Chief Executive Officer, Raipur Development Authority v. Anup Kumar Sahu S/o Shri Sewak Ram Sahu
2024-01-17
GOUTAM BHADURI, RADHAKISHAN AGRAWAL
body2024
DigiLaw.ai
JUDGMENT : Goutam Bhaduri, J. Heard. 1. The present appeal is filed under Section 58 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as 'the Act, 2016') whereby the order dated 07/03/2023 passed by the Chhattisgarh Real Estate Appellate Tribunal, Raipur, C.G. is under challenge. 2. (I) The facts of the case, in brief, are that the respondent had filed an application before the RERA, Raipur under Section 31 of the Act, 2016 that he was allotted a 2-BHK Duplex Row House bearing House No.C-36A/01 in Section 10 of Kamal Vihar Project, Raipur for an amount of Rs.18,25,000/- on 10/06/2016. The allottee deposited an amount of Rs.18,21,250/- uptill 31/10/2017 but even after four years of filing the application before the RERA, he did not get the possession of the said house. It was further stated that the promoter RDA, by letter dated 27/08/2020 asked the allottee/respondent to deposit an amount of Rs.23,33,963.88/- wherein the GST amount was also shown. (II) It was the case of the allottee that at the time of purchase of the house though it was stated that it was a tentative price and the actual increase may inflate to 2-3% and demand of GST was not part of the condition but the amount was claimed with an inflated price to the extent of 35% instead of 1-2%. The allottee, therefore, requested to allot the house with an increase of 2% and in alternate requested that he may be allotted a plot in another project known as Indraprastha-2 on the price which was prevailing in the year 2016. It was further stated that if such conditions are not palatable or the RDA was not willing to perform, the entire return of the deposited amount was claimed for. 3. Non-applicant/appellant RDA stated that the allotment of the house was of 10/06/2016 for an amount of Rs.18,25,000/-. Thereafter, because of the increase in material price in the intervening period, by letter dated 27/08/2020 the increased price was asked for. They further stated that the payment of GST was already in the knowledge of the allottee and the increase of price was according to the market rate which was prevailing. It was further stated that they did not have any other plot available for allotment at the prevailing rate of 2016.
They further stated that the payment of GST was already in the knowledge of the allottee and the increase of price was according to the market rate which was prevailing. It was further stated that they did not have any other plot available for allotment at the prevailing rate of 2016. The delay was attributed for the reason that certain litigation was pending before the National Green Tribunal and the Supreme Court. Thereafter Assembly election followed. Consequently, no development could be carried out in the project and further they stated that till June, 2019 regular development was carried out and they sought for extension of the project time to the State Government. The RDA further stated that if the allottee does not want to purchase the house as per the rules, they are ready to return the amount after the deduction and prays for dismissal of the application. 4. The RERA by order dated 02/01/2021 dismissed the application and held that the increased price would depend on the facts situation of each case and further increase in the price cannot be automatically accepted since there was no agreement executed and it cannot be culled out from the facts that what was the last date for handing over the possession. The learned RERA further observed that according to the declaration filed before the RERA, the project was to be completed by 31/03/2019 and the extension of such time was sought for, which was pending. The RERA further observed that since the allottee failed to deposit the amount he was called upon to deposit by 11/09/2020 and the proceedings were pending before the National Green Tribunal and the Supreme Court from 2013 to 2019 and certain orders were passed as such the delay caused was reasonable and since the allottee himself failed to pay the increased amount, no relief can be granted. 5. Being aggrieved by such order, the allottee preferred an appeal before the C.G. Real Estate Appellate Tribunal, Raipur. The appellate Tribunal by its order dated 07/03/2023 which is under challenge herein directed to return the deposited amount of Rs.18,25,000/- along with interest @ 10.5% from 08/06/2016 within 45 days apart from the cost. Being aggrieved by such order, this appeal was been preferred under Section 58 of the Real Estate (Regulation and Development) Act, 2016. 6.
The appellate Tribunal by its order dated 07/03/2023 which is under challenge herein directed to return the deposited amount of Rs.18,25,000/- along with interest @ 10.5% from 08/06/2016 within 45 days apart from the cost. Being aggrieved by such order, this appeal was been preferred under Section 58 of the Real Estate (Regulation and Development) Act, 2016. 6. Learned counsel for the appellant would submit that in absence of any agreement, no outer time limit can be fixed for handing over the possession. He would further submit that fluctuation in the market rates cannot be attributed to the appellant and the delay was not caused in completion of the project. He would further submit that the learned RERA has rightly held that because of the pending proceeding before the NGT and the Supreme Court as certain order was passed in those proceeding the project was kept in abeyance, however, the learned Tribunal while deciding the issue failed to take into account the submission made by the appellant. He would further submit that the order would show that no reasons have been assigned to defer from the order of RERA to come to a different finding. He would further submit that therefore, the order is perverse and the appeal needs to be admitted on the substantial question of law as proposed. 7. Before the appeal is admitted the respondent appeared and opposed the arguments and submitted that no specific question of law arises for consideration as per Section 58 of the Act, 2016 and the appeal is required to be dismissed at the threshold. 8. Since the appeal is at the threshold of the motion hearing we have primarily considered the submission of the appellant as to whether the substantial question of law arises for consideration. A perusal of the record of the authority below would show that the respondent deposited an amount of Rs.18,21,250/- on 31/10/2017 and subsequently a demand was made on 27/08/2020. The initial deposit was made for a house bearing No. C-36A/01 and the respondent was allottee of that. The submission of the appellant that after the initial allotment in June, 2016 the project was kept in abeyance for certain litigation before the NGT and thereafter before the Supreme Court.
The initial deposit was made for a house bearing No. C-36A/01 and the respondent was allottee of that. The submission of the appellant that after the initial allotment in June, 2016 the project was kept in abeyance for certain litigation before the NGT and thereafter before the Supreme Court. The order of the learned RERA also records the same that between 2013-2019 the allotments were pending before the NGT and Hon'ble the Supreme Court and in few of the matters stay order was also passed. The records of RERA when were perused, we do not find such judgments or stay orders are on record. Where from such facts came to fore we are unable to appreciate. It is obvious that the Court or quasi judicial authorities will not act as a witness to procure the evidence of behalf of any litigant. If such orders are not part of the record, no inference could be drawn by any Court. 9. Apart from the said fact, the Supreme Court in the matter of M/s. Newtech Promoters and Developers Pvt. Ltd. Versus State of UP & Others Etc. {Civil Appeal No.6745-6749 of 2021} while dealing with the right of the allottee to seek refund as per Section 18(1)(a) and Section 19(4) of the Act has held that it is not dependent on any contingencies or stipulations thereof meaning thereby even if the submission of the appellant are admitted, the allottee cannot be directed to have a deferred allotment if he has exercised the option to get back his deposit. Para 25 of the said judgment which is relevant is reproduced hereinbelow:- 25. The unqualified right of the allottee to seek refund referred under Section 18(1)(a) and Section 19(4) of the Act is not dependent on any contingencies or stipulations thereof.
Para 25 of the said judgment which is relevant is reproduced hereinbelow:- 25. The unqualified right of the allottee to seek refund referred under Section 18(1)(a) and Section 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 handing over possession at the rate prescribed. 10. The judgment of learned RERA at one hand held that while the allotment was made on 10/06/2016 for estimated price of the house of Rs.18,25,000/-, the non-applicant at that time admitted to pay the actual price and he at that time also agreed to pay the service tax. On contrary it was further held that when the final amount of Rs.2469611.91 as against the deposited amount of Rs.18,21,250/- was asked for the balance comes to Rs.648362/-. On one hand the preposition & logic of RERA that since agreement do not specify the date by which possession of house can be given same can be held to be unlimited but at the same time it was held that the subject project was registered with RERA wherein the completion date was 31/03/2019 and RDA had sought for extension of such time from the State which was pending. Therefore, RERA by recording facts was conscious of the time line of targate date. Even if in the allotment letter, no time is stipulated but the time can be inferred from the other factual aspect, which are recorded it would show that the completion date of the project was 31/03/2019. The additional demand in this case was made on 27/08/2020, therefore, it was beyond the target date of completion of project i.e. of 31/03/2019. 11.
The additional demand in this case was made on 27/08/2020, therefore, it was beyond the target date of completion of project i.e. of 31/03/2019. 11. The letters which are on record of the allottee would show the plight for the reason that an amount was deposited with RDA to get a house was inflated upto 35%. The letters would indicate that the allottee was occupying rented house, therefore, it is obvious that a person would go for his own house as a natural consequence of a human behavior. When certain terms are directed by the institution like RDA and the general people at large attract to it and deposits the amount then in such case if the project falls beyond the prescribed time and the promissee acting in reliance on the terms made by RDA it would be held bound by the promise and the promise would be enforceable against it at the instance of the promissee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contact. This proposition related to promissory estoppel has been laid down by the Supreme Court in the matter of Motilal Padampat Sugar Mills Case { (1979) 2 SCC 409 } and observed thus in para 24 as under:- 24. “The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. It is elementary that in a republic governed by the rule of law, no one, howsoever high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception.
It is elementary that in a republic governed by the rule of law, no one, howsoever high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned : the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppel. Can the Government say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of “honesty and good faith”? Why should the Government not be held to a high “standard of rectangular rectitude while dealing with its citizens”? There was a time when the doctrine of executive necessity was regarded as sufficient justification for the Government to repudiate even its contractual obligations; but, let it be said to the eternal glory of this Court, this doctrine was emphatically negatived in the Indo-Afghan Agencies case and the supremacy of the rule of law was established. It was laid down by this Court that the Government cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action. If the Government does not want its freedom of executive action to be hampered or restricted, the Government need not make a promise knowing or intending that it would be acted on by the promisee and the promisee would alter his position relying upon it. But if the Government makes such a promise and the promisee acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like any other private individual. The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society and the constant endeavour of the Courts and the legislature, must, therefore, be to close the gap between law and morality and bring about as near an approximation between the two as possible.
The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society and the constant endeavour of the Courts and the legislature, must, therefore, be to close the gap between law and morality and bring about as near an approximation between the two as possible. The doctrine of promissory estoppel is a significant judicial contribution in that direction. But it is necessary to point out that since the docrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. If it can be shown by the Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promisee and enforce the promise against the Government. The doctrine of promissory estoppel would be displaced in such a case because, on the facts, equity would not require that the Government should be held bound by the promise made by it. When the Government is able to show that in view of the facts as have transpired since the making of the promise, public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance the public interest in the Government carrying out a promise made to a citizen which has induced the citizen to act upon it and alter his position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way the equity lies. It would not be enough for the Government just to say that public interest requires that the Government should not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it. The Government cannot, as Shah, J., pointed out in the Indo-Afghan Agencies case, claim to be exempt from the liability to carry out the promise “on some indefinite and undisclosed ground of necessity or expediency”, nor can the Government claim to be the sole Judge of its liability and repudiate it “on an ex parte appraisement of the circumstances”.
The Government cannot, as Shah, J., pointed out in the Indo-Afghan Agencies case, claim to be exempt from the liability to carry out the promise “on some indefinite and undisclosed ground of necessity or expediency”, nor can the Government claim to be the sole Judge of its liability and repudiate it “on an ex parte appraisement of the circumstances”. If the Government wants to resist the liability, it will have to disclose to the Court what are the facts and circumstances on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether those facts and circumstances are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government from the liability : the Government would have to show what precisely is the changed policy and also its reason and justification so that the Court can judge for itself which way the public interest lies and what the equity of the case demands. It is only if the Court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. The Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government whether the Government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the Government bound by the promise and the Court would insist on a highly rigorous standard of proof in the discharge of this burden. But even where there is no such overriding public interest, it may still be competent to the Government to resile from the promise “on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position” provided of course it is possible for the promisee to restore status quo ante.
But even where there is no such overriding public interest, it may still be competent to the Government to resile from the promise “on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position” provided of course it is possible for the promisee to restore status quo ante. If, however, the promisee cannot resume his position, the promise would become final and irrevocable. Vide Emmanuel Avodeji Ajaye v. Briscoe [(1964) 3 All ER 556 : (1964) 1 WLR 1326]. The same view has been reiterated by the Supreme Court in Manuelsons Hotels Private Limited Versus State of Kerala and others { (2016) 6 SCC 766 }. Thereby the RDA cannot claim the immunity from the doctrine of promissory estoppel and it was under the obligation to act in the manner which is fair and just. 12. Section 18 (1) and 19(4) of the Act, 2016 gives a right to the allottee for return of amount of compensation. For the sake of brevity relevant part of Section 18 (1) of the Act, 2016 is reproduced hereinbelow:- 18. Return of amount and compensation. (1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,— (a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or (b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, 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, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act: 13. The Chhattisgarh Real Estate (Regulation and Development) Rules, 2017 has been made in exercise of powers conferred by Section 84 of the Real Estate (Regulation and Development) Act, 2016, State Government, hereby, makes the rules for regulation and development of real estate in the State of Chhattisgarh. Chapter V of Rules of 2017 speaks about rate of interest payable of the promoter and the allottee and the timelines for refund.
Chapter V of Rules of 2017 speaks about rate of interest payable of the promoter and the allottee and the timelines for refund. Rule 17 of the Rules of 2017 whch is relevant is reproduced hereinunder:- 17. Rate of interest payable of the promoter and the allottee.- The rate of interest payable by the promoter to the allottee or by the allottee to the promoter, as the case may be, shall be the State Bank of India Prime Lending Rate plus two percent. 14. Further Section 2 (za) of the Act, 2016 which defines the interest postulates that the interest would be payable by the promoter to the allottee shall be from the date the promoter received the amount or any part thereof. For the sake of brevity Section 2 (za) with explanation (i) (ii) are reproduced hereinbelow:- 2 (za) “interest” means the rates of interest payable by the promoter or the allottee, as the case may be. Explanation.—For the purpose of this clause— (i) the rate of interest chargeable from the allottee by the promoter, in case of default, shall be equal to the rate of interest which the promoter shall be liable to pay the allottee, in case of default; (ii) the interest payable by the promoter to the allottee shall be from the date the promoter received the amount or any part thereof till the date the amount or part thereof and interest thereon is refunded, and the interest payable by the allottee to the promoter shall be from the date the allottee defaults in payment to the promoter till the date it is paid; 15. The record would show that the allottee /respondent has not filed any appeal against the rejection of the compensation order which has attained finality, therefore, after going through the record we deem it appropriate to direct return of Rs.18,21,000/- instead of Rs.18,25,000/-as it appears that there has been some calculation mistake, therefore, in view of the aforesaid discussion no substantial question of law arises for consideration in this case. 16. Accordingly, the appeal is dismissed.