M/S PTC Builders v. Mariamma Stephan

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT`** ``` THE HONOURABLE MR. JUSTICE M.A.ABDUL HAKHIM ``` ``` FRIDAY, THE 26[TH] DAY OF JULY 2024 / 4TH SRAVANA, 1946 ``` ``` MSA NO. 17 OF 2024 ``` ``` AGAINST THE ORDER DATED 24.05.2024 IN REFA NO.36 OF 2023 OF KERALA REAL ESTATE APPELLATE TRIBUNAL, ERNAKULAM ARISING OUT OF THE ORDER DATED 20.02.2023 IN COMPLAINT NO.98 OF 2022 OF KERALA REAL ESTATE REGULATORY AUTHORITY, THIRUVANANTHAPURAM ``` ## **`APPELLANT(S)/APPELLANTS/RESPONDENTS:`** ``` 1M/S. PTC BUILDERS, REPRESENTED BY MANAGING PARTNER BIJU JACOB AGED 48 YEARS M/S. PTC BUILDERS, REGISTERED FIRM, OFFICE AT PTC TOWERS, S.S KOVIL ROAD, THAMPANOOR, THIRUVANTHAPURAM, PIN - 695001 ``` ``` 2MR. BIJU JACOB AGED 48 YEARS S/O LATE P.T CHACKO, MANAGING PARTNER, M/S P.T.C BUILDERS, A REGISTERED PARTNERSHIP FIRM, HAVING ITS OFFICE AT PTC TOWERS, S.S KOVIL ROAD, THAMPANOOR, THIRUVANATHAPURAM, PIN - 695001 ``` ``` BY ADVS. SIDHARTH A.MENON V.AJAKUMAR SANDRA MARIYA VINITHA S.T. ``` ``` MSA NO. 17 OF 2024 ``` ``` 2 ``` ## **`RESPONDENT/RESPONDENT/COMPLAINANT:`** ``` MARIAMMA STEPHAN AGED 50 YEARS MARIAMMA STEPHAN, P.O BOX NO. 2424, DUBAI, UAE AND NOW RESIDING AT HOUSE NO.481 D, ATTUPURATHU, PUTHAVILAYIL, RAINBOW GARDEN, UNICHIRA, THRIKKAKARA NORTH, CHENGAMPUZHA, ERNAKULAM, PIN - 682033 BY ADV ARUN CHANDY ``` ``` THIS MISC. SECOND APPEAL HAVING COME UP FOR ADMISSION ON 26.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` MSA NO. 17 OF 2024 ``` ``` 3 ``` ## JUDGMENT 1. The appellant is the respondent in complaint No.98/2022 before the Real Estate Regulatory Authority (RERA) filed by the respondent. The parties are referred according to their status before the Authority. 2. The complainant filed the complaint claiming refund of an amount of Rs.27,44,000/- with interest which was paid by him on the basis of Ext.A1 agreement dated 23/11/2013 by which the complainant agreed to purchase and the respondents agreed to sell a residential Apartment No.4F including car park on the basement/ground and 1.48 percent of undivided interest in the multi storied residential complex named “PTC WESTERN GHATS” to be constructed by the respondents for a consideration of Rs.49,00,000/-. As per the terms of Ext.A1 agreement, the apartment had to be completed before July 2015. A grace ``` MSA NO. 17 OF 2024 ``` ``` 4 ``` period of six months is also provided in Ext.A1 Agreement, which expired in January 2016. 3. According to the complainant, she had been making payments as per the payment schedule to the respondents till 12/08/2015. There after the installment amounts were not paid since she came to know that the respondents are not proceeding with the construction as per the time schedule provided in Ext.A1 agreement. 4. According to the complainant, the 1[st] respondent issued a Ext.A5 Legal Notice dated 04/05/2018 to the complainant demanding to pay the balance amount threatening to cancel the allotment. The said legal notice was followed by Ext.A6 letter dated 04/06/2018 by which the respondent intimated the complainant that her allotment is cancelled and that refund of the amount paid by the complainant after deducting the damages and cost incurred to the ``` MSA NO. 17 OF 2024 ``` ``` 5 ``` respondent owing to the willful latches and defaults on the part of the complainant and that the balance amount due after the said deductions without any interest will be paid after the resale of the Apartment No.4F in favour of new purchaser. 5. According to the complainant, she was fully justified in withholding the payments since the respondent had been delaying the construction of the building and the respondents did not even replied to Ext.A3 Emails sent by her requesting to inform the status of the construction to enable her to make the payments. 6. The respondent 1 and 2 opposed the prayers in the complaint on the ground that it is the complainant who has violated the obligations under Ext.A1 Agreement and as also provided under Section 9 of the Kerala Real Estate (Regulation and Development) Act. She did not make the ``` MSA NO. 17 OF 2024 ``` ``` 6 ``` payment in accordance with the Payment Schedule. They also contended that they are only builders of the apartment and it is for land owner to answer the claims of the allottees. According to them, there is no obligation on their part to complete the construction before July 2015 with a grace period of six months as claimed by the complainant. The time limit provided in the agreement is subject to payment by the allottee and it is also subject to the unforeseen circumstances such as natural calamities, court orders, prohibitory orders of the Government and other Authorities and under all circumstances where the builder is prevented from completing the project. It is stated in the written statement that the construction could not be progressed as expected as the soil of the land on excavation for construction of foundation was found to be rocky and about 19 months were taken to remove the ``` MSA NO. 17 OF 2024 ``` ``` 7 ``` same for construction of foundation. It is also stated that as there is a school nearby, only controlled blasting after school hours is permitted and there was substantial delay on the part of the Authorities to issue permits for blasting removal of the rocks. They also contented that they completed the construction in 27/07/2017 leaving only minor finishing works and the Pathanamthitta Municipality issued Occupancy Certificate on 30/07/2020. According to them though an option was given to the complainant to cancel the agreement as per Legal Notice dated 04/06/2018, the same was not availed by the complainant and hence without cancellation of the agreement, the complainant cannot claim refund of the amount paid by her. 7. The Authority ordered refund of the amount of Rs.27,44,000/- with simple interest at the rate of 16.15 % ``` MSA NO. 17 OF 2024 ``` ``` 8 ``` per annum on the payments made as the Payment Schedule from the date of each payment till the date of realization. 8. Though the respondents filed appeal before the Real Estate Appellate Tribunal, the same was dismissed confirming the order passed by the Authority. The Miscellaneous Second Appeal is filed against the order of the Tribunal. 9. I heard the learned counsel for the appellants and also the learned counsel for the respondent. 10. The learned counsel for the appellant argued that there was clear default on the part of the complainant who was the allottee of the project in making payment of the amount as per the payment schedule. The Agreement terms and S. 19 (6) of the RERA Act mandates timely payment by the allottee to the builder. Here admittedly the payments were ``` MSA NO. 17 OF 2024 ``` ``` 9 ``` not made in accordance with the Payment schedule. There was no cancellation from the side of the complainant to claim refund of the amount as required under Section 18 of the Act. He also pointed out that in one of the emails in Ext.A3, the complainant has expressed her inability to pay the balance amount. 11. On the other hand the learned counsel for the respondent submitted that admittedly the respondent did not complete the project within the time stipulated in Ext. A1 agreement. Ext.A5 would show that they have cancelled the allotment and they do not intend to give the apartment to the complainant. In such case, the only remedy of the complainant is to seek refund of the amount. Since the complainant is not in anyway responsible for the delay in completing the construction, the complainant is entitled to get full refund of the amount with interest ``` MSA NO. 17 OF 2024 ``` ``` 10 ``` thereon. 12. Admittedly, going by the pleadings from the part of the respondents, they could not complete the construction within the time stipulated in Ext.A1 agreement. It is admitted that the stipulated period for construction is July, 2015 with a grace period of six months which expired in January 2016. Of course it is stated in the agreement that it is subject to several unforeseen circumstances. The respondent have pleaded several unforeseen circumstances as the causes for the delay in completing the construction. But no material was produced before the authority justifying the delay for completing the construction. Even according to the version of the respondents, the 1[st] respondent could complete the construction only on 27/07/2017 that also leaving minor finishing works. ``` MSA NO. 17 OF 2024 ``` ``` 11 ``` 13. The Ext. B5 Occupancy Certificate would show that the construction was completed only on 30/07/2020. Since there was no material produced before the Authority for justifying the delay on the part of the respondent, I find that the respondents alone are responsible for the delay in completing the construction. 14. The contention of the learned counsel for the appellant that the complainant could not maintain the complaint without making the full payment of the amount as per the schedule. It is seen that the complainant has made payments upto 12/08/2015. Thereafter, she did not make further payments since she understood that there is delay in proceeding with the construction as per the time schedule. Though she sent Ext.A3 emails, none of them were replied by the respondents. So in those emails the complainant has specifically sought for the status of the ``` MSA NO. 17 OF 2024 ``` ``` 12 ``` project, but the respondents did not send any reply. Even in Ext.A5 Legal Notice dated 04/05/2018, the statement of the respondent is that the project is nearing completion, without reference to the actual status of the completion. In such circumstances a complainant is fully justified for holding further payments as per the payment schedule. This is not a case where the builder had been proceeding with the construction in accordance with the time schedule in Ext.A1 agreement and the complainant withheld the payments as per the payment schedule. This is not a case where the builder cancelled the allotment before the agreed date of completion on the ground of delay in making payments by the allottee. 15. With respect to the cancellation of allotment it is seen from Ext.A5 that the allotment is cancelled at the instance of the respondent and they do not intent to give ``` MSA NO. 17 OF 2024 ``` ``` 13 ``` possession of the apartment to the complainant. In such case, going by Section 18 of the RERA Act, the complainant is fully justified to claim the refund of the amount. There is no need for any further cancellation from the part of the complainant. 16. The learned counsel for the appellant relied on Paragraph 80 of the decision in New tech promoters and Developers Pvt. Ltd. v. State U.P. & Others [2021 SCC ONLINE SC 1044] and contented that if the allottee has defaulted payment of the amount as per the terms of the agreement, the allottee cannot claim refund of the amount paid by him. The said decision is clearly distinguishable on facts of the present case as the complainant herein had justification for withholding the payment on account of the delay on the part of the builder to complete the project. 17. In the very same decision in Paragraph No.25, the ``` MSA NO. 17 OF 2024 ``` ``` 14 ``` ## Hon'ble Supreme Court stated about the unqualified right of the allottee to seek for refund in the following words. The unqualified right of the allottee to seek refund referred under S.18(1)(a) and S.19(4) of the Act is not dependent on any contingencies or stipulations thereof. It appears that the legislature has consciously provided this right of refund on demand as an unconditional absolute right to the allottee, if the promoter fails to give possession of the apartment, plot or building within the time stipulated under the terms of the agreement regardless of unforeseen events or stay orders of the Court/Tribunal, which is in either way not attributable to the allottee/home buyer, the promoter is under an obligation to refund the amount on demand with interest at the rate prescribed by the State Government including compensation in the manner provided under the Act with the proviso that if the allottee does not wish to withdraw from the project, he shall be entitled for interest for the period of delay till ``` MSA NO. 17 OF 2024 ``` ``` 15 ``` handing over possession at the rate prescribed. 18. Here also, whatever be the reasons for delay, the complainant is not in anyway responsible for the same. Since the allotment is already cancelled by Annexure A6, the complainant is fully justified to claim refund of the amount paid by her. 19. Under the circumstances, I do not find any illegality in the order passed by the Authority which is confirmed by the Tribunal and the Regular Second Appeal fails and the same is dismissed accordingly. Sd/- ## M.A.ABDUL HAKHIM JUDGE sms ``` MSA NO. 17 OF 2024 ``` ``` 16 ``` ## **`APPENDIX OF MSA 17/2024`** ## **`PETITIONER ANNEXURES`** ``` Annexure 1TRUE COPY OF ORDER DATED 20/02/2023 IN COMPLAINT NO. 98/2022 OF THE KERALA REAL ESTATEREGULATORYAUTHORITY, THIRUVANANTHAPURAM Annexure 2TRUE COPY OF THE ORDER DATED 24/05/2024 IN REFA 36 OPF 2023 OF THE KERALA REAL ESTATE APPELLATE TRIBUNAL, ERNAKULAM ```