Projects receiving partial occupancy certificates prior to enactment are exempt from certain provisions of Real Estate (Regulation and Development) Act.

ORDER :

The petitioner-M/s Provident Housing Limited is before this Court calling in question order dated 30-09-2020 passed by the 1st respondent/Karnataka Real Estate Regulatory Authority (‘Authority’ for short).

2. Brief facts that lead the petitioner to this Court in the subject petition, as borne out from the pleadings, are as follows :-

The petitioner is a Company incorporated under the Companies Act, 1956 and is engaged in the business of real estate development. The petitioner advertises a project i.e., apartment complex in the name and style of “Provident Sunworth” in Sy.Nos.1 to 26 of Venkatapura Village, Kengeri Hobli, Bangalore. The 2nd respondent registers his interest by an application pursuant to the advertisement requesting the petitioner to allot an apartment in the project. On consideration of the application, the petitioner is allotted a flat bearing No.SUN-II-5G-506 on the fifth floor to the 2nd respondent by way of execution of an agreement to sell.

3. The 2nd respondent who is the applicant before the 1st respondent entered into a sale agreement with the petitioner for purchase of flat on 10-09-2014 and a construction agreement on the same day comes into effect. This was on the basis of a commencement certificate that was issued by the Bangalore Development Authority (‘BDA’ for short) in respect of the purchase in favour of the petitioner. It is averred that clause 1 of the construction agreement obliged the petitioner to hand over possession of the flat allotted to the 2nd respondent on or before 31-07-2016 with the extended period of 6 months from the date of commencement certificate which would be up to January 2017 subject to the condition that there was no delay or default in payment of installments to the project by the 2nd respondent and in any event which would be force majeure.

4. The petitioner submits an application to the BDA on 21-10-2015 for grant of partial occupancy certificate in respect of the project which was scrutinized and the same was granted by the BDA on 18-11-2015. The petitioner later makes another application on 28-03-2017 to the BDA for a second partial occupancy certificate. It is the averment in the petition that when things stood thus, negotiations and discussions were held between the petitioner and the 2nd respondent and later the petitioner gave its willingness to execute the sale deed and hand over possession of flat No.506 pursuant to the said partial occupancy certificate. On 14-05-2017, it appears, the 2nd respondent seeks to cancel the agreement that was entered into between him and the petitioner, on the ground that there was information to him that the land had not been legally acquired by the petitioner for construction of the Apartment complex. It was alleged in the communication that the petitioner had not produced any letter from the competent authority with respect to acquisition of land and the petitioner had not replied to all those queries which were intermittently raised by the 2nd respondent. The petitioner acceded to the request of the 2nd respondent and cancelled the agreement and the allotment made in favour of the 2nd respondent and also refunded a sum of Rs.17,85,212/-on 04-12-2017 after deduction of cancellation charges and applicable taxes.

5. Long after receipt of the said amount, the 2nd respondent knocks at the doors of the 1st respondent/Authority by registering a complaint seeking refund of an amount of Rs.6,84,494/-along with interest. On receipt of the notice, the petitioner appears to have filed its objections with regard to maintainability of the complaint before the 1st respondent and its entertainment by the Authority. Notwithstanding the objections with regard to maintainability, the Authority passes the impugned order, on the complaint so made by the 2nd respondent, on 30-09-2020 directing refund of Rs.6,84,494/-to the 2nd respondent within 60 days from 30-09-2020, failing which, it would carry interest at 2% per month. It is this order that