TaxTMI 
TaxTMI 
2022 (7) TMI 1626
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been directed against the order in REFA No. 27/2021 which was filed against the order of the learned Adjudicating Officer (A.O.) attached to K-RERA dated 23.04.2021 in CCP No. 110/2020. 3. Appellant booked an apartment in July, 2019 in the multi-storied residential apartment project named 'Tritvam' at Marine Drive in Kochi launched by the first respondent. He paid total amount of Rs.16 lakhs towards advance amount. Advance payment was received by the first respondent before executing the agreement as provided under Section 13 of the Act. However, in October 2019, the promoter requested the appellant to make payment of the amount required for registration of the sale agreement. For that appellant requested by letter to cancel the booking of the apartment on the ground of inability to raise the money and also requested the promoter to return the advance amount of Rs.16 lakhs paid by him, to which, the promoter sent a reply letter intimating that out of Rs.16 lakhs received, an amount of Rs. 15,16,667/- is liable to be forfeited in view of the default on the part of the appellant and expressed willingness to return Rs. 83,333/-. Aggrieved by that reply, the appellant appro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elf shall address the Real Estate Regulatory Authority, and refer the matter of registration to be decided by the Real Estate Regulatory Authority. Till a decision on the issue of registration is taken, and orders are passed by the Real Estate Regulatory Authority, the Adjudicating Officer shall keep the matter pending, and shall proceed with the matter after a decision is taken by the Real Estate Regulatory Authority. 4. Dismissal of the appellant's application in CCP No.110/2020 dated 23/4/2021 by the learned Adjudicating Officer is confirmed without prejudice to the right of the appellant to approach the appropriate forum for the reliefs. 5. The findings of the Real Estate Regulatory Authority in the appellant's Complaint No.185/2020 that the Real Estate Regulatory Authority has no jurisdiction to decide the claim for compensation clubbed with advance amount and interest is confirmed, but the complaint is remitted to Kerala Real Estate Regulatory Authority for the purpose of initiating appropriate proceedings and passing orders appropriately in the matter of registration of the given project, and also for initiating necessary action for imposition of pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., deals with registration of real estate projects and its mandatory nature. It has been discussed in paragraph No. 33 of M/s. Newtech Promoters which reads thus: "Under Chapter II of the Act 2016, registration of real estate projects became mandatory and to make the statute applicable and to take its place under sub-Section (1) of Section 3, it was made statutory that without registering the real estate project with a real estate regulatory authority established under the Act, no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner a plot, apartment or building, as the case may be in any real estate project but with the aid of proviso to Section 3(1), it was mandated that such of the projects which are ongoing on the date of commencement of the Act and more specifically the projects to which the completion certificate has not been issued, such promoters shall be under obligation to make an application to the authority for registration of the said project within a period of three months from the date of commencement of the Act. With certain exemptions being granted to such of the projects covered by sub-section (2) of S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns for safeguarding the pecuniary interest of the consumers/allottees. In the given circumstances, if the Act is held prospective then the adjudicatory mechanism under Section 31 would not be available to any of the allottee for an on-going project. Thus, it negates the contention of the promoters regarding the contractual terms having an overriding effect over the retrospective applicability of the Act, even on facts of this case. 54. From the scheme of the Act 2016, its application is retroactive in character and it can safely be observed that the projects already completed or to which the completion certificate has been granted are not under its fold and therefore, vested or accrued rights, if any, in no manner are affected. At the same time, it will apply after getting the on-going projects and future projects registered under Section 3 to prospectively follow the mandate of the Act 2016. " 13. As per Section 3(1), the respondent's project will come under the "on going project" since the project is not over and completion certificate is not issued and it is obligatory for the respondent to make an application to the Authority for registration of the project. So ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 days as referred to under Section 71(3) of the Act. 85. The provisions of which a detailed reference has been made, if we go with the literal rule of interpretation that when the words of the statute are clear, plain and unambiguous, the Courts are bound to give effect to that meaning regardless of its consequence. It leaves no manner of doubt and it is always advisable to interpret the legislative wisdom in the literary sense as being intended by the legislature and the Courts are not supposed to embark upon an inquiry and find out a solution in substituting the legislative wisdom which is always to be avoided. 86. From the scheme of the Act of which a detailed reference has been made and taking note of power of adjudication delineated with the regulatory authority and adjudicating officer, what finally culls out is that although the Act indicates the distinct expressions like 'refund', 'interest', 'penalty' and 'compensation', a conjoint reading of Section 18 and 19 clearly manifests that when it comes to refund of the amount, and interest on the refund amount, or directing payment of interest for delayed delivery of possession,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this Court is whether the advance amount of Rs.16 lakhs claimed by the appellant is entertainable by the K-RERA. The A.O has found that the claim for return of amount with interest solely based on the fact that the appellant was constrained to cancel the booking of apartment due to his inability to raise the necessary funds for paying the total amount of apartment will not come within the purview of sub-section (1) of Section 18 or sub-section (4) of Section 19 to claim return of amount with interest and to seek compensation. The Tribunal also confirmed that finding of the A.O without prejudice to the right of the appellant to approach the appropriate forum for the reliefs. 18. According to the learned counsel for the appellant, the total cost of the project is Rs. 1,51,66,674/-. But, as advance, an amount of Rs.16 lakhs has been received from him. He would contend that Section 13(1) specifically prohibits acceptance of a sum more than ten per cent of the cost of the apartment, plot, or building as advance payment or an application fee, from a person without first entering into a written agreement for sale with such person. He would also contend that as per Rule 10 of the Rules....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llottees, in the manner as provided under this Act. He would further relies on Section 11(5) of the Act which empowers the promoter to cancel the allotment but only in terms of the agreement for sale. Proviso to sub-section 5 of Section 11 further provides that the allottee may approach the Authority for the relief, if he is aggrieved by such cancellation and such cancellation is not in accordance with the terms of the agreement for sale, unilateral and without any sufficient cause. 20. Learned counsel for the respondents on the other hand would contend that either Section 11(5), 18(3) or 18(5) will not come to the rescue of the appellant to claim return of advance amount since all those Sections applies in different context. 21. Section 11 comes under Chapter III under the caption "Functions and Duties of Promoter" with regard to creating of web page on the website of the K-RERA and enter all the details of the proposed project as provided under sub-section (2) of Section 4, in all the fields provided, for public viewing, the advertisement of different future developments. He is also bound to provide the information to the allottee regarding the sanctioned plans, layout plan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the registration under the Act or by any other reason he is liable on demand of the allottee in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment. Sub-section (3) provides that if the promoter failed to discharge any other obligations imposed on him under this Act or the rules or regulations or in accordance with the terms and conditions of agreement for sale, he shall be liable to pay compensation to the allottees. It is true that sub-section (3) of Section 18 only speaks about the compensation to be payable on failure of the promoter to discharge any obligation imposed on him under the Act, rules or regulations. One thing to be noted while analysing Section 18 is that the liability casts upon the promoter to return the amount received on satisfaction of the conditions like failure on his part to complete or unable to give possession in accordance with the terms of agreement or due to discontinuance of his business as the developer on account of suspension or revocation of registration under the Act etc. 24. Section 16 of the Act deals with the obligations ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e for the alleged violation of Section 13 of the Act, if such violation is proved. Learned counsel for the respondent also would contend that the course open to the Authority is only to initiate proceedings for violation of Section 13 of the Act and there is no provision in the Act or Rules for return of advance amount since the appellant himself unilaterally withdrawn from the project. 26. How far that contention of the respondent can be sustained in law is the point for determination mainly in these appeals. 27. Section 12 of the Act provides that where any person makes an advance or a deposit on the basis of the information contained in the notice, advertisement or prospectus or on the basis of any model apartment, plot or building as the case may be, and sustains any loss or damage by reason of any incorrect, false statement included therein, he shall be compensated by the promoter in the manner as provided under the Act. Proviso to Section 12 further states that if the person affected by such incorrect, false statement contained in the notice, advertisement or prospectus, or the model apartment, plot or building, intends to withdraw from the proposed project, he shall be....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... allottee does not rectify the defect within thirty days of the notice issued by the promoter, the application of the allottee shall be treated as cancelled and all sums deposited by the allottee in connection therewith including the booking amount shall be returned to the allottee without any interest or compensation whatsoever. It is true that a condition stipulated in the agreement attached to the Rules cannot have any binding effect or has any enforceable effect as provisions under the Act. But it would make the intention of the Rule making authority explicit that even if the allottee failed to rectify the default, the option available to the promoter is to cancel the allotment and in such contingency, the promoter is liable to return the booking amount without any interest or compensation. 30. Section 13 expressly prohibits the promoter to accept any sum more than 10% without first entering into a written agreement for sale and register the agreement for sale with the allottee. If at all the promoter in the case on hand had complied with the direction provided under Section 13, he could not have received Rs.16,00,000/-, which is more than 10% of the cost of unit booked with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....trial would not get commenced. Under the scheme of the Act and the Rules, presence of the accused is a pre-condition for commencement of trial. In his absence and until his presence was secured, it became difficult, may impossible, to proceed with the trial of the respondent- accused. In this behalf, the maxim nullus commodum capere potest de injuria sua propria- meaning no man can take advantage of his own wrong - squarely stands in the way of avoidance by the respondent and he is estopped to plead bar of limitation contained in Section 123. In Broom's Legal Maximum [10th Edn.] at page 191 it is stated "it is a maxim of law, recognized and established, that no man shall take advantage of his own wrong; and this maxim, which is based on elementary principles, is fully recognized in Courts of law and of equity, and, indeed, admits of illustration from every branch of legal procedure. The reasonableness of the rule being manifest, we proceed at once to show its application by reference to decided cases. It was noted therein that a man shall not take advantage of his own wrong to gain the favourable interpretation of the law. In support thereof, the author has placed reliance on a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that a written agreement was not executed as provided under Section 13(1) when the law prohibits the promoter itself to receive in advance in excess of 10% of the total sale value and thereafter refuse to repay the amount contending that there is no agreement for sale or that the appellant himself withdrawn from the project etc. cannot be sustained in law. Proviso to Section 11(5) enables the appellant allottee to approach the K-RERA for redressal of grievances when the promoter cancels the agreement as per Section 11(5). So, the receipt of amount in excess prescribed limit as contemplated under Section 13(1) is itself a violation of the provisions of law by the promoter and thereafter the promoter cannot find fault with the appellant contending that he himself withdrawn from the project or that no agreement was executed so as to attract the proviso to Section 11(5) of the Act. 35. At the same time, since the appellant himself withdrawn from the project, I do not think that he would be entitled to get any amount towards compensation. It has already been found that the issue regarding claim of refund of amount and interest is to be dealt with by the Regulatory Authority which ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit with respect to discovery and production of books of accounts and other documents at such place and at such time and summoning and enforcing the attendance of persons and examining witnesses etc. 39. Section 37 further provides that K-RERA for the purpose of discharging its functions under the provisions of Act or Rules or Regulations can issue directions from time to time to promoters allottees or real estate agents as the case may be and such direction shall be binding on all concerned. Section 38 further provides about the powers of K-RERA to impose penalty or interest in regard to any contravention of obligation cast upon the promoters, allottees and real estate agents under the Act or Rules and Regulations. So, the above provisions under the Act also would speak in volumes about the power and authority of the K-RERA to resolve the issue when a complaint is preferred or suo motu in relation to the Act and Rules. So, when it has come out that there is express violation of the provisions of the Act from the part of the promoter in receiving more than 10% of the sale value as advance without ex....