforceable as applicable at the time of execution of this agreement.”
17.23 From the examination of the provisions of entire scheme of Act 2016 and the
Rules 2018, it is evident that the agreement for sale is required to be entered
into between the promoter and allottee and they are under obligation to
perform their duties/obligations as per the provisions of the Act 2016 and
Rules 2018. The entire Act does not talk about securing loan by an allottee
through any financial institution and/or for facilitating the loan, execution of
tripartite agreement by allottee, promoter as well as financial institution and
entering into memorandum of understanding with respect to no pre-EMIs till
possession etc. or any assured return or committed charges.

17.24 In our considered view, the assured return or committed charges are
independent commercial arrangements between the parties which sometime
a promoter/developer offer, in order to attract buyers/investors or users who
may invest either in under construction or pre-launched/new launched
projects. The commercial effect would generally involve transactions
having profit as their main aim. Piecing the threads together, therefore, so
long as an amount is ‘raised’ under a real estate agreement, which is done
with profit as the main aim, such agreement between the developer and
home buyer would have the “commercial effect” as both the parties have
“commercial” interest in the same- The real estate developer seeking to
make a profit on the sale of the apartment, and the flat/apartment purchaser
profiting by the sale of the apartment. Whereas the object of promulgation of
the Real of Real Estate (Regulation and Development) Act 2016 aims to
create and ensure sale of immovable property in efficient and transparent
manner and to protect the interest of the consumers in the real estate sector
and not to use the forum for profit purposes/unjust enrichment.

17.25 On the basis of the above, we are of the considered view that there is no
provision under the Scheme of Act 2016 for examining and deciding the
issues relating to the provisions of assured return/committed charges or
payment of Pre-EMI by promoter for a fixed period or till possession etc. or
commercial effect in an allotment letter/builder buyer agreement for
purchase of flat/apartment/plot. The said issue is answered accordingly.
 29

18. In sum and substance the submission of learned counsel for the appellants is
that there is no binding clause or reference in the Seller Buyer Agreement to
the effect that the complainants/allottees will get one financial benefit, in
other words in between the assured monthly return and interest on delay one
benefit will be given whereas the allottee has purchased the property in
question at 22% higher premium compared to other schemes of the same
property and also paid 100% cost upfront. The assured return like Ponzi
Scheme (now banned by RBI) is return on investment and allottee has to pay
30% Income Tax on assured return every year apart from 12% ST/GST on
assured return, deducted by respondent no. 2 at source. Learned counsel
further emphasized that assured return is related to upfront payment of
capital to the builder and builder utilized the same at will to his business
avoiding high interest based borrowing from bank.

19. Respondent no. 2 brought on record, vide application dated 12.05.2022 an

order dated 12.04.2022 passed by Greater Noida Industrial Development
Authority cancelling the allotment of the land whereupon the project in
question exists and its representation dated 27.04.2022 against the order of
Greater Noida Industrial Development Authority dated 12.04.2022 is
pending before the State Government. Thus, the respondent is not in a
position to offer possession to either of the allottees. The Regulatory
Authority while passing the composite order dated 27.07.2020 on 5
complaints of different allottees in fact directed respondent no. 2 to refund
the deposited amount along with interest at the rate of MCLR+1% within 45
days after 31.10.2020 if the complainants/allottees are not interested in
taking the unit. If the appellants wish to seek refund, in pursuance to the
said direction, they are entitled for refund at the rate of MCLR+1% after
31.10.2020.

20. On the basis of answer to the aforesaid issue, framed by us, we are of the
considered view that the direction of the Regulatory Authority in second part
of direction no. 7 with respect to adjustment of the amount received by the
allottees as assured return, is not sustainable.

21. The claim of compensation does not fall within the domain and jurisdiction
of the Regulatory Authority and it is open for the appellants to approach the
 30

Adjudicating Officer of the Regulatory Authority in accordance with law, if

they want compensation.

22. In view of the aforesaid analysis, the appeal is partly allowed. The second
part of direction no. 7 i.e. “ijUrq foi{kh }kjk f”kdk;rdrkZx.k dks iwoZ esa vnk dh
x;h ,”;ksMZ fjVuZ dh /kujkf”k dks tek /kujkf”k C;kt lfgr okil fd;s tkus ds nkSjku
lek;ksftr dj “ks’k /kujkf”k okil ykSVk;h tk,A” is hereby set aside.

23. No order as to costs.

(K. K. Jain) (D. K. Arora)

Dated: May 29, 2023.

Shakir