Karnataka High Court

M/S. Adarsh Developers vs Smt. Suman Rupanagudi on 30 June, 2021

Author: Alok Aradhe Chandangoudar

                             1



 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 30TH DAY OF JUNE 2021

                         PRESENT

       THE HON'BLE MR. JUSTICE ALOK ARADHE

                           AND

 THE HON'BLE MR.JUSTICE HEMANT CHANDANGOUDAR

             R.E.R.A. APPEAL NO.1 OF 2021

BETWEEN:

M/S. ADARSH DEVELOPERS
A PARTNERSHIP FIRM
REPRESENTED BY ITS PARTNER
MR. B.M. KARUNESH
HAVING ITS REGISTERED OFFICE AT
NO.10, VITTAL MALLYA ROAD
BENGALURU 560001.
                                              ... APPELLANT
(BY SRI. V.B. SHIVA KUMAR, ADV.)

AND:

1.     SMT. SUMAN RUPANAGUDI
       W/O SRI VENKAPPA GUJJANUDU
       MAJOR BY AGE
       RESIDING AT SHOBHA ASTER FLATS
       NO.1072, 6TH CROSS
       VIJAYA BANK COLONY
       BILEKALLI, BENGALURU 560076
       THROUGH HER CONSTITUTED ATTORNEY
       MR. G V SUBBANNA.

2.     REAL ESTATE REGULATORY AUTHORITY
       KARNATAKA
       1ST /2ND FLOOR, SILVER JUBILEE BLOCK
       UNITY BUILDING, CSI COMPOUND
                                 2



       3RD CROSS, MISSION ROAD
       BENGALURU 560027.

                                               ... RESPONDENTS
(BY SRI. PRAMOD NAIR, ADV., FOR R1)
                            ---

     THIS RERA APPEAL IS FILED UNDER SECTION 58 OF REAL
ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016, PRAYING
TO SET ASIDE THE ORDER DATED 29.01.2021 PASSED BY THE
KARNATAKA REAL ESTATE APPELLATE TRIBUNAL, BENGALURU IN
APPEAL (K-REAT) NO.256/2020. CALL FOR THE RECORDS OF THE
COURT BELOW. ALLOW THE APPEAL.

     THIS R.E.R.A. APPEAL COMING ON FOR ORDERS, THIS DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:

                          JUDGMENT

This appeal under Section 58 of the Real Estate

(Regulation and Development) Act, 2016 (hereinafter

referred to as 'the Act' for short) has been filed against the

order dated 29.01.2021 passed by the Karnataka Real Estate

Appellate Tribunal.

2. Facts leading to filing of this appeal briefly stated are

that the appellant is a builder. The respondent No.1 has

entered into an agreement for sale for purchase of a

residential apartment on 03.09.2014. Under the terms and

conditions of the agreement, it was agreed that the project

shall be completed within 36 months and a grace period of 3

months was further provided. The appellant by

communication dated 27.04.2017 informed the Respondent

that the completion in the time schedule of the project had

undergone a revision. Thereafter, a supplementary

agreement dated 27.04.2017 was executed between the

parties under which the appellant agreed to handover the

possession of the apartment by the end of December 2018.

The Respondent and her husband visited the construction

premises sometime in May 2018 in order to ascertain the

progress of construction, where the Respondent found out

that the project might require 3-4 years for completion. She,

therefore, by a communication dated 24.05.2018, sought

cancellation of her allotment. Accordingly, a cancellation

deed was executed on 24.05.2019 and a sum of

Rs.1,47,83,062/- was paid to the respondent No.1 vide

Cheques dated 30.05.2019 and 30.06.2019. The respondent

No.1 received the aforesaid amount under protest. The

respondent No.1, thereafter filed a complaint on 07.11.2019

which was dismissed by the Real Estate Appellate Tribunal by

order dated 31.01.2020. The respondent No.1 filed an

appeal against the aforesaid order. The Appellate Tribunal,

by judgment dated 29.01.2021, inter alia, held that the

respondent No.1 is entitled to compensation and interest

under Section 18(1) of the Act. The Tribunal placed reliance

on the decision of the Supreme Court in 'PIONEER URBAN

LAND AND INFRASTRUCTURE LTD. Vs. GOVINDAN

RAGHAVAN' (2019) 5 SCC 725. The Tribunal remitted the

matter to the Real Estate Appellate Authority for computation

of interest and compensation. In the aforesaid factual

background, this appeal has been filed.

3. Learned counsel for the appellant submitted that the

Tribunal ought to have appreciated that after execution of

the cancellation deed dated 24.05.2019 and after having

received the amount, the respondent No.1 was not entitled

to interest and compensation. It is further submitted that no

contractual obligation exists between the parties inter se. It

is also submitted that there is no evidence on record to

suggest fraud and coercion and deed of cancellation was

executed voluntarily by respondent No.1 which was acted

upon.

4. On the other hand, learned counsel for the

respondent No.1 has taken us through the deed of

cancellation and has submitted that the respondent No.1 has

not waived her right for grant of compensation and it is well

settled in law that a right conferred by the statute has to be

specifically waived.

5. We have considered the submissions made on both

sides and have perused the record. The relevant clauses of

the deed of cancellation read as under:

"4. The Second Party hereby declares that they shall not have any manner of right, title or interest over the Schedule B Property and further declare and assure the First Party herein that they shall not make any manner of claims of whatsoever nature in respect of the Schedule B Property and the First Party herein shall be at liberty to negotiate and enter into fresh Agreement to Sell with any one of its choices, at whatever rate, it deems fit. The parties herein, hereby confirm that they have mutually agreed and relieved of their respective rights and liabilities arising out of the aforesaid Agreement to Sell.

7. The Second Party declare and confirm that they shall henceforth have no right, title or interest or claim whatsoever in respect of the Schedule A Property, nor shall they make any such claim before any authority / court hereafter. The Second Party further declares that the First Party is now at full liberty and within their absolute right and discretion to deal with and / or dispose off the Schedule B Property, to anyone else as they may deem fit, subject to clearance of all the cheques stated above, without any obstruction, objection or claim from the Second Party of whatsoever nature."

Thus, it is evident that the right, title or interest in

respect of Schedule A property has been relinquished by

respondent No.1 under the agreement.

6. At this stage, it is apposite to take note of Section

18(1) of the Act which is reproduced below for the facility of

reference:

"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."

Thus, from perusal of the relevant extract of Section

18(1) of the Act, it is evident that the respondent No.1 has a

statutory right to seek interest as well as compensation in

case of delay of project. The Respondent No.1 had paid the

amount to the builder in installments between the period

from 14.08.2014 to 31.01.2018. The aforesaid money was

with the builder which was subsequently refunded vide

cheques dated 30.5.2019 and 30.6.2019 without any

interest. The Respondent is, therefore, entitled to interest

and compensation on the aforesaid amount in view of Section

18 of the Act. The aforesaid obligation on the part of the

appellant is not based on the provisions of contract between