Moot and Practical Training Sanchit Singla

Roll No. 200/16

Section-D
Before the Hon’ble Real Estate Regulatory Authority at Cambala at Satya Pradesh

In the matter of
Case No. ________ of 2020

PLX …Complainant

Vs.

Ramesh Mathur …Respondent

The case concerning about the refunding of payment plus interest paid for the purchase of flat and allow the allottee to
withdraw from the project.

Written Submissions on behalf of Complainant

 STATEMENT OF JURISDICTION

The Complainant has approached this Hon’ble Authority exercising its jurisdiction under Section 31, The Real Estate
(Regulation And Development) Act, 2016 by filing a complaint.
Section 31, The Real Estate (Regulation And Development) Act, 2016 reads as follows:
“31. Filing of complaints with the Authority or the adjudicating officer.—(1) Any aggrieved person may file a complaint with the Authority or
the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made
thereunder, against any promoter, allottee or real estate agent, as the case may be.
Explanation.—For the purpose of this sub-section “person” shall include the association of allottees or any voluntary consumer association
registered under any law for the time being in force.
(2) The form, manner and fees for filing complaint under sub-section (1) shall be such as may be 1[prescribed].”
 STATEMENT OF FACTS

1. PLX, a construction company made a agreement to sell the flats and independent house with the buyers including Ramesh
Mathur.
2. According to agreement, the price for flat houses was to be paid in instalment i.e 15% as down payment , 50% within 3
months of booking and rest 35% was to be paid at the time of possession. Moreover, as per clause 15(f) of the same, in
case of delay in handling over the possession of the flat, the PLX will pay Rs. 7/- per sqft on build up area for maximum
period of 12 months.
3. Ramesh Mathur purchased a flat for Rs. 222222.22 and paid Rs. 333333.33 as down payment on 06-12-2011 and Rs. 25
lakhs on 10-06-2012. He takes loan of Rs. 50 lakhs @12% p.a. for the purchasing of flat.
4. After lapse of three years on 06-12-2014, the construction did not completed and possession of the flat was not delivered.
5. On 15-02-2020 Ramesh Mathur filled a complaint demanding the refund of the whole payment made by him to PLX plus
interest @ 12%.
 ISSUES RAISED

I. Whether complaint under Section 31, The Real Estate (Regulation And Development) Act, 2016 is
maintainable or not ?
II. Whether the PLX is liable to pay refund of the whole payment with 12% interest or not ?
 Arguments Advanced

Most Respectfully Showeth

I. Whether the provisions of the Act and the rules made thereunder shall be applicable to the pre RERA agreement or not ?
It is most humbly submitted that the complaint filed by the Petitioner is maintainable because [1.1] That the Act is retroactive in nature. [1.2]
That all beneficial legislation will enforced retrospective. [1.3] That the act provision impliedly supports retrospective nature of act.
[1.1] That The Act Is Retroactive In Nature.
1. The question regarding applicability of the Act and the Rules made thereunder to the pre-RERA agreements was also taken note of by the
Hon’ble Bombay High Court in Neel Kamal Realtors Suburban Pvt. Ltd. & anr. Vs. Union of India and others {2018(1) RCR (Civil)
298 (DB)}. As per the case law, ratio of law the provisions of the Act are retroactive or quasi retroactive to some extent. The second
concept of quasi-retroactivity occurs when a new rule of law is applied to an act or transaction in the process of completion. Thus, the rule
of quasi retroactivity will make the provisions of the Act or the Rules applicable to the acts or transactions, which were in the process of
the completion though the contract/agreement might have taken place before the Act and the Rules became applicable.
2. In the case in hand also though the agreement for sale between the parties was executed prior to the Act came into force but the
transactions was still in the process of completion when the Act became applicable. It is evident from the facts that even on the date of
filing of the complaint the possession of the unit was not delivered to the petitioner and conveyance deed was yet to be executed. Thus,
the concept of quasi-retroactivity will make the provisions of the Act and the Rules applicable to the agreement for sale entered into
between the parties.
[1.2] That Beneficial Legislation Will Enforced Retrospective.

3. As per preamble the enactment of the Act was required to establish the Real Estate Regulatory Authority for regulation and promotion of the real
estate sector and to ensure sale of plot, apartment or building or the sale of the real estate project in an efficient and transparent manner and to
protect the interest of the consumers in the real estate sector and to establish an adjudicating mechanism for the speedy dispute redressal between
the promoters/developers and the home buyers. The basic purpose for enactment of the Act was to provide the special platform to the consumers
for redressal of their grievances against the defaults and malpractices of the promoters/builders. It was felt that several promoters had defaulted and
the consumers who had spent their hard earned money had no specialized forum to approach to get the speedy remedy. Thus, in a way the Act is a
beneficial legislation to the consumers but at the same time it also provides certain remedies to the promoters for the recovery of the dues and
other matters.

4. In a recent case titled as M/s Shanti Conductors (P) Ltd. Vs. Assam State Electricity Board {2019(1) Scale 747} The Hon’ble Apex Court in
the aforesaid judgment has observed that the Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertakings Act, 1993 being
beneficial legislation enacted to protect small scale industries and statutorily ensure by mandatory provisions for payment of interest on the
outstanding money, accepting the interpretation as put by learned counsel for the Board, that the day of agreement has to be subsequent to the
enforcement of the Act, the entire beneficial protection of the Act shall be defeated. The aforesaid ratio of law laid down by the Hon’ble Apex
Court will be squarely applicable to the case in hand.
[1.3] That Various Act Provisions And Judgments Supports Retrospective Nature Of Act.
5. Agreement for sale has been defined in Section 2 clause (c) as under :- “agreement for sale” means an agreement entered
into between the promoter and the allottee;” As per the above definition agreement for sale means an agreement entered into
between the promoter and allottee. This definition does not exclude the agreements entered into between the promoter and the
allottee prior to the Act came into force. The definition of the agreement for sale as mentioned above will cover both the pre-
RERA as well as the post-RERA agreements. The claim of the appellant is based on the remedies provided under section 18
of the Act. Section 18(1)(a) also mentions “the agreement for sale”.
6. Moreover, Haryana Real Estate Appellate Tribunal held in case Magic Eye Developers Pvt. Ltd vs. Rajneesh Arora
{Appeal No.208 of 2019} that e provisions of the Act are quasi retroactive to some extent in operation and will be applicable
to the agreements for sale entered into even prior to coming into operation of the Act where the transaction are still in the
process of completion.
7. Also, Bombay High Court held in the case of Neelkamal’s case (supra) that stated provisions of the RERA may to some
extent be having a retroactive or quasi retroactive effect but then on that ground the validity of the provisions of RERA cannot
be challenged. The Parliament is competent enough to legislate law having retrospective or retroactive effect. A law can be
even framed to affect subsisting/existing contractual rights between the parties in the larger public interest.
 II. Whether the PLX is liable to pay refund of the whole payment with 12% interest or not ?
It is most humbly submitted that the PLX is liable to pay refund of the whole made by Mathur plus interest being paid by him for the loan
undertaken by him @ 12% for the flat which was not there actually in his possession starting from 02-01-2012.
[2.1] That The Clause 15(f) Of The Agreement To Sale Is Unfair And Unreasonable.
8. The clause 15(f) i.e. Rs. 7/- per sqft. per month on the build up area for maximum period of 12 months, mentioned in the agreement is
unfair and unreasonable. The said clause of the agreement are one sided and are liable to be ignored. In the case Pioneer Urban Land &
Infrastructure Ltd. Vs. Govindan Raghavan and others {2019(2) RCR (Civil) 738} wherein the Hon’ble Apex Court has laid down as under:

“6.7 A term of a contract will not be final and binding if it is shown that the flat purchasers had no option but to
sign on the dotted line, on a contract framed by the builder. The contractual terms of the Agreement dated 08.05.2012 are ex-facie one-sided,
unfair, and unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair trade practice as per section 2(r)
of the Consumer Protection Act, 1986 since it adopts unfair methods or practices for the purpose of selling the flats by the Builder.”
9. Moreover, the function of the authority establish under the Act is to safeguard the interest of the aggrieved person may be allottee or the
promoter. The rights of the parties are to be balanced and must be equitable. The promoter cannot be allowed to take any undue advantage of
his dominant position and to exploit the needs of the home buyer. This Tribunal is duty bound to take into consideration the legislative intent
i.e. to protect the interest of consumers/allottee in real estate sector. As per clause 10(f) of the agreement in case of failure of the developer to
give the possession within the stipulated period the allottee was only entitled to receive the compensation at the rate of Rs.7 per square feet of
the build up area per month for the period of 1 year maximum. Thus, the aforesaid terms of the
agreement dated 06.12.2011 are ex-facie one sided, unfair and unreasonable, which constitute the unfair trade practice on the part of the
appellant/promoter. There is no denial to the fact that promoter was in dominant position; the allottee was in the need of the house and so
he had no option but to sign the agreement on the dotted lines. The discriminatory terms and conditions of such agreement will not be final
and binding.
10. It was further contended that as per agreed terms of agreement, the construction of the building was contemplated to be completed within
a period of three years from the date of execution of the agreement.But there is no justification to have grace periods of 12 months and to
further extend the period for completion of the construction by one year. Prescribing the grace period without any justification and sufficient
cause again shows the terms and conditions of the agreement to be unfair and unreasonable. Hence, the grace period of 1 year can only be
availed by the promoter, if there is any justification but in the instant case there was no reason for availing the grace period.
[2.2] That Allottee Entitled To Refund Of The Whole Payment Plus Interest @12% P.A.
11. As per Section 18(1)(a) and Section 19(4) of the RERA, once Promoter fails to give possession by the date mentioned in the agreement,
Allottee is entitled to either withdraw from the project and claim refund of entire amount along with interest and compensation or to continue
in project and claim interest for every month of delay till handing over of the possession. In the present matter, as no possession was not
delivered by due date, Allottee had opts the option of claiming refund of the entire amount along with interest from the Promoter.
12. As per Section 18(3), the allottee is entitled to compensation if the promoter fails to discharge any other obligations imposed on him in
accordance with the terms and conditions of the agreement for sale. As promoter is in default for giving possession in due time, a due
compensation shall be awarded to allottee. Moreover, while issuing order of compensation the authority must takes in view of Section 71 r/w
Section 72 of RERA Act, 2016.
13. As per section 72(b), the court considered the amount of loss caused as a result of default. The allottee had taken a home
loan for the payment of flat @ 12% p.a. and the authority must issue the amount of interest @ 2% as compensation from the
date of payment by allottee till the date of refund amount is paid. Moreover, promoter as decided in agreement failed to give
possession on time period due to which allotteee had to pay rent of Rs. 30000/per month for house, which can be saved if
possession would be given on time. Thus, allottee is claiming compensation in terms of the loss of rent which allottee might
have saved.

14. I would like to point out that their Lordhsips of Hon,ble Bombay High Court have laid down in Neelkamal Realtors case
(supra) law decided on 06.12.2017 lhat the payment of interest by promoter to the allottee on the amount received by the
promoter from the allottee, is by way of compensation and obligation is kept on promoter to pay such interest in order to
compensate the allottee in respect of the amount paid to the promoter for considerable period and used by the promoter. Thus,
awarding interest is awarding of the compensation as laid down in above mentioned case law by their Lordships of Hon,ble
Bombay High Court

[2.3] That Authority Has To Intiate Penal Action.

15. Allottee has also prayed for initiating penal action under Section 61 RERA Act against the promoter for committing breach
of his obligations under RERA Act, 2016. As per Section 80 of RERA Act, 2016 no court shall take cognizance of any offence
punishable under RERA Act, 2016 or the Rules and Regulations made there under save on a complaint in writing made by the
Authority or by any officer of the Authority duly authorized for that purpose. So RERA Authority is the competent authority and authorized to
initiate the action of filing complaint to the court for taking cognizance of the offence punishable under RERA Act, 2016 and made
liable to a penalty to five per cent. of the estimated cost of the real estate project as determined by the Authority

[2.4] That The Allottee As A Matter Of Right Can Withdraw From The Project.

16. After careful perusal of Section 18 and the intention of legislation in making such provisions it is seen that option is given to the
allottee to withdraw from the project if such project is not completed and possession of the flat is not handed over to the allottee as per
agreed date mentioned in an agreement for sale and to get the refund of total amount along with interest including compensation or to
continue with the project by claiming only interest on the delayed period of possession from the promoter clearly shows that such a right
to withdraw or to continue with the project is exclusively vested with the allottee.

17. In the case Dwijendra Mohan Ganga Prasad v. M/s. Housing Development and lnfrastructure Ltd. {APPEAL NO.O0610794}held

“it is exclusively within the power of allottee to exercise right either by withdrawing or
by continuing with the project and allottee is not required to seek the permission for such withdrawal from the RERA Authority
particularly in absence of such requirement of permission in the positive and specific provision under RERA Aci, 2016.”

18. Hence, allotee as a matter of right given in Section 18 of Act,2016 opts that he is withdrawing from the project and request a
authority to declare it valid.
 Prayer
Whereof in the light of facts of the instant case, written pleadings and authorities cited, it is humbly
prayed before this Hon’ble Authority that it may be pleased to hold, adjudge and declare:-

1. That complaint under Section 31, The Real Estate (Regulation And Development) Act, 2016 is
maintainable .

2. That the the PLX is liable to pay refund of the whole payment with 12% interest from the date of
payment made till the said amount is returned and permit the allottee to withdraw from the project.

AND/OR

Pass any other order, which the court may deem fit as may be admissible on the fats of this case
and/or in interest of Justice, Equity and Good Conscience.
ALL OF WHICH IS RESPECTFULLY SUBMITTED
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Sd/-