• Devesh Saxena

UP RERA Ensures Possession, Delay Penalty to ATS Allure Homebuyers.

Updated: Jan 26

U.P. RERA recently passed a combined order in 10 complaint cases against ATS Allure and the homebuyers have all the more reasons to celebrate. Single order was passed for 10 cases which were heard together owing to the fact that all 10 cases were based on similar facts and would thereby lead to similar results.

Through the Order dated 30.07.2021 (uploaded on 25.08.2021) passed by UP RERA mainly two issues were decided. The two issues being –

  1. Whether it was because of ‘Force Majeure' that the Respondent's project could not be completed in time?

  2. Whether the Complainants have the right to Delay Interest Penalty caused by the Respondents?

While deciding the first issue it was contended by the Respondent builder that a writ petition is pending in the Hon’ble High Court of Allahabad which was also one of the reasons for the delay of the project except ‘force majeure events’. However, it was observed that the Respondents did not place on record any documentary evidence in support of their claim that the project was delayed because of any force majeure events.

Reliance was placed on Civil Appeal No. - 940/2017 - Vikram Chatterjee & Anr. V UOI & Ors., wherein force majeure was defined as “force majeure shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature.” On the basis of the said definition, it was observed that no such 'force majeure' situation has been faced by the Respondent builder which will qualify them to claim any benefit on the same ground. However, learned Authority was of the opinion that looking at the present situation, it would be appropriate to consider COVID-19 in the category of 'Force Majure' events.

With regard to the second issue, it was the Complainant’s case that since he has not been given possession of the allotted unit, the Respondent Builder is liable to pay him Delay Interest Penalty until possession is given to him. Whereas, the Respondent’s submission was that they would give possession to the Complainants by December, 2021.

Further, the Complainant No. 1 placed on record the Builder-Buyer Agreement according to which the flat’s possession was to be given by 03.03.2019. Thus, it was clear that the project has been delayed, and the situation warrants that delay interest penalty should be paid to the Complainant No. 1 from 04.03.2019 till the date when either the O.C/C.C. is obtained by the Respondent builder or the possession is given to them, whichever happens later. While the learned authority had mentioned the factual position of only Complainant No. 1 in the said order, however, they made clear that computation of delay penalty shall be made respectively in case of each complainant in accordance to their individual Builder-Buyer Agreements (BBA).

As far as the rate of interest is concerned, the learned Authority referred to Real Estate (Regulatory and Development)(Agreement for Sale/Lease) Rules, 2018 notified by the State Government under the Real Estate (Regulatory and Development) Act, 2016. According to Clause 9.2(i) of the said Rules, consequence of event of default by the promoter have been laid down by virtue of which an Allottee is entitled to terminate the agreement in which case the promotor will have to refund the entire amount of money paid by the Allottee towards the purchase of the apartment along with interest at the rate equal to MCLR (Marginal Cost of Lending Rate) on home loan of State Bank of India + 1% within 45 days of receiving the termination notice.

Further, the question as to till what date the interest is to be given was decided on the basis of Civil Appeal No. 6649-50/2018 Supertech Ltd. V Rajni Goyal according to which the interest is to be paid up to the date till the O.C./C.C. is obtained or the possession is given, whichever comes later. Thus, the delay interest penalty shall be paid by the Respondent builder from the date of default given in the BBA of each individual complainant till the date when O.C./C.C. is obtained or the possession is given, whichever comes later. Although, the Covid-19 period from 25.03.2020 to 25.09.2020 is considered as 'force majeure' by the U.P. RERA and the same is excluded in order to calculate the said delay interest penalty.

Thus, the order can be summarised as follows-

The Respondent is directed to give complete possession of the allotted units to the complainants latest by 31st December,2021 along with O.C./C.C.
The Respondent shall be liable to pay the delay interest penalty at the rate of MCLR + 1% from the date of default given in the BBA of each individual complainant till the date when O.C./C.C. is obtained or the possession is given, whichever comes later. This amount shall be adjusted in the final demand, if any, to paid by the allottee, otherwise, if there are no such dues left, the same shall be refunded back to the allottee.
The period of six months, i.e., from 25.03.2020 to 25.09.2020 shall be excluded for the purpose of calculating the delay interest penalty.
The Respondent cannot demand any other charges from the allottees while handing over the possession.
The offer of possession has be given along with O.C./C.C.

The complaints on behalf of 9 out of 10 allottees in the said order were filed and argued by S&D Legal Associates in association with its Partners and Associates based in Delhi/NCR.


Read Order:

ATS Combined Order in 9 cases 30.07.2021
Download PDF • 638KB