The main legal point established is that the Real Estate Regulation & Development Act, 2016 operates retrospectively, and the levy of interest for delay is compensatory in nature, aligning with the rate charged by the promoter for default in payment.

JUDGMENT :

Alok Mathur, J.

1. Heard Shri Ratnesh Chandra, learned counsel for the appellant as well as Shri Ashish Chaturvedi, learned counsel appearing on behalf of respondents.

2. The controversy in brief is with regard to the delay in handing over the possession of the flat which was sought to be constructed by the petitioner while developing apartments known as Smriti Apartments, Sector J Extension, Sitapur Raod Scheme, Jankipuram, Lucknow.

3. In the brochure published by the petitioner it was stated that the flats would be handed over within a period of 24 months as per clause 2.4 of the said brochure and as per clause 11.1 it was provided that in case possession is not given then the allottee shall be at liberty to seek refund of the entire money along with interest at the rate of 4% per annum.

4. It is stated that for certain reasons beyond the control of the petitioner construction activities could not commence and, hence, there was delay in completion of the said project. In the meanwhile the Real Estate Regulation & Development Act, 2016 came into operation and the said project was registered by the petitioner with the concerned authorities and further the date of delivery of possession was extended till 31.12.2019.

5. In light of the fact that the petitioner did not complete the project within the stipulated time, the respondent filed a complaint before the Real Estate Regulatory Authority, Uttar Pradesh seeking interest on the delay in completion of the said project as provided under Section 18 and also sought a direction to the petitioner for expediting the possession of the said flat.

6. In the application it was stated that in pursuance to the application made by the respondent he was allotted a flat no. D/1407/C which was valued at Rs.13,00000/-and by 13.12.2013 he had paid an amount of Rs.14,18,886/-. It was further stated by him that as per the registration booklet the possession was to be given within 24 months and, accordingly, he should have got possession by 01.10.2013 and till filing of the said application before authority, i.e., some time in 2018 the possession had not been given to the respondent/allottee and hence prayed for quahing the order dated 26.2.2019 passed by Chairman, Real Estate Appellate Tribubnal, U.P., Lucknow in Appeal No.87 of 2018 (Smt. Upasand Duggal Vs. Lucknow Development Authority).

7. The petitioner had put in appearance before the Authority and objected to the claim made by the respondent/allottee. The petitioner had admitted that the possession was to be handed over by 01.10.2013 but due to certain dispute and delay by the construction agency who was given the contract of constructing the said flats there was delay in completion of the said project. It was further stated that there was difficulty and delay in obtaining the possession of the said land due to farmers’ agitation and it is only when settlement was arrived at, the possession was given to the petitioners and, accordingly, submitted that the delay was beyond the control of the petitioners and, consequently, prayed that the interest as claimed by the petitioner does not deserve to be granted in peculiar facts of the present case.

8. Another objection made with regard to the claim of the allottee was that as per the brochure he was entitled only for refund of the entire amount with interest @ 4% and as per the settled terms and conditions there was no provision for grant of interest on the delay in completion of the said project and, consequently, stated that the prayer made by the allottee before the Authority could not be admitted/allowed.

9. Considering the arguments the Real Estate Regulatory Authority was of the considered view that the petitioner had delayed in handing over the possession of the said flat despite there being agreement in this regard and once there is a breach of the said agreement the allottee was entitled for interest for the delay in completion of the said project, and, accordingly, awarded interest @ MC