Haryana Real Estate Regulatory Authority, Gurugram

6/19/24, 12:18 PM Haryana Real Estate Regulatory Authority, Gurugram
PROCEEDINGS OF THE DAY 1. Application dated 07.02.2022 for placing on record additional documents
submitted by counsel of the complainant. In this application a list of 68 nos. of conveyance deeds were given. As
informed by the counsel for the complainant copy of 11 conveyance deeds were filed in the registry on
18.10.2021 and taken on record by the authority on 27.10.2021 proceedings, to have been executed after the
order dated 24.11.2020 in complaint no. 3687 of 2020 titled Rakesh Sachdeva and Others Vs. KSS Properties and
Others for registration of criminal complaint against the promoters on account of non-registration of the
project.2. Application under section 63 and 69 of the Act for remedial action against the promoter for violation of
order dated 20.07.2021 is taken on record. Application on behalf of the complainant for interim order under
section 36 and for commencement of penal proceedings under section 63 read with section 69 of the Act for
violation of order dated 20.07.2021 in the present complaint and order dated 24.11.2020 in complaint no. 3687 of
2020 is taken on record. 3. The matter was taken up for detailed arguments on each of the relief and keeping in
view the complexity of the matter it was decided that proceedings may be continued till conclusion of the matter
even if proceedings are continued late in the evening. 4. The present complaint was filed on 15.07.2021 and
registered as complaint no. 2785 of 2021. As per the records available, the complainant sent the copy of
complaint along with annexures through speed post and the receipts for the same are placed on record. The
complainant also sent the copy of complaint along with annexures vide email on 23.07.2021 which is also
available on the file. 5. The registry of the authority also sent a notice for hearing with a copy of the complaint
along with annexures through speed post to all the respondents. The tracking reports of the speed post are
available on the file which shows the successful delivery of items. Registry has also sent the notice along with a
copy of the complaint through email to the respondent at [email protected], [email protected],
[email protected], [email protected], [email protected],
[email protected], [email protected], [email protected], secretarialgrgh@M/s Indiabulls.com
and notice of hearing to the complainant at [email protected]. The same is shown to have been
delivered on the above email addresses on 23.07.2021 as per the report available on the file. As such, the service
of the notice is presumed to be complete. 6. The authority vide order dated 20.07.2021 directed the respondents
to file reply within two weeks i.e., by 04.08.2021. On failure to file reply, on 27.10.2021, the respondents were
directed to file reply within two weeks and a cost of Rs. 10,000/- was imposed on the respondents to be paid to
the complainant. The respondents were given opportunity time and again to file reply which they failed. However,
today during the course of hearing, the reply was filed by Sh. M.K. Dang on behalf of respondent no. 1 to 7 during
proceedings and copy has already been supplied to the complainant through the counsel. 7. It was brought to
the notice of the authority by the learned counsel for the complainant that even after giving last opportunity for
filing reply, reply was not filed and now this reply is being filed today after nearly seven months and plea for
covid relaxation, as ordered by the Hon’ble Supreme Court of India and Hon’ble Punjab and Haryana High Court
is being taken by the learned counsel for the respondent. In this regard the counsel for the respondent submitted
that the limitation period that in case where the limitation would have expired during the period between
15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall
have a limitation period of 90 days from 01.03.2022. In the event the actual balance period limitation remaining,
with effect from 01.03.2022 is greater than 90 days, that longer period shall apply (Hon’ble Supreme Court of
India order in Civil Original Jurisdiction Miscellaneous Application No. 21 of 2022 in Miscellaneous Application
No. 665 of 221 in Suo Motu Writ Petition (C) No. 3 of 2020; In Re: Cognizance for Extension of Limitation with
Miscellaneous Application No. 29 of 2022 in Miscellaneous Application No. 665 of 2021 in Suo Motu Writ Petition
(C) No. 3 of 2020). The authority is of the view that if reply is to be accepted today then the opposite party needs
to be compensated by the cost already imposed. The counsel for the complainant categorically stated that he
has no objection if reply is accepted even without imposing cost and the reply of the respondents may be taken
on record. Also, it is submitted that the counsel for the complainant has already received copy of the reply.
Accordingly, the reply is taken on record without any new imposition of cost.8. The reply on behalf of respondent
no. 11 (R-11) i.e., M/s Victory Valley Condominium Owners Welfare Association was also submitted today by Shri
Ashish Thakral, the Secretary of the association which was taken on record. 9. There are 12 respondents in this
matter. Respondents no. 1 to 7 are represented by Sh. M.K. Dang and Sh. Garvit Gupta Advocates. No one
appeared on behalf of respondents no. 8, 9, 10 and 12 in spite of the fact that the service of the notice on the said
respondents is complete. They are accordingly proceeded ex-parte. On behalf of respondent no. 11 i.e., M/s
Victory Valley Condominium Owners Welfare Association, Shri Ashish Thakral, Secretary of the association has
put in appearance. 10. The complainant submitted that the respondent no. 1 (R1) is a company registered under
the Companies’ Act 1956 and is promoter of the subject project within the meaning of the Act. Further, it was
submitted by counsel for the complainant that Sh. Lalit Goyal has been made respondent no. 2. It is alleged by
the counsel for the complainant that he is the person who is behind IREO related group of companies, although,
very smartly and cunningly he has kept himself out in the papers and from the records of the Ministry of
Corporate Affairs, Government of India as he finds no mention on the records of IREO group of companies on the
website of the Ministry. Also, it was alleged that he is the man behind the show and there is need of investigation
regarding his role in these companies. As he has been made a party and also represented through common
counsel for R-1 to R-7. 11. It was submitted by counsel for the complainant that Sh. Anupam Nagalia, the
respondent no. 3, is the Chief Operating Officer of the promoter company. Accordingly, he is responsible for
running the affairs of the company. In support of his submission the copies of the hypothecation deeds of
project ‘IREO VICTORY VALLEY’ in favour of M/s India Bulls Housing Finance Ltd. were produced where he has
signed on behalf of R-1, R-6 and R-712. The counsel for the complainant submitted that Sh. Bhupesh Bansal, the
respondent no. 4, is one of the present directors of the promoter company and accordingly responsible for
conducting the affairs of the company. Sh. Rajender Kumar Yadav, the respondent no. 5, is also one of the
directors of the promoter company as per website of the Ministry of Corporate Affairs as submitted by the
counsel for the complainant. 13. The Counsel for the complainant argued that the counsel for the respondents
https://haryanarera.gov.in/assistancecontrol/searchcasedetailopen/25886 1/12
filed reply only on behalf of 1, 6, and 7. No case for dropping of other respondents can be made without specific
authorization from them. Secondly, the said respondents have not joined proceedings despite notice to join
proceedings and cannot be given the advantage of their own wrongs. Thirdly, Annexure C13 at page 394 refers –
R2 and R3 have not denied their role in running the affairs of the promoter company. Besides, R3 is the
authorized signatory on the mortgage deeds on behalf of all three promoter companies R1, R6, and R7 (Page 228
refers). Someone who has the authority to mortgage the entire project can’t claim himself not to be a necessary
party. Respondents 4 and 5 are admittedly directors as per the information available on the Ministry of Corporate
Affairs website. All respondents are therefore, necessary parties, in line with the mandate of section 69 of the Act
as pressed for by the counsel of the complainant.14. M/s KSS Properties Pvt Ltd and M/s High Responsible
Realtors Pvt. Ltd. are respondent nos. 6 & 7 respectively and are the license holders/ developers in respect of the
subject project. Accordingly, they fall within the ambit of definition of promoter as per the provisions of the
Act.15. M/s Quick Real Estate Pvt. Ltd., the respondent no. 8, is alleged to be a shell company by the counsel for
the complainant. It was also alleged that this company was used by the promoter for taking club membership fee
varying from Rs. 3.5 lacs to 7 lacs per home buyer. Sh. Punit Monga and Sh. Nitin Gupta, the respondent no. 9
and 10 respectively, are the shareholders having share of 50% each in M/s Quick Real Estate Pvt. Ltd. Both are
the employees of IREO group as alleged by the counsel for the complainant and he also submitted that their e-
mail addresses are [email protected] and [email protected] which clearly reflects their association with
the IREO group. Sh. Sh. Nitin Gupta, the respondent no.10, was serving as treasurer in the erstwhile resident
welfare association.16. M/s Victory Valley Condominium Owner Welfare Association is the respondent no.11 in
the present matter. 17. M/s Indiabulls Housing Finance Limited is the respondent no. 12 in the present matter. It is
alleged by the counsel for the complainant that the entire project has been mortgaged by the promoters in 2016
itself in complete violations of the provisions of the Act. However, during the course of arguments, the counsel
for the complainant agreed that his unit has been conveyed and is free from all encumbrances and as per section
11(4) (h) of the Act, if any such mortgage or charge is made or created then notwithstanding anything contained
in any other law for the time being in force, it shall not affect the right and interest of the allottee who has taken
such apartment as in the present case.18. The counsel for the complainant submitted that the complainant had
purchased a unit bearing no. A/2104 from the original allottee in the subject project and a conveyance deed
bearing no. 6434 dated 05.02.2021 was executed in her favour. However, these changes were not made in the
RWA’s record as the RWA of allottees was working on the directions of the directors/office bearers of the
promoter company.19. On the other hand, the counsel for the respondent no. 1 to 7 has argued that this
complaint filed by a single allottee is totally mala-fide, baseless and just to harass and pressurize respondent no.
1 to 7. The complaint is a misuse of the process of law in as much as the project has already been completed and
more than 680 families are residing therein and more than 590 conveyance deeds have been executed. In fact,
the conveyance deed of the unit of the complainant was registered way back and the possession was handed
over to the original allottees vide letter dated 26.04.2019. As per the recital of the conveyance deed, no claims of
the original allottees remained towards the promoter. After the sale of the said unit to the original allottees by the
promoter, the complainant with her eyes open and after seeing the project and the subject unit purchased the
same from the original allottee. He further submitted that even the original allottee had never raised any
objection or claims against the promoter and the complainant has no right to make the false claims made against
the promoter in the present complaint. As per clause 3, 12, and 15 of the conveyance deed, all works were done
to the satisfaction of the allottees.20. In rebuttal the counsel for the complainant has argued that it may be
appreciated that a complaint under section 31 of the Act for violation of the provisions of the Act may be filed by
any aggrieved person. The authority may take cognizance of the violation of the provisions of the Act even if
raised by a non-allottee. The complainant on the other hand, is admittedly an allottee. Secondly, the R11
association after being duly constituted as a body of allottees on 02.02.2022 has adopted the pleadings of the
complainant in substance by filing its reply and endorsing the reliefs claimed. Thirdly, promoters can’t be
absolved of the statutory violations being committed by them either before or after registration of conveyance
deeds, the self-serving conditions put in such deeds not-withstanding.The reliefs sought by the complainant
were argued at length as under:I. To file a criminal complaint against the respondents (R1 to R7) with the
competent magistrate for their failure to register the project as per the provisions of the Act despite repeated
orders of this authority.21. The counsel for the complainant pressed for penalizing the respondents (R1 to R7) for
offences committed by them under section 59, 60, and 61 of the Act and earmark a percentage of the penalties as
deemed fit by this authority for the benefit of the subject project.22. The complainant counsel has alleged that
the promoter has not got the project registered in spite of the fact that the directions were issued by this
authority. In pursuance of the directions of this authority, the officers of the engineering branch of this authority
visited the project site and it was transpired that there were two different occupation certificates granted by the
Director, Town and Country Planning, Haryana, Chandigarh in respect of the towers mentioned therein vide
memo no. ZP-358/SD(BS)/2016/14990 dated 25.07.2016 and memo no, ZP-358-Vol.-I/ SD(BS)/2017/24532 dated
28.09.2017 respectively. It is pertinent to note that the first occupation certificate was granted on 25.07.2016 i.e.,
before coming into force of the Act of 2016 and second occupation certificate was granted on 28.09.2017. It may
be presumed that the application for grant of occupation certificate dated 28.09.2017 would have been submitted
before the competent authority before 28.07.2017 i.e., coming into force of the Haryana Real Estate (Regulation
and Development) Rules, 2017 and a window of three months was given for applying for registration in such form
as prescribed by the Haryana Rules of 2017. 23. The counsel for the respondent no. 1 to 7 has argued that the
project does not fall within the ambit of definition of on-going projects as defined under rule 2(o) of the rules of
2017.24. The authority observes that the occupation certificate for the part project was granted on 28.09.2017 and
going strictly by the definition of on-going project provided in rule 2(o) that part of the project is exempted from
registration as that part of any project as per rule 2(o)(ii) is out of ambit of on-going project for which part
completion/completion, occupation certificate or part thereof has been granted on or before publication of these
rules. These rules were published on 28.07.2017 whereas part occupation certificate for part of the subject
project was granted on 28.09.2017. Accordingly, the part of the project for which occupation certificate was
granted on 25.07.2016 is not on-going project as per the above quoted provisions.25. Naturally, keeping in view
the abovementioned dates and provisions of the rule 2(o) of the Haryana Rules of 2017, it becomes clear that the
part for which occupation certificate was granted on 28.09.2017 subsequent to the coming into force of the
Haryana Rules of 2017 i.e., 28.07.2017 was not exempted from the registration. 26. However, it is a matter of fact
that within two months of coming into force of the Haryana Rules of 2017, the part OC for the subject project was
granted by the competent authority. But the project is still not complete and the development works and other
amenities have not been completed before coming into force of the provisions of this Act. Considering the above
facts, certainly, the registration would have given a clear picture of the subject project as to what development
works are still pending and what community amenities and facilities and other infrastructure requirements were
lacking in the said project as the occupation is in respect of buildings and completion is in respect of project. It
needs to be considered that the portion of the buildings which have been granted occupation certificate by the
competent authority only after six basic amenities i.e., road, water, sewerage, electricity, storm water and
horticulture are certified to be complete. There may be various amenities, community facilities commercial
facilities, parks, other infrastructural requirements, etc. to be provided as per layout plan are not considered
while granting occupation certificate for towers but these are essentially required to be completed before
completion certificate is granted. 27. It is pertinent to mention over here that the purpose of registration of on-
going project is to take stalk of the situation as to what part of the project has been completed and what part of
the project is still left to be completed. This helps allottees to know as by what time facilities as per the
sanctioned lay out plan/building plan will be completed by the promoter. 28. The promoter was liable to register
that part of the project atleast with the Haryana Real Estate Regulatory Authority and application was to be made
to interim authority within three months of coming into force of the Act i.e., 01.05.2017. No such application for
registration of the project has been shown to have made or produced. Accordingly, the promoter is guilty for not
registering the project but keeping in view the fact that within two months of the publication of the Haryana
Rules, 2017 the occupation certificate was obtained in respect of the part of the subject project and the
responsibility to give possession to the allottees within two months of grant of occupation certificate is obvious
so that the allottees are not in suspense as to by what time the possession of their unit would be given. Keeping
in view the fact that in the subject project, all roads have been laid, sewer lines and storm water drains have been
provided, water supply system is in place, streetlights are also in place, the infrastructure of the project has been
laid which was concurred by both the parties and also the secretary of the association, which is respondent no.
11. But still many things remains to be provided requiring substantial expenditure. (Page 138-141 of the
complaint refers).29. The authority is of the view that although, the matter regarding interpretation of rule 2(o) of
Haryana Rules, 2017 is pending before the Hon’ble Punjab and Haryana High Court regarding validity of taking
out of the projects in the on-going category by way of exemptions provided in rule 2(o) of Haryana Rules, 2017
and requirement of registration of projects coming within the exemption of rule 2(o) of Haryana Rules, 2017 have
been stayed. But in the present case for the part of the project as has been explained above comes within the
ambit of registration under the Act and even after allowing exemptions in the definition of on-going projects.
Accordingly, that part of the project for which occupation certificate was received after publication of the said
rules, should have been registered. Further, in this case the registration has also become essential as the
detailed information is required by this authority for disposal of many complaints which are received in this
authority w.r.t the subject project. In this case substantial amount is yet to be spent for the completion of the
project in question so in case, the promoter fails to complete the infrastructural work then either the competent
authority or association of allottees or in any other manner as provided under section 8 of the Act action has to
be taken to carry out the remaining development works which require resources. These resources would have
been available in case the project is registered and 70% amount is deposited in the separate RERA account
which could only be used for the land cost and construction cost. Due to non-registration of registerable part of
the project no such account was opened by the promoter. Accordingly, the amount for completing the remaining
works will have to be arranged from the promoter either from the sale of unsold inventory or from his own
resources. 30. The counsel for the complainant has argued that blatant violation of the orders of the authority for
registering the project – orders dated 24.11.2020 in 3687 of 2020 and 20.07.2021 in the present complaint refer.31.
Therefore, penal proceedings are concluded regarding non-registration of the project by the promoter for
violation of section 3 of the Act which is punishable under section 59(1) of the Act and accordingly, a penalty of
Rs. 25 lacs are imposed on the promoter company. 32. Regarding launching of criminal proceedings under
section 59(2) the counsel for the respondent submitted that it was never the intention of the respondent promoter
to violate directions of the authority issued in this regard but because of COVID-19 situation the promoter was
not able to make an application as large number of documents and voluminous information is to be supplied to
the authority for registration of the project. The counsel for the respondent further assured that within one month
the application for registration of that part of the project which is registrable as per present Haryana Rules, 2017
shall be made. In case of further violation, the authority may take serious view. The emphasis of the authority in
the initial years of implementation of the Act has been focused on compliance of registration requirements.
Accordingly, the authority directed that one more opportunity be given to the promoter to make application for
registration of that part of the project which is registrable as per present Haryana Rules, 2017 (which have not
been declared ultra-virus so far by the Hon’ble Punjab and Haryana High Court and matter is pending therein)
within one month otherwise the authorised officer of the authority is directed to file a complaint before the
magistrate of competent jurisdiction for taking cognizance under section 59(2) of the Act as despite the repeated
directions by the authority to register the subject project, the respondent promoters have failed to comply with
the said directions which is a violation of section 3 of the Act and punishable under section 59(2) of the Act ibid.
Shri Sumeet Nain, Engineer Executive of the authority, is authorized to file a criminal complaint on behalf of this
authority and hire the services of an advocate/public prosecutor, if required, in case application for registration is
not made within one month. The respondent promoter is also directed to submit record of all allottees in the
performa of the DPI within one month. 33. Furthermore, an affidavit shall be submitted by the respondent no. 3
who is the COO of the promoter’s company and responsible for running day to day affairs of the company or in
case, respondent no. 3 is not the COO then any authorized representative /key managerial functionary duly
authorized by the Board in its meeting to submit the requisite information required for registration. 34. As the
promoter has failed to complete the project as no completion certificate has been issued and has also failed to
get the project registered; in that eventuality the account of the promoter in which the sales consideration of
already sold unit is being received is freezed till further orders of this authority and promoter is restrained to
withdraw any amount from the said account. As this project is registrable and three accounts need to be opened,
out of which RERA account where 70% amount is deposited can only be used for construction and land cost.
Here in this case such account has not been opened. The authority has left with no other option but to freeze the
above account till information is made available to this authority.II. To order prohibition of sale or creation of
third party interest in any shape or form in any property of the subject project including apartments, shops,
community buildings, school land or any other spaces, constructed or otherwise, by the respondents (R1 to R12)
or anyone acting on their behalf until such time the obligations in terms of this complaint including payment of
monies due are discharged by the respondents to the satisfaction of this authority, or until such other time as the
authority may deem fit in the circumstances.35. The authority vide its orders dated 20.07.2021, while exercising
its power under section 36 of the Act had restrained the promoter from selling of the unsold units in the subject
project. In compliance of the orders of this authority, the Engineer Executive visited the subject project on
04.08.2021 and a notice w.r.t restraining of sale of unsold units in the subject project was pasted in the office of
the builder/ promoter. A detailed report in this regard has also been submitted on 24.08.2021 which has been
taken on record.36. It was alleged by the counsel for the complainant that the respondent promoters have not
registered the project but continue to engage in sale without being visited with penal consequences and further
requested that Sub-Registrar, Badshahpur may be directed not to register conveyance deeds until the dues of
the respondent promoters to R11 are cleared. The promoters should further be directed to deposit a sum of Rs.
100 crore with the authority to secure the sums due to the R11 association in light of the facts and circumstances
of the case. The counsel for the complainant contended that the R11 association has a charge by virtue of
section 19 of the Haryana Apartment Ownership Act, 1983 for unpaid dues against the apartments. He further
submitted that the directions issued to the Sub Registrar for prohibiting registration of sale would therefore, be
in line with the said section and will further the mandate of section 3 of the Act which essentially is “no
registration no sale”. The complainant alleged that the promoters continue to sell units in the project through big
resellers like M/s Evinos Builders Limited and M/s Indiabulls Commercial Credit Line Limited (Pages 33 to 37 of
the additional documents filed on 07.02.2022 refer), who are not allottees in the true sense of the term and are
only holding the units to sell to other buyers. Conveyance is still being done by the promoters to the end buyer.
The authority must take cognizance once this information is brought to its notice.37. The respondent promoters
are also liable for penalties under section 59, 61, 63, and 69 of the Act. It is imperative that the authority
requisitions the record of all sales carried out since 24.11.2020 when the order for registration of criminal
complaint against the promoters, for non-registration of the project, was first made by the authority. It is
imperative that the respondent promoters are held accountable for the monies collected by them in terms of
conveyance deeds referred in the application for additional documents dated 07.02.2022.38. However, it was
alleged by the counsel for the complainant during the course of hearing that even after the restraining order of
this authority, still sales are being made by the promoter. The properties have been given/allocated to M/s
Indiabulls Housing Finance Ltd. who are their financer and M/s Indiabulls Housing Finance Ltd. is selling these
properties and conveyance deed is being executed by the promoter. Additional documents filed by the
complainant vide application dated 07.02.2022 on pages 33-37 reflect bulk inventories in the name of two entities
M/s Evinos Builders Ltd and M/s Indiabulls Commercial Credit Limited. The counsel for the complainant alleges
that these entities are now selling the inventories and conveyance deeds are being registered in violation of
order dated 20.07.2021 in the present complaint and order dated 24.11.2020 in complaint no. 3687 of 2020. The
authority restrained the promoter for further sales in the project with effect from 20.07.2021. The conveyance
deeds submitted by the complainant provides date of execution of the conveyance deeds which are post
20.07.2021 but these have been found to be based on the builder buyer agreements much earlier to this date.
Accordingly, the sales have taken place prior to 20.07.2021. The complainant was unable to submit any proof w.r.t
the sales after words. Although, he submitted a fresh list of conveyance deeds without any copy where the guilt
of the promoter is established beyond doubt. 39. Keeping in view the fact that serious allegations have been
made but requisite proofs to substantiate the allegations are not on record. The authority keeping in view, the
interest of the allottees and the fact that infrastructural work are pending in the subject project for completion
apart from other dues, the authority thinks it appropriate that an inquiry under section 35(2) of the Act the
instituted in the affairs of the promoter (i) To ascertain whether any sales have been made after restraining the
promoter on 20.07.2021 and whether the conveyance deeds submitted by the complainant and also the units
mentioned in the list of conveyance deeds submitted on 07.02.2022 have been sold post the restraining
orders. (ii) To ascertain whether that no unsold inventory as existed on 20.07.2021, has been put to sale either
directly or indirectly through any other entity.(iii) The list of unsold inventories as on 20.07.2021. (iv) The list of
sold inventories as on 20.07.2021 along with details of buyers, builder buyer agreements, sale considerations,
etc. (v) The details of resources of the promoters from where the cost of pending works and dues to the resident
welfare association could be recovered. (vi) The dues payable by the promoter to the resident welfare
association.(vii) Details of loans and advances given with copy of accounts.(viii) A report regarding resources
generated by respondent no. R8 and expenditure incurred/ funds diverted to the promoter.(ix) Role of Sh. Lalit
Goyal in the IREO Group of Companies be ascertained.III To order the respondents (R1 to R7), jointly and
severally to deposit the cost of pending works with this authority, with withdrawal being subject to completion of
works to the satisfaction of this authority. 40. The attention of the authority was drawn towards the fact that a
sum of Rs. 32 crore is required to complete the pending works in the subject project. The complainant in this
regard has placed on record a “Technical Due Diligence Report” for the Victory Valley Condominium Owners
Welfare Association dated February 2021 prepared by the M/s Cushman & Wakefield. In the said report (Page no.
138 to 141), estimated cost for pending infrastructure works at the subject project is mentioned. Further, the
counsel for the complainant drew attention of the authority towards the fact that this Victory Valley Condominium
Owners Welfare Association was the association having erstwhile governing body members of the employees of
the promoter and NOT ALLOTTEES. The counsel for the complainant has argued that this factum may be
ascertained from the list of allottees filed with additional documents on 07.02.2022. 41. Regarding the
background under which this report was prepared, it was submitted by the counsel for the complainant that this
Victory Valley Condominium Owners Welfare Association was to take up only the maintenance work whereas
major works which were pending for completion of the project were outside its ambit. Accordingly, to clearly
delineate the scope of maintenance work and incomplete infrastructure work in the subject project, this report
was prepared. The report was attached with the complaint and the copy of the complaint was sent to the
respondents. 42. The promoters are also directed to deposit the cost of incomplete development works and
payment of dues to the resident welfare association in a separate RERA account to be opened while registering
the project. IV To order the respondents (R1 to R7), to complete the pending woks in a time bound manner and
obtain completion certificate from the competent authorities or in the alternative exercise powers under section 8
of the Act to take over the project and order completion of works by a competent body or authority.43. The
counsel for the respondent no.1 to 7 on this point submitted that the development works in the subject project
are complete and the report by a third party carries no meaning when the authority has also appointed local
commission in the other case bearing no. 3687 of 2020 titled as Rakesh Sachdeva vs M/s KSS Properties w.r.t the
same project. The plea taken by the learned counsel for the respondent no. 1 to 7 was vehemently opposed by
the counsel for the complainant as the report has been got prepared by the erstwhile resident welfare
association which consisted of the employees of the promoter itself from a reputed third party which is normally
involved in preparing such type of report and the local commission report is on some specific points and is not a
comprehensive one. The local commission’s report dated 14.12.2020 in Cr No. 3687 of 2020 has also been
perused by the authority which is relevant to some extent in this case and the conclusion of the local
commission report is reproduced below which clearly shows that there are deficiencies in the subject
project:The site of the project is visited physically, and the observations are based upon the actual construction
at site and described further :1. Occupation certificate for all the towers has been granted by DTCP Haryana but
some internal and eternal patches are unfinished in Tower- A, B, C, D18, D16 and D22 i.e. plaster and paint where
unsold inventory is left. Further all the services are provided as per the sanctioned plan.2. Secondary fire
staircase in the tower was made mandatory in the year 2017 by Director, Fire Services, Haryana and the work for
secondary fire case was started but till date it is not completed in all towers.3. As on date an ultimate load of
10421 kw and partial load of 1008 kw is sanctioned vide memo no. CH-2/SE/C/Sol-221 dated 13.2.2017 by DHBVN.
The work for 33 kv switching station is just started and laying of cables is in progress./The main entrance rom 60
meter road is fully operational whereas two entrances from 24 meter sector road are constructed but not
operational from 24 meter sector road as the road is not constructed. These two entrances are operational from
internal roads of the project.4. The convenient shopping is under construction for which occupation certificate
has not been granted. Further no occupation certificate has been granted for the nursery schools.44. Although, it
is matter of fact that the aforesaid LC report was confined to fire safety, electrical infrastructure & lift and lobby
etc., whereas the list of incomplete infrastructural work has already been produced before the authority as per
technical due diligence report.45. The authority observed that the reply submitted by the respondent is very
casual and general in nature where no comments whether the works mentioned from page 138 to 141 of the
report have actually been completed on the site or not, has not been given. 46. The authority after going through
the technical due diligence report and hearing arguments of both the parties has arrived at the conclusion which
have been recorded earlier also that the reply of the respondent is general in nature without any specific
averment on the incomplete infrastructure work that have been pointed out in the “Technical Due Diligence
Report”. 47. The department of Town and Country Planning Government of Haryana grants license for
development of a colony/ real estate project under the Haryana Development and Regulation of Urban Areas Act,
1975 and Rules framed thereunder. The license for development of the colony is issued for a fixed period and
after expiry of the license period there is provision/ practice of renewal of licenses and there is no time limit
prescribed/ fixed for completion of the project. In case of plotted colonies/ real estate projects part completion of
part of the project is granted from time to time on completion of specified internal development works. There are
very few cases where the promoters have obtained completion certificate of a project. Leaving open the
completion of project is causing hardship as well as resentment among allottees as they are not sure as by what
time the infrastructural facilities, community facilities and commercial facilities as per the approved layout plan
will come on ground. There are projects where licenses were issued decades ago have not obtained completion
certificate and the community facilities and amenities have not been provided even now after lapse of years
together and there is no certainty as by what time these would be provided for which conclusive proof is
obtaining completion certificate. Similar is the position in case of group housing projects, rather position is little
worse as in case of group housing projects the practice of occupation certificate is followed which is granted
under the Haryana Building Code and is only in respect of towers/ buildings found habitable with no concern for
community and commercial facilities. The license is granted under the Haryana Development and Regulation of
Urban Areas Act, 1975 and there is no provision of granting OC but provision of granting part CC/CC for the
project. The OC is granted for the building whereas part CC/CC granted for the project. There are large number of
cases observed by the authority where individual towers have been granted OC and the buildings in the whole
project have been granted OC and also registration obtained by the promoters from interim RERA in respect of
such towers and most of the part of the common areas and community facilities have been left out. The authority
observes that in case of group housing projects part CC be granted for that part of the project where common
areas have been developed, infrastructure have been provided to serve the buildings for which OC has been
granted. There have been projects where builder has obtained OC for all the towers but number of infrastructures
works in the project including roads in some of the areas, regular water supply, electric supply and sewerage
systems have not been laid. The allottees are living in miserable conditions. There are no connectivity with the
main roads. Open spaces and green areas are not developed in the project, but OC is granted for the towers and
there is no binding on the builder to complete the lacking infrastructural facility in a time bound manner. The
authority observes that licenses should not be granted in those areas where during the initial licensing period,
the agencies responsible for external development services are not in a position to provide the same. Similarly,
without initially having 24 meter road connectivity licenses shall not be granted as there are many such projects
where there is no likelihood in near future for such connectivity and even in some cases this connectivity will
never be available although planned on the papers. 48. As in rare cases promoters obtain completion certificate
the authority observes that after the OC for all the towers in a group housing project has been granted under
Haryana Building Code a time limit be prescribed for obtaining completion certificate of the project so that
allottees comes to know as by what time infrastructural and common areas will be developed and community
and commercial facilities as per layout plan shall be provided. 49. The authority is of the considered view that it
is an obligation of the respondent promoter to complete the subject project. Accordingly, the respondent
promoter is directed to complete the subject project and obtain the completion certificate w.r.t the subject
project. The respondent promoter has to declare the timeline for completion of project and obtaining the
completion certificate.V To order the respondents (R1 to R7), jointly and severally, to deposit their share of
common area maintenance charges and other dues with R11, with a direction to keep the said monies deposited
with this authority in an interest-bearing deposit for and on behalf of R11, until such time R11 is handed over to a
duly elected body of resident owners.50. The counsel for the complainant has argued that R1-R7 admittedly owe
a sum of at least Rs.15,51,74,557/- (the sum as of 31.03.2020) in CAM and other dues to the association, R11
(Annexure C9, audited financial statement of R11 for the year ending 31.03.2020 at page 383 refers). The counsel
for the complainant averred that respondents R1 to R7 may, therefore, be directed to pay their dues as of today
to the association (R11). It is the obligation of the promoter to pay common maintenance charges to the
association of allottees in respect of unsold inventory.51. It is apparent from the audited financial statement of R-
11 association that a sum of R. 15,51,74,557/- was due to the association as on 31.3.2020 from the promoter
against CAM against unsold inventory and other dues (page 383 of the complaint refers). These dues were
payable by the promoter to the Association as part of its obligation and it is accordingly ordered.52. The counsel
for the complainant further argued that the project is admittedly not complete as of today and the erstwhile
governing body of R11 was not an “association of allottees” (Page 265-268 refer) within the meaning of the Act
and did not even conform to its own bye laws (Page 273 clause 5.1 and 5.2 refer). It was a body admittedly
comprising of employees of the respondent company who were neither allottees/owners nor residents (Page 265-
268 refer). The counsel for the complainant further submitted that the authority has jurisdiction to decide as to
whether or not the association R11 when first formed was an “association of allottees” within the meaning of the
Act. The authority cannot deem the project to be handed over to such a body on the date of deed of declaration
i.e., 09.02.2018 (Annexure C7 – page 246), especially when the project was and continues to be incomplete to this
day. It is of import to note that as many as 200 units were admittedly unsold (page 332-358 details of unsold
units) on the date of DoD i.e., 09.02.2018. The counsel of the complainant stressed that the association of
allottees was formed in the true sense only on 02.02.2022 (Annexure R11-3 refers). 53. The counsel for the
respondent no. 1 to 7 argued that the affairs of the subject project were taken by respondent no. 11 which was
independent body duly registered under the applicable provisions of law. The matter raised in the present
complaint were also raised before the District Registrar, Firm & Societies who appointed administrator vide order
dated 06.10.2021 and fresh elections have already been held. Moreover, the promoter did not commit any
illegality in mortgaging part of the project and clear title of the unit of the complainant and unit have been
conferred upon the respective allottees. 54. At length the discussion were held and while normally the liabilities
payable by the promoter before handing over to the association of allottees remain recoverable from promoter
and it is his obligation under the Act if such outgoings/ liability are before such transfer but in the present case,
it is evident from the bare perusal of page 265 to 268 of the complaint and the additional documents filed by the
complainant which includes details of allottees filed under rule 26(2) of the Haryana Development and Regulation
of Urban Ares Rules, 1976 by the promoter. It was argued by the counsel for the complainant that it is clear that
the erstwhile RWA was not an association of allottees and, therefore, no project handover within the meaning of
the Act could have happened to such an association. The outgoings/ liabilities are after transfer of possession to
the association of allottees as per the deed of declaration filed and hence, are liable to be recovered as per the
provisions of Haryana Apartment Ownership Act and Haryana Apartment Ownership Rules. Even on the day of
filing of the deed of declaration a sum of Rs. 3.54 crores was admittedly due from the promoters to the
association (pg. 371 of the complaint refers) 55. The authority observes that as per the deed of declaration, the
buildings were transferred to the association of allottees/RWA and the repair & maintenance was taken over by
the association but if there are defects either w.r.t the structure or workmanship, the same will have to be
rectified by the promoter on its own cost up to five years of obtaining occupation certificate. Further, a dispute
has also been raised that heavy amount has been spent by the erstwhile governing body of resident welfare
association for which the current governing body may investigate and if there is any criminality on the part of the
erstwhile governing body, the appropriate civil or criminal action may be taken by the current governing body of
the association. The rights and contention of the parties with regard to the validity of erstwhile governing body of
R-11 association are left open to be decided by the lawful authority may be such as the District Registrar of Firms
and Societies, Gurgaon or the Director Town and Country Planning, Haryana in whose office these documents
are filed by the promoter after a specified period of obtaining occupation certificate.56. The deed of declaration is
filed with the registrar and also with the competent authority i.e., Director, Town and Country Planning, Haryana.
The present association has been recognised by the District Registrar Firms and Societies, Gurgaon against the
same registration no. of the erstwhile association. Any determination regarding the erstwhile association being
lawful or not may be raised before the District Registrar Firms and Societies, Gurgaon. It also transpired during
proceedings that matter is also pending in the Civil Court as informed by the counsel for the complainant.
Accordingly, the complainant did not press for any action by the authority in this regard. The matter regarding
handing over maintenance of common areas to the erstwhile association which is alleged to not to be the
resident welfare association as per the Haryana Apartment Ownership Act, (as none of the governing body
member of the erstwhile association was an allottee but employees of the promoter company) may be raised by
the complainant before the Town and Country Planning to initiate action against the promoter/ license holder for
acting against the provisions of Haryana Apartment Ownership Act, Rules and Bye-laws made thereunder. VI To
order the respondents (R1 to R10), jointly and severally to refund the entire corpus of club membership fees
collected by them to R11, with a direction to keep the monies deposited with this authority in an interest-bearing
deposit for and on behalf of R11, until such time R11 is handed over to a duly elected body of resident
owners. 57. The complainant has alleged that R-8 (Quick Real Estate Pvt. Ltd.) is a shell company found by the
promoters of the IREO group and two of its employees are shareholders of 50% each in the said shell company. It
is alleged by the counsel for the complainant that R8 had demanded and recovered a sum of approximately of
Rs. 45 crores in the name of club membership fees. Further, it has been submitted that under the garb of
membership nearly four times the cost of construction and land has been recovered which is against the
condition of the license. However, in its audited financial statements the cost of land and cost of the construction
of the community buildings is shown as Rs. 10,50,00,000/-. Further, the complainant has annexed the audited
financial statement of R8 as annexure C-15 to support his claim.58. On this, the counsel for the respondent no. 1
to 7 submitted that the respondent no. 8 is a separate legal entity, and the promoter has no direct concern with
the same. The respondent no. 2 to 5 have been wrongly and illegally impleaded as such and they have no
personal role at all in the matter. Their names are liable to be deleted. Furthermore, the club membership charges
have been paid to respondent no. 8 as per rules and regulation of the club. It was optional for the complainant to
become a member or not. Moreover, the club forms part of the FAR of the promoter and the promoter had every
right to transfer the same as per law laid down by the apex court in DLF Vs. State of Haryana and others. All
developers have right to transfer the schools, dispensaries and community sites to third party and the
complainant have no locus standi to object.59. The counsel for the complainant on the other hand has argued
that as much as Rs. 7,08,000/- (Annexure R11-4 (Colly) pages 15-18) was collected from every resident owner
towards club membership by the shell company R8, which is nothing but an alter ego of the promoters
companies run by their own employees, Nitin Gupta ([email protected]) and Punit Monga
([email protected]) who are also shareholders of 50% each in the said company. This is a mass fraud
orchestrated on the resident owners by the promoters. The said company recovered a sum of approximately Rs.
45,00,00,000/- in the name of club membership fees. In its audited financial statements, the cost of land and the
cost of the construction of community buildings is Rs. 10,50,00,000/- (Page 433 para 30 and page 456 para 29).
The said company has failed to give an account of the monies collected till date (Annexure C13 at Page 394 of
complaint and Annexure R11-5 at page 19 of reply of R11 refers). Further, information furnished under Rule 26(2)
of rules framed under the Haryana Development & Regulation of Urban Areas Rules, 1976 shows that until
31.03.2020, R8, had paid R1 a sum of only Rs. 49,28,230/- (page 37 of additional documents filed by the
complainant on 07.02.2022 refer).60. Counsel for the complainant further submitted that the obligation cast upon
the promoter under section 11(4)(f), 17(2) read with section 2(n)(vii) and the law laid down by the Supreme Court
in DLF v Manmohan Lowe and Bikram Chatterjee & Ors Vs. Union of India & Others is to handover the
community buildings to the association of allottees. It is more so, when it has admittedly recovered more than 4
times the cost of land and construction for these buildings from the resident owners.He drew attention of the
authority towards para 123 in Bikram Chatterjee & Others v Union of India & Others (2019) 19 SCC 161 is
extracted below:“123. It is clear that common areas as provided under section 17 have to be ultimately handed
over to the Association of Allottees or the competent authority as the case may be. Thus, any sub-lease,
alienation or transfer effected by the promoter of the common areas as defined in RERA and otherwise reserved
under the plan shall be void and inoperative.”And further invited attention of the authority towards DLF Limited v
Manmohan Lowe & Ors (2014) 12 SCC 231 - para 58 of judgment reads thus:“Cost not on apartment owners58.
We have found that the colonizer is legally obliged under section 3(3)(iv)(a) of the Act to construct at his own
cost the community and commercial facilities stipulated therein and an agreement has to be entered into by the
colonizer with the DTCP under the Development Act by which the colonizer is prohibited by law from recovering
the cost of providing those facilities from the apartment owners”.Attention of the authority was also drawn
towards other relevant sections of the Haryana Development and Regulation of Urban Areas Act, 1975:“Section
3(3)(a)(iv) – to construct at its own cost, or get constructed by any other institution or individual at its cost,
schools, hospitals, community centres & other community buildings on the lands set apart for this
purpose……..”“LCIV-A clause 1c) – The owner shall at his own cost construct the primary-cum-nursery school,
community buildings/dispensary and first aid center on the land set apart for this purpose…..”“LCIV-A clause 1e)
– The owner shall not be allowed to recover any amount whatsoever on account of internal community buildings
from the flat holders/plot holders…..”61. The counsel for the complainant submitted that the unfair trade practice
perpetrated by the respondents in respect of the community buildings is depicted below: 62. The complainant
further submitted that what could not be done directly has been accomplished by the promoters indirectly as
shown below. This unfair trade practice has to be nipped in the bud. 63. He further contended that it is of import
to note that neither R8 nor its officers R9, and R10 have entered appearance despite notice to contest the claim
of the complainant or R11 association. The relief claimed qua the community buildings therefore, needs to be
allowed on this ground alone. While R1, R6, and R7 claim that the community buildings have been lawfully sold
for consideration but they have not annexed any document whatsoever to prove their claim.64. As the
respondent R8, R9 and R10 have failed to file reply and also to put in their appearance before the authority their
defence is struck off. The authority after considering the documents placed on record and after hearing both the
parties observers that there are three community sites in the subject project namely community building – I;
community building – II and community building – III which have been mentioned in the deed of declaration as
recreation facility/club-I, recreation facility/club-II and recreation facility/club-III having an area of 910.719
sq.mtrs.; 370.253sq.mtrs. and 385.655 sq.mtrs. respectively. The FAR for these community buildings have been
consumed out of the available /sanctioned FAR of the promoter. As gathered from the Directorate of Town and
Country Planning, Haryana, there is a requirement of providing one community building on achieving population
of 10 thousand. Below this population there is no requirement as per norms to provide community building. If a
builder is desires to provide community building, then he has to provide the same from which sanctioned FAR.
Here in this project also the promoter has used FAR in these buildings out of his sanctioned FAR and there is no
requirement to hand over the same to the resident welfare association. The common areas are defined in the
section 3(f) of the Haryana Apartment Ownership Act, 1983 which provides as under:3(f) “common areas and
facilities” unless otherwise provided in the declaration or lawful amendments thereto, means.-(1) the land on
which the building is located;(2) the foundations, columns, girders, beams, supports, main walls, roofs, halls,
corridors lobbies, stairs, stair ways, fire escapes and entrances and exits of the building;(3) the basements,
cellars, yards, gardens, parking area and storage spaces;(4) The premises for the lodging of janitors or persons
employed for management of the property;(5) installation of central services such as power, light, gas, hot and
cold water, heating, refrigeration, air conditioning and incinerating;(6) the elevators, tanks, pumps, motors, fans,
compressors, ducts and in general all apparatus and installations existing for common use; (7) such community
and commercial facilities as may be provided for in the declaration; and(8) all other parts of the property
necessary or convenient to its existing maintenance and safety or normally in common use;(emphasis
supplied)65. From the above it is quite clear that it is left to the promoter to declare the community and
commercial facilities in the declaration filed at the time of filing deed of declaration. Keeping in view the above
facts if the builder has not declared community facilities/ club in the declaration to be the common area then he
has no responsibility to transfer the same to the association of allottees. This matter was already settled in the
judgement of Hon’ble Supreme Court of India in Civil Appeal No. 10930 of 2013 (Arising out of Special Leave
Petition (Civil) No. 34275 of 2009, decided on 10.12.2013; MANU/SC/1255/2013) wherein it was held that 43. We
are also of the view that the High Court has committed an error in directing the DTCP to decide the objections of
the apartment owners with regard to the declaration made by the colonizer. The Competent Authority is defined
under section 3(i) of the Apartment Act. Section 11(2) provides for filing of declaration in the office of the
Competent Authority. Section 24A of the Act prescribes penalties and prosecution for failure to file a declaration
and Section 24 B permits the prosecution only with the sanction of the Competent Authority. In a given case if
the developer does not provide common areas of facilities like corridors, lobbies, staircases, lifts and fire escape
etc. the Competent Authority can look into the objections of the apartment owners but when statute has given a
discretion to the colonizer to provide or not to provide as per Section 3(f)(7) of the Apartment Act the facilities
referred to in Section 3(3)(a)(iv) of Development Act, in our view no objection could be raised by the apartment
owners and they cannot claim any undivided interest over those facilities except the right of user. In the instant
case the apartment owners have raised no grievance that they are being prevented from using the community
and commercial facilities referred to in Section 3(3)(a)(iv) of Regulation Act, but they cannot claim an undivided
interest or right of management over them(emphasis supplied)66. Although after coming into force of the Real
Estate (Regulation and Development) Act, 2016 in its entirety on 01.05.2017, the position has changed regarding
common areas but keeping in view the fact that the license for this project was granted much before coming into
force of the Real Estate (Regulation and Development) Act, 2016 hence the common areas in this project seems
to be governed by the provisions of the Haryana Development and Regulation of Urban Areas Act, 1975 and
Rules made there under and provisions of the Haryana Apartment Ownership Act, 1983. Even the state
government of Haryana vide memo no. Misc-2295/2021/1775 dated 25.01.2021 issued policy directions under
section 83(1) read with its proviso of the Act of 2016, regarding treatment of community and commercial facilities
falling in license colonies as under: B. Treatment of community and commercial facilities falling in licensed
colonies: In order to resolve the situation arising out of conflicting definition of common areas in the RERA Act,
2016, vis-à-vis the Haryana Apartment Ownership Act, 1983, for all intents and purposes, the common areas shall
be governed by the definition as provided under the special Act of 1983 ibid in force in the State since 28.09.1983
and Rules of 1987 framed thereunder. Any contradictory provision/ definition an existing in the RERA Act, 2016
shall be considered to be redundant for all facts and purposes. 67. Regarding the allegation of the counsel of the
complainant that cost of community building (club) has been recovered from the allottees in indirect manner for
something what cannot be done directly. He has alleged unfair trade practice by the promoter as mentioned in
paragraph 57, 58 and 59 above. The specific attention of the authority was drawn towards the judgement of
Hon’ble Supreme Court of India mentioned therein.68. The relevant portion of the judgement is reproduced
herein for ready reference:Cost not on Apartment owners:39. We have found that the Colonizer is legally obliged
under Section 3(3)(a)(iv) of the Act to construct at his own cost the community and commercial facilities
stipulated therein and an agreement has to be entered into by the Colonizer with the DTCP under the
Development Act by which the Colonizer is prohibited by law from recovering the cost of providing those
facilities from the apartment owners. The operative portion of the agreement executed by the colonizer reads as
follows:j) That only convenient shopping sufficient for requirement of the Group Housing will be allowed which
shall be approximate one shop per one thousand persons, covering a maximum area of 200 sq. ft. per shop.k)
That adequate educational, health, recreational and cultural amenities to the norms and standards provided in
the respective Development plan of the area shall be provided.The owner shall at his own cost construct the
primary-cum- nursery school, community building/dispensary and first aid centre on the land set apart for this
purpose, or if so desired by the Govt. shall transfer to the Govt. at any time free of cost land thus set apart for
primary cum nursery school, community building/dispensary and first aid centre, in which case the Govt. shall
be at liberty to transfer such land to any person or instruction including a local authority on such terms and
conditions as it may lay down.o) That the owner shall abide by the provisions of the Haryana Apartment and
Ownership Act, 1983.p) That the responsibility of the ownership of the common areas and facilities as well as
their management and maintenance shall continue to vest with the colonizer till such time the responsibility is
transferred to the owners of the dwelling units under the Haryana Apartment and Ownership Act, 1983.40.
Section 3(3)(a)(iv) of the Development Act read with the abovementioned clauses in the agreement would
indicate that ownership of the portion of the land set apart for the common areas and facilities referred to therein
vest with the Colonizer so also the obligation at his own cost to provide those facilities in the land set apart for
the said purpose. The Colonizer cannot recover cost of land or the amounts spent by him for providing those
facilities from the apartment owners. It is for the said reason that clause 7 of Section 3(f) of the Apartment Act
has not made it obligatory, on the part of the Colonizer to include the community and commercial facilities in the
declaration. If the colonizer includes the same within the declaration, then Section 6 of the Apartment Act will
kick in, consequently, the apartment owners would be entitled to the undivided interest in respect of the
community and commercial facilities provided therein without bearing the cost incurred by the colonizer in
purchasing the land and the cost of construction. In our view, the colonizer could not have included the
community and commercial facilities referred to in Section 3(3)(a)(iv) of the Development Act, because the same
is meant for the benefit of the entire colony, not merely the flat/apartment owners in one part of the colony since
they form part of the lay out plans duly approved, which takes in plotted area and the group housing societies
area as well.69. From the contents of the complaint regarding charging cost of the community facilities indirectly
as mentioned in the para no. 57, 58, and 59 above, the condition of license and further agreement in pursuance to
license granted under the Haryana Development and Regulation of Urban Areas Act, 1975 and the Rules made
thereunder and the Haryana Apartment Ownership Act, 1983 alleged to have been violated by the promoter, the
complainant is advised to approach the Director, Town and Country Planning Department, Haryana, Chandigarh
for necessary action in this regard. VII To order the respondents (R1 to R7) to keep deposited with this authority,
the entire RFMS deposit along with interest accrued thereon in an interest-bearing deposit for and on behalf of
R11, until such time R11 is handed over to a duly elected body of resident owners.70. The counsel for the
complaint also drew the attention of the authority to the fact that a principal amount of Rs. 18,32,45,758/- as of
31.03.2020 was admittedly collected by R11 (erstwhile body comprising of employees of the promoter) from all
resident owners towards RFMS (Annexure C9 at page 380 refers). The total saleable area in the project is
approximately 24,00,000 square feet so this deposit should ideally have been Rs. 24,00,00,000/- calculated at the
rate of Rs. 100/- per sqft. This entire corpus has been utilized/misappropriated by the promoters and their
employees who happened to be presiding over the affairs of the R11 association until 02.02.2022. It was
submitted by the counsel for the complainant that while criminal prosecution has already been initiated for the
offences under the IPC it is incumbent upon the promoters to restore this corpus to the R11 association and may
accordingly be ordered by the authority. The obligation of the promoter to handover the completed project to an
association of allottees under the Act also includes the obligation to restore the security deposit collected to run
the association. Handover with empty coffers is no handover. The counsel for the complainant has emphasized
that authority has powers under section 34(f) to enforce compliance of the provisions of the Act and those
powers must be exercised to further the ends of justice.71. The authority directs the inquiry officer/ auditing
firms/ fact finding team to find out as how much RFMS has been collected from the allottees and whether the
same has been used for the purpose for which it was collected and what amount of RFMS is transferrable now to
the residential welfare association.VIII To order the respondents (R1 to R10) to settle all their pending dues
towards their vendors and pay all dues for and on behalf of R11, until such time R11 is handed over to a duly
elected body of resident owners.72. The respondents are obligated to settle all there pending dues towards their
vendors. Although no specific details of pending dues have been given by the complainant except the dues
payable to R11 which will be settled by the inquiry officer/ auditing firm. The promoter is directed to clear the
dues within one month of receipt of inquiry report after acceptance by the authority. The attention of the
promoter is invited towards provision of section 11(4)(g) and (h) which is reproduced below and accordingly
directed to comply with the provision.11 Functions and duties of promoter: - (4) The promoter shall—(g) pay all
outgoings until he transfers the physical possession of the real estate project to the allottee or the associations
of allottees, as the case may be, which he has collected from the allottees, for the payment of outgoings
(including land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance
charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities
payable to competent authorities, banks and financial institutions, which are related to the project):Provided that
where any promoter fails to pay all or any of the outgoings collected by him from the allottees or any liability,
mortgage loan and interest thereon before transferring the real estate project to such allottees, or the association
of the allottees, as the case may be, the promoter shall continue to be liable, even after the transfer of the
property, to pay such outgoings and penal charges, if any, to the authority or person to whom they are payable
and be liable for the cost of any legal proceedings which may be taken therefor by such authority or person;(h)
after he executes an agreement for sale for any apartment, plot or building, as the case may be, not mortgage or
create a charge on such apartment, plot or building, as the case may be, and if any such mortgage or charge is
made or created then73. Accordingly, promoter is directed to settle all dues in view of provisions contained in
section 11(4)(g) and (h) and an affidavit to have settled the dues be submitted in the registry of the authority
within 3 months. 74. M/s Victory Valley Condominium Owner Welfare Association is the registered residential
welfare association of the IREO Victory Valley Condominium Owners. It was alleged by the counsel for the
complainant that the earlier governing body of the RWA was truly not representing the apartment owners in the
project as the same was constituting employees of the promoters and NOT ALLOTTEES within the meaning of
the Act.75. It was further submitted that vide order dated 06.10.2021, the District Registrar, Firms & Societies,
Gurugram appointed an administrator to conduct the membership drive and hold elections for the governing
body of the association. The counsel for the complainant further submitted that in the said order of District
Registrar, Firm & Societies, it was mentioned that the tenure of the erstwhile governing body expired in July,
2018 and the body, therefore, had no jurisdiction to run the affairs of the society. The operative part of the order
of District Registrar, Firms and Societies issued vide endorsement no. DR/DIC/GGM/1665 dated 06.10.2021 is
reproduced as under:"After detailed discussion/deliberation on the issues and as per records of this office it is
clear that Victory Valley Condominium Owners Welfare Association, IREO Victory Valley, Sector 67 Gurugram
was registered under the HRRS Act, 2012 in July, 2016 and the tenure of the governing body of association as per
bye-laws is two years which has been expired in year 2018 and now the governing body has no power to take any
decision. The counsel of management also agreed during the hearing for appointment of Administrator to
conduct the election of the governing body of association.In view of the above, in exercise the powers conferred
under sub section 10 of section 39 of HRRS Act, 2012 Sh. G.R. Khetarpal, Director, Ministry of Health & Family
Welfare, Govt. of India (Retd) R/o H.No. 846, Ground Floor, Sector 9, Urban Estate, Near Kataria Market, Gurugram
– 122001, is being appointed as Administrator to manage the day to day affair of association and to conduct the
fresh elections of Governing Body of Victory Valley Condominium Owners Welfare Association, IREO Victory
Valley, Sector 67, Gurugram strictly as per the provisions contained in the Bye-laws/HRRS Act/rules, 2012 and
SOP guidelines issued by the Govt/District Administration w.r.t. Covid-19, within a period of 3 months.The
Administrator is further directed that the election process must be completed following the process of
videography and the election be conducted strictly as per the provisions contained by the Bye Laws/HRRS
Act/Rules 2012 and guidelines issued w.r.t. Covid-19 by the Govt. and District Administration”.76. Furthermore,
the elections of the governing body have now been held on 02.02.2022 under the supervision of administrator
appointed by the District Registrar of Firms and Societies, Gurgaon and approval of the duly elected governing
body has been issued under section 33 and rule 19 of Societies Act, 2012 made thereunder vide memo no. 2022-
02-0000191 dated 04.02.2022. 77. The newly elected governing body has taken over the charge and is expected to
discharge its functions as per its bye-laws and will recover the dues as per the powers vest in it as per the bye-
laws provided in the Haryana Apartment Ownership Act, 1983 and the Haryana Apartment Ownership Rules,
1987. 78. The authority is of the considered view that it is a matter of fact that the promoter got the residential
welfare association constituted and the same was declared in the deed of declaration and the dues of the
association of allottees/RWA can be recovered under the Haryana Apartment Ownership Act and Haryana
Apartment Ownership Rules and byelaws provided therein or the association of allottees of which the present
complainant is also a member may pursue any other remedy, if available. If any bungling of funds has taken
place that civil and criminal remedy may be resorted to against the erstwhile members of the governing body of
the association.IX. To order the respondents (R1 to R7), jointly and severally, to refund to R11 the entire monies
paid by R11 to DHBVN in the form of penalties for its failure to install a permanent electricity connection for the
subject project and also excess monies paid by R11 on account of higher billing rate for a temporary connection,
with a direction to keep the monies deposited with this authority in an interest bearing deposit for and on behalf
of R11, until such time R11 is handed over to a duly elected body oof resident owners.79. The complainant has
alleged that R11 is paying a penalty of approximately Rs. 1 lac per month for supplying electricity using a
temporary connection. The total over a 3-year period would amount to Rs. 36 lacs. 80. In this regard, the
complainant has annexed a “Technical Due Diligence Report” for the subject project prepared by the M/s
Cushman & Wakefield as annexure C-4 (Page no. 83). Further, it is alleged that R11 is paying an additional sum of
approximately Rs. 5 lac per month in electricity bill as a result of higher cost of per unit of consumption on
temporary electricity connection, totalling to Rs. 1,80,00,000/-for the last 3 years. (Page no. 83).81. In response to
this, the counsel for the respondent no. 1 to 7 submitted that they have applied for electricity connection and for
which they are pursuing. The authority is of the view it is the responsibility of the respondent to provide
electricity connection and it is to be followed till permanent electricity connection is made available. The
responsibility shall have to be discharged by the promoter to make arrangement of electricity supply on the
same rate as are charged by the DHBVN and penalty/surcharge, cost of diesel for providing electricity through
generators on account of the temporary electricity connection (which is not sufficient to bear the load of the
society) etc., if any, shall be borne by the promoter.82. The complainant has not given any details as what refund
are to be made to M/s Victory Condominium Owners Welfare Association i.e., R11, the monies paid by R11 to
DHBVN in the form of penalties for its failure to install a permanent electricity connection for the subject project
and also excess monies paid by R11 on account of higher billing rate for a temporary connection. 83. The inquiry
officer/ auditing firm/ fact finding team may workout this amount. The respondent promoter version be also taken
into consideration. Regarding directions to keep the monies deposited with this authority in an interest bearing
deposit for and on behalf of R11, until such time R11 is handed over to a duly elected body of resident owners, it
is observed by the authority that newly elected body has taken over and the amount due on this account against
the promoter payable to R11 shall be paid by the promoter after the receipt of report and accepted by the
authority within 3 months. X To order the respondents (R1 to R7), jointly and severally, to refund to R11 the entire
monies spent on repairs and maintenance by R11 till date, with a direction to keep the monies deposited with this
authority in an interest-bearing deposit for and on behalf of R11, until such time R11 is handed over to a duly
elected body of resident owners.84. The complainant has not given any details in this regard accordingly the
inquiry officer/ auditing firm/ fact finding team may workout the quantum of any money on account of repairs and
maintenance by R11 till date if payable by the promoter. If any such amount is payable by the promoter same
shall be paid by the promoter within 3 months after receipt of the report and accepted by the authority.XI To order
the respondents (R1 to R7), jointly and severally, to refund to R11 the entire monies spent on purchasing water
from an external source, with a direction to keep the monies deposited with this authority in an interest-bearing
deposit for and on behalf of R11, until such time R11 is handed over to a duly elected body of resident owners.85.
The complainant has not given any details as on what basis the refund to R11 is admissible in respect of monies
spent on purchasing water from external source. No details have been given regarding the monies spent by R11
in this regard. The promoter is responsible to provide permanent water supply arrangement and same is
chargeable as per HUDA/ MCG rates. 86. The inquiry officer/ auditing firm/ fact finding team may workout this
amount. The respondent promoter version be also taken into consideration. Regarding directions to keep the
monies deposited with this authority in an interest bearing deposit for and on behalf of R11, until such time R11
is handed over to a duly elected body of resident owners, it is observed by the authority that newly elected body
has taken over and the amount due on this account if any against the promoter payable to R11 shall be paid by
the promoter after the receipt of report and accepted by the authority within 3 months.XII To order the
respondents (R1 to R7) to refund to R11 at least 50% of the CAM charges collected by R11 till date from the
resident owners, with a direction to keep the monies deposited with the Authority in an interest-bearing deposit
for and on behalf of R11, until such time R11 is handed over to a duly elected body of resident owners.87. The
complainant has not given any cogent reason for this relief as why to refund to R11 atleast fifty percent of the
CAM charges collected by R11 till date from the resident owners. Newly elected governing body has already
taken over the functioning of the M/s Victory Valley Condominium Owners Welfare Association and there is no
reason as to why to keep this monies deposited with the authority. XIII To order the respondents (R1 to R10) to
convey/formally handover all the common areas including the three community buildings to R11.88. The common
areas are defined in the section 3(f) of the Haryana Apartment Ownership Act, 1983 which provides as under:3(f)
“common areas and facilities” unless otherwise provided in the declaration or lawful amendments thereto,
means.-(1) the land on which the building is located;(2) the foundations, columns, girders, beams, supports,
main walls, roofs, halls, corridors lobbies, stairs, stair ways, fire escapes and entrances and exits of the building;
(3) the basements, cellars, yards, gardens, parking area and storage spaces;(4) The premises for the lodging of
janitors or persons employed for management of the property;(5) installation of central services such as power,
light, gas, hot and cold water, heating, refrigeration, air conditioning and incinerating;(6) the elevators, tanks,
pumps, motors, fans, compressors, ducts and in general all apparatus and installations existing for common
use; (7) such community and commercial facilities as may be provided for in the declaration; and(8) all other
parts of the property necessary or convenient to its existing maintenance and safety or normally in common use;
(emphasis supplied)89. The definition of common areas and facilities is dependent on the declaration or lawful
amendment thereto as per above definition given in the Apartment Ownership Act, 1983 which commences with
the words “common areas and facilities” unless otherwise provided in the declaration or lawful amendments
thereto. Accordingly, the common areas are declared in the deed of declaration filed by the promoter within
specified period after obtaining occupation certificate. The complainant has not specifically mentioned as which
common area as declared in the deed of declaration has not been handed over to respondent R11 i.e., M/s Victory
Valley Condominium Owners Welfare Association.90. Further as per 3(f)(7) it is provided that such community
and commercial facilities as may be provided for in the declaration are part of the common areas and facilities
and it is quite clear that it is left to the promoter to declare the community and commercial facilities in the
declaration filed at the time of filing deed of declaration. 91. Although after coming into force of the Real Estate
(Regulation and Development) Act, 2016 in its entirety on 01.05.2017, the position has changed regarding
common areas but keeping in view the fact that the license for this project was granted much before coming into
force of the Real Estate (Regulation and Development) Act, 2016 hence the common areas in this project seems
to be governed by the provisions of the Haryana Development and Regulation of Urban Areas Act, 1975 and
Rules made there under and provisions of the Haryana Apartment Ownership Act, 1983. Even the state
government of Haryana vide memo no. Misc-2295/2021/1775 dated 25.01.2021 issued policy directions under
section 83(1) read with its proviso of the Act of 2016, regarding treatment of community and commercial facilities
falling in license colonies as under: B. Treatment of community and commercial facilities falling in licensed
colonies: In order to resolve the situation arising out of conflicting definition of common areas in the RERA Act,
2016, vis-à-vis the Haryana Apartment Ownership Act, 1983, for all intents and purposes, the common areas shall
be governed by the definition as provided under the special Act of 1983 ibid in force in the State since 28.09.1983
and Rules of 1987 framed thereunder. Any contradictory provision/ definition an existing in the RERA Act, 2016
shall be considered to be redundant for all facts and purposes. 92. It was submitted by the complainant that there
are three community sites in the subject project namely community building – I; community building – II and
community building – III which have been mentioned in the deed of declaration as recreation facility/club-I,
recreation facility/club-II and recreation facility/club-III having an area of 910.719 sq.mtrs.; 370.253sq.mtrs. and
385.655 sq.mtrs. respectively. The FAR for these community buildings have been consumed out of the available
/sanctioned FAR of the promoter. The authority hereby make a reference of the matter to the Director, Town and
Country Planning Department, Haryana, Chandigarh for giving clarification in this regard whether community
building can be or shall be handed over to the association of allottees w.r.t the subject project, particularly in
light of fact where such community buildings have been constructed out of sanctioned FAR. 93. The complainant
has not given any details as to what common facilities transferrable to resident welfare association have not
been developed by the promoter and mentioned in the deed of declaration. 94. The authority hereby directs the
promoter to transfer the common areas and facilities as per the deed of declaration filed under the provisions of
the Haryana Apartment Ownership Act, 1983 and Rules and Bye-laws made thereunder. Within one month if some
or all of these have not been transferred earlier to the M/s Victory Valley Condominium Owners Welfare
Association.XIV To order the respondents (R1 to R7) to allocate at least 35 sqm of usable parking space for two
independent car parking as per the sanctioned plan. 95. As per the statement of account as on 15.11.2017 in
respect of the unit of complainant, parking charges of Rs. 7 Lac have been shown to have paid to the promoter.
The complainant in his complaint submitted that the complainant discovered to her shock and surprise that two
parking spaces allocated for the Apartment of the Complainant is also violative of the sanctioned plan, which
provides for 35 sqm of parking space in the basement. Under the Haryana Building Code this space should be
1.5 equivalent car space (ECS), i.e., 48 sqm, one ECS being 32 sqm for basement. Be that as it may, the
respondents have not even provided sanctioned 35 sqm of space in that the two parking spaces are one behind
the other in a constricted space between foundation pillars such one car cannot be removed unless the other is
removed first. Parking the car in the constricted space getting in and out of the car is a cumbersome experience
every time. 96. The authority after consulting department of town and country planning observes that to meet the
parking requirements, a general principal of making provision @ 1.5 times of main dwelling units is required to
be provided. Further for the purpose of calculations area norms for each ECS/ PCU have been prescribed
depending upon the location of purposed parking as the same is provided at basement level, stilt level or even at
open surface level with a further proviso that at least 50 percent parking spaces shall be covered parking spaces.
The norm for basement parking for 1 ECS is 35 sqm (at the time of approval of this project), 30 sqm for 1 ECS for
stilt parking and 25 sqm for 1 ECS parking at surface ground level. In the BBA there is no mention of area of car
parking. Only two car parking spaces have been alleged to have been allotted to the complainant. The
complainant failed to produced copy of the allotment letter/BBA issued to the original allottee where the size of
car parking space has been specified. From a similar builder buyer agreement in the same project, it is gathered
that number of parking spaces are mentioned not the size. 97. The equivalent car space i.e., 35 sqm for basement
is for the purpose of calculation of total parking requirements in the basement which include individual parking
spaces as well as general circulation space, margin for structural elements, and for manoeuvrability, turning
radius, etc. Individual parking space is never calculated on the basis of equivalent car space which is a concept
use for gross parking requirements taken collectively. Accordingly, the authority observes that there is no
ambiguity in allotment of parking space. The parking space allotted is an integral attachment with the unit and it
cannot be treated in isolation or sold separately. There is no violation of the sanctioned plan in allotment of
parking space to the complainant. Although the problem faced by the complainant is genuine and if some
solution could be worked out to the satisfaction of complainant it would be a welcome step. Keeping in view the
individual problem of the allottee the resident welfare association may accommodate him, and alternate parking
space may be allotted to him. 98. The complainant has not given any details regarding any variation in the
parking provided in the sanctioned plans and parkings actually provided in the basement and on surface.
Regarding saleability of parkings in the basement in the projects where licenses were issued before coming into
force of Act, 2016, the authority has already decided that the sale of such parkings shall be governed as per
provisions of builder buyer agreement. XV To penalize the respondents (R1 to R7) for offences committed by
them under section 59, 60, and 61 of the Act and earmark a percentage of the penalties as deemed fit by this
authority for the benefit of the subject project.99. This issue has been dealt in detail in relief no. 1 above.100. The
authority also observes that license no. 244 of 2007 dated 26.10.2007 issued in favour of M/s High Responsible
Realtors Pvt. Ltd. and license no. 103 of 2011 dated 07.12.2011 issued in favour of M/s KSS Properties Private
Limited and M/s High Responsible Realtors Pvt. Ltd. whereas the sales have been made/ builder buyers
agreement executed by M/s IREO Victory Valley Pvt. Ltd., Registered Office at 305, 3rd floor, Kanchan House,
Karampura Commercial Complex, New Delhi – 110015 and Corporate Office at IREO Campus, Sector – 59,
Gurgaon – 122011, Haryana (India) without any authorisation from Director Town and Country Planning or
without any legal capacity or without obtaining BIP permission. The matter be referred to Director Town and
Country Planning for information and further necessary action.101. The M/s MKPS & Associates, Chartered
Accountants, 804, 8th floor, Arunachal Building, 19 Barakhamba Road, New Delhi -110001 an empanelled firm to
carryout inquiry/ audit/ fact finding in the affairs of the promoter is appointed to make an inquiry in relation to
affairs of the promoter on the issues specified in these proceedings in various paras under section 35(1) of the
Act, 2016. The firm entrusted this task shall also audit the accounts of the project whether some diversions of
funds have taken place. The authority hereby directs the inquiry officer/auditing firm/ fact finding team to submit
its fact-finding report to the authority within two months. The remuneration of Rs. 5 Lacs is fixed for conducting
this inquiry payable to the firm assigned the work. 102. The report be examined by the planning branch and if
violations are noticed the matter be placed before the authority for initiating further action as per provisions of
law. Copy of the report may also be sent to the complainant and respondent no. 11 with a liberty to them to join
as party in the penal proceedings against the promoters. 103. Matter disposed of accordingly.

Haryana Real Estate Regulatory Authority, Gurugram

Uploaded by

Copyright:

Available Formats

Haryana Real Estate Regulatory Authority, Gurugram

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Haryana Real Estate Regulatory Authority, Gurugram

Uploaded by

Copyright:

Available Formats

6/19/24, 12:18 PM Haryana Real Estate Regulatory Authority, Gurugram

You might also like