Imp. Rulings - Completion Certificate & Offer for Possession

 Imp. Rulings - Completion Certificate & Offer for Possession

Index;

1. REAT UP (2024.09.14) in Abha Khanna (IPE) Vs. KVG Realtech Pvt. Ltd. [(2024) ibclaw.in 133 REAT, Appeal No. 243/2020] 

2. SCI (2023.09.06) in Dharmendra Sharma v. Agra Development Authority [Civil Appeal Nos.2809-2810 Of 2024]

3. SCI (2023.02.09) In Debashis Sinha vs M/s R.N.R Enterprise & Ors. [Civil Appeal Nos. 3343 OF 2020, Neutral Citation 2024 INSC 667] 

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Real Estate (Regulation and Development) Act, 2016.

Transfer of title.

# 17. (1) The promoter shall execute a registered conveyance deed in favour of the allottee along with the undivided proportionate title in the common areas to the association of the allottees or the competent authority, as the case may be, and hand over the physical possession of the plot, apartment of building, as the case may be, to the allottees and the common areas to the association of the allottees or the competent authority, as the case may be, in a real estate project, and the other title documents pertaining thereto within specified period as per sanctioned plans as provided under the local laws:

Provided that, in the absence of any local law, conveyance deed in favour of the allottee or the association of the allottees or the competent authority, as the case may be, under this section shall be carried out by the promoter within three months from date of issue of occupancy certificate.

(2) After obtaining the occupancy certificate and handing over physical possession to the allottees in terms of sub-section (1), it shall be the responsibility of the promoter to handover the necessary documents and plans, including common areas, to the association of the allottees or the competent authority, as the case may be, as per the local laws:

Provided that, in the absence of any local law, the promoter shall handover the necessary documents and plans, including common areas, the association of the allottees or the competent authority, as the case may be, within thirty days after obtaining the occupancy certificate.

Return of amount and compensation.

# 18. (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:

Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.

(2) The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed, in the manner as provided under this Act, and the claim for compensation under this subsection shall not be barred by limitation provided under any law for the time being in force.

Rights & Duties of of Allottees

# 19. (1) The allottee shall be entitled to obtain the information relating to sanctioned plans, layout plans along with the specifications, approved by the competent authority and such other information as provided in this Act or the rules and regulations made thereunder or the agreement for sale signed with the promoter.

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(10) Every allottee shall take physical possession of the apartment, plot or building as the case may be, within a period of two months of the occupancy certificate issued for the said apartment, plot or building, as the case may be.

(11) Every allottee shall participate towards registration of the conveyance deed of the apartment, plot or building, as the case may be, as provided under sub-section (1) of section 17 of this Act.

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1). REAT UP (2024.09.14) in Abha Khanna (IPE) Vs. KVG Realtech Pvt. Ltd. [(2024) ibclaw.in 133 REAT, Appeal No. 243/2020] held that; 

• The issue of offering handing over possession prior to obtaining occupancy certificate was also examined by the Hon’ble Supreme Court in Civil Appeal Nos. 1232 and 1443-1444 of 2019 R.V. Prasannakumaar and ors. Vs. Mantri Castles Pvt. Ltd. and ors. decided on 11.02.2019 wherein it has been observed that possession cannot be handed over prior to obtaining occupancy certificate. 

• That as per the provisions of the U.P. Apartments Act, 2010 read with the provisions of Act, 2016  a  Promoter is required to offer legal and habitable possession to the allottees only after obtaining OC/CC and ask for clearing dues by raising final demand.

• The failure of the Developer to comply with the contractual obligation to provide the flat within the contractually stipulated period, would amount to a deficiency of service. Given the one-sided nature of the Apartment Buyer’s Agreement, the consumer fora had the jurisdiction to award just and reasonable compensation as an incident of the power to direct removal of deficiency in service.

• That the right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed and the

• Proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the Project. In that case he is entitled to and must be paid interest for every month of delay till the handing over of the possession.

• It is upto the allottee to proceed either under Section 18(1) or under proviso to Section 18(1).

• If an allottee chooses to remain in the project and in case the allottee seeks refund then he is entitled for interest on the deposited amount and/or compensation in accordance with the provisions of the Act 2016, which in our considered view will be in accordance with the principles of equity as well.

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2). SCI (2023.09.06) in Dharmendra Sharma v. Agra Development Authority [Civil Appeal Nos.2809-2810 Of 2024] held that; 

• In Debashis Sinha v. R.N.R. Enterprise (2023) [(2023) 3 SCC 195], this Court held that possession offered without the requisite completion certificate is illegal, and a purchaser cannot be compelled to take possession in such circumstances.

• On the other hand, the ADA, despite making an offer of possession in 2014, did not fulfil its statutory obligations by providing the requisite completion certificate and firefighting clearance certificate, both of which are essential for a valid and lawful offer of possession. The absence of these documents, which were also not furnished before the NCDRC, unquestionably vitiates the offer of possession made by the ADA..

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3). SCI (2023.02.09) In Debashis Sinha vs M/s R.N.R Enterprise & Ors. [Civil Appeal Nos. 3343 OF 2020, Neutral Citation 2024 INSC 667] held that;

• The observation made by the NCDRC of the respondents having successfully argued that it was not their fault, that no completion certificate of the project could be obtained, is clearly contrary to the statutory provisions.

• It is, therefore, evident on a conjoint reading of sections 403, 390, and 394 of the KMC Act that it is the obligation of the person intending to erect a building or to execute works to apply for completion certificate in terms of the rules framed thereunder. It is no part of the flat owner’s duty to apply for a completion certificate.

• True it is, the appellants ought not to have taken possession without the completion certificate; however, that was not a valid ground not to direct the respondents to apply for and obtain the completion certificate as required by law.

• Undoubtedly, they have also been on the wrong side of law by taking possession of their respective flats without the completion certificate, whatever might be the compulsion, we are not inclined to direct the NCDRC to decide on the compensation component.

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