Haryana Apartment Ownership Act,_Turmoil over common areas in Condominium

Demolition of allegedly unauthorised shops put up by the residents' association in Heritage City, Gurgaon cloaks the more important issue: who should own common areas in group housing complexes in the state? This is a matter of contention between the builders and many of the housing societies in Gurgaon. The government's response to all such disputes is either to brush them under the carpet, or side with the developers while taking full advantage of the weaknesses in the legislation.

The Haryana Apartment Ownership Act (HAOA) was passed to give the residents of housing complexes in the state the right and the wherewithal to administer the colonies through their elected representatives. The spirit of the Act requires that once the area has been handed over to the owners' body, all common areas and facilities, too, should be transferred to them. That the law says as well. But in a clever twist of legalese it leaves it to the builder to declare in the declaration he files under the Act what constitutes 'common areas'.

In the broad scheme of the HAOA, only three kinds of properties are mentioned as components of any gated colony: general common areas, limited common areas and private residences. Whatever facilities - be it shops, club, school or any other - which the builders try to hold on to, or sell or lease to private parties, would be classified as private commercial properties and there is no provision for them in the law. This is a point made by the Punjab and Haryana High Court in their judgment in the Silver Oaks case.

That verdict was overturned by the Supreme Court in 2013. The apex court had two important observations to make. One, that the licensed area in which the group housing complex known as Silver Oaks is located also has plotted areas of DLF I in it, hence the residential society of this complex alone cannot take control of all common facilities. The court said: "The colonizer could not have included the community and commercial facilities (in the declaration) because the same is meant for the benefit of the entire colony, which takes in plotted area and the group housing society's area as well." Logically it means that residents of plotted areas outside too can avail of the common facilities in the gated complex! In any case this situation is a rarity.

Second, the court said that the statute has given a discretion to the colonizer to include whatever facilities he desired in the common list because they were built by him 'at his own cost' so he could do what he liked with them. If this means that the cost of constructing these facilities was not added to the selling price of the apartments, not enough evidence was produced before the court to establish this. And even if it is correct in accounting terms, it is contrary to the spirit of the law.

Unfortunately, the building sector is not known for transparency of its accounts. But the government can still set up a mechanism by which the correct cost of building these structures can be ascertained and the apartment owners' associations given the option of buying them off. And for the future, the law must be amended unequivocally to give societies of apartment owners full control over all facilities. If that means that developers will load the cost of constructing them on the buyers (which they may have done in the past, too, but keep this fact cleverly hidden), so be it. At least this matter will be removed from the list of contentious issues that bedevil the realty sector.

https://m.timesofindia.com/city/gurgaon/turmoil-over-common-areas-in-condominium/articleshow/61921715.cms

NCDRC_deemed to have condoned the default

NCDRC has recently delivered judgment dated 21-11-2017 in CC No. 1730 OF 2016 tilted as PRAVEEN @ PARVEEN KUMAR JAIN & ANR v/s  EARTH INFRASTRUCTURES LTD. & ANR by adopting “deemed condoned theory” against the builder instead of customer. Below is the relevant Para of the judgement:  

“5.   As regards, the alleged default on the part of the complainant, it would be seen form the payment plan agreed between the parties that 65% of the BSP was required to be paid by the start of 4^th floor work.  The (viii) installment was payable at the start of the 7^th floor work, (ix) installment was payable at the start of 10^th floor (x) installment was payable at the start of 12^th floor work.  The complainant made last payment in July, 2015, as would be evident from the Sales Customer Ledger of the opposite party.  He paid more than 65% of the Basic Sale Price by that date.  There is no evidence or even an allegation that 7^th floor work had already started by the time last payment was made by the complainant.  The written version filed by the opposite party does not show when the 7^th floor work, 10^th floor work and 12^th floor work started.  It is also not known whether the aforesaid work started before filing of this complaint or after filing of this complaint.  In the absence of the aforesaid particulars, and the proof thereof, the complainant cannot be said to be a defaulter in payment of viii, ix and x installments.  In any case, if the complainant was in default in making payment, the opposite party ought to have cancelled his installment and could even have forfeit the Earnest Money as per the terms and conditions of the Buyers agreement.  That having not been done, the opposite party is deemed to have condoned the aforesaid default.  Consequently, the relief sought by the complainant cannot be denied on account of the aforesaid alleged defaults.”

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

CONSUMER CASE NO. 1730 OF 2016

1. PRAVEEN @ PARVEEN KUMAR JAIN & ANR. E-184, 2ND FLOOR, NARAINA VIHAR, OPPOSITE GYAN MANDIR PUBLIC SCHOOL, NEW DELHI-110028 2. . . .	...........Complainant(s)
Versus
1. EARTH INFRASTRUCTURES LTD. & ANR. (THROUGH ITS MD) B-100, NARAINA INDUSTRIAL AREA, PHASE-1, DELHI-110028 2. EARTH INFRASTRUCTURES LTD. EARTH COPIA, SECTOR 112, GURGAON, HARYANA.	...........Opp.Party(s)

BEFORE:
	HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER

For the Complainant :

Ms. Kajal Chandra, Advocate Ms. Prerna Chopra, Advocate Mr. Viren Kapur, Advocate

For the Opp.Party :

Mr. Himanshu, Advocate for Mr. Abhay Kumar, Advocate

Dated : 21 Nov 2017

ORDER
JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)      The complainant booked a residential flat with the opposite party in a project namely ‘Earth Copia’, which the opposite party was to develop in Sector-112 of Gurgaon.  The opposite party allotted residential Unit No.404 in Tower G having super area of 1835 sq. ft. to him for a consideration of Rs.81,78,580/-.  The complainants having opted for a construction linked payment plan, the aforesaid amount was payable in the following manner:       At the time of booking : 10% of the BSP (ii)      Within 45 days from booking : 15% of the BSP Within 120 days from booking : 10% of the BSP plus 50% of   the EDC and IDC At start of Excavation Work : 10% of the BSP At start of Basement Slab : 10% of the BSP plus 50% of the EDC and IDC At start of 2nd floor work : 5% of the BSP At start of 04th floor work : 5% of the BSP At start of 07th floor work : 5% of the BSP plus 50% of  3rd and 4th floor PLC plus 50% of Park Facing PLC plus 50% of road / corner facing PLC At start of 10th floor work : 5% of the BSP At start 12th floor work: 5% of BSP At the start of 14th Floor work : 5% of the BSP At start of Internal Plaster : 5% of the BSP plus 50% of 3rd and 4th floor PLC plus 50% of Park Facing PLC plus 50% of road / corner facing PLC On laying of flooring : 5% of the BSP On offer of Possession : 5% plus 100% of ECC plus 100% of IFMS plus 100% of EEC and FFC plus 100% of Power back-up charges”. 2.      The complainant has paid a sum of Rs.58,74,142.00 to the opposite party in installments, the last payment having been made on 25.7.2015. The possession as per the buyers agreement dated 31.05.2012 was to be delivered within three years from the execution of the said agreement, though the opposite party was allowed a grace period of six months.  Thus, including the grace period, the possession ought to have been delivered by 30.11.2015.  The grievance of the complainant is that despite they having paid a sum of Rs.58,74,142.00 to the opposite party, the construction of the flat allotted to him is not even complete.  The complainants are therefore before this Commission, seeking refund of the entire amount paid along with compensation the form of simple of interest. 3.      The complaint has been resisted by the opposite party which has taken a preliminary objection that this Commission does not have the pecuniary jurisdiction to entertain the complaint.  It is also alleged that the complainant has defaulted in making payment in terms of the payment plan agreed by him since 80% of the sale consideration has become due from him.  It is further stated in the reply to the complaint that the construction has already reached upto 12th floor.  It is however, not disputed that the construction of the flat allotted to the complainant is not complete, though the learned counsel for the opposite party states that the construction is likely to be completed by April, 2018.  He further states that the Directors of the opposite party are already in custody. 4.      In terms of Section 21 of the Consumer Protection Act, this Commission possesses the requisite pecuniary jurisdiction to entertain the complaint, where the value of the goods or services, as the case may, and the compensation, if any, claimed by the complainants exceeds Rupees one crore.  As held by a Three-Members Bench of this Commission in Ambrish Kumar Shukla Vs. Ferrous Infrastructure Pvt. Ltd. CC No. 97 of 2016, decided on 07.10.2016, the value of the services in such cases means, the aggregate consideration agreed to be paid by the buyer to the builder.  Therefore, the agreed sale consideration in this case, being Rs.81,78,580/-, the aforesaid would be value of the services hired or availed by the complainant.  If compensation claimed by the complainant is added to the aforesaid amount, the aggregate comes to more than Rupees one crore.  This Commission therefore possesses the requisite pecuniary jurisdiction to entertain the complaint. 5.      As regards, the alleged default on the part of the complainant, it would be seen form the payment plan agreed between the parties that 65% of the BSP was required to be paid by the start of 4th floor work.  The (viii) installment was payable at the start of the 7th floor work, (ix) installment was payable at the start of 10th floor (x) installment was payable at the start of 12th floor work.  The complainant made last payment in July, 2015, as would be evident from the Sales Customer Ledger of the opposite party.  He paid more than 65% of the Basic Sale Price by that date.  There is no evidence or even an allegation that 7th floor work had already started by the time last payment was made by the complainant.  The written version filed by the opposite party does not show when the 7th floor work, 10th floor work and 12th floor work started.  It is also not known whether the aforesaid work started before filing of this complaint or after filing of this complaint.  In the absence of the aforesaid particulars, and the proof thereof, the complainant cannot be said to be a defaulter in payment of viii, ix and x installments.  In any case, if the complainant was in default in making payment, the opposite party ought to have cancelled his installment and could even have forfeit the Earnest Money as per the terms and conditions of the Buyers agreement.  That having not been done, the opposite party is deemed to have condoned the aforesaid default.  Consequently, the relief sought by the complainant cannot be denied on account of the aforesaid alleged defaults. 6.      It is an admitted position that the construction of the flat allotted to the complainant is not complete even till date, though more than two years have already expired from the time period stipulated for completing the said construction.  The complainant therefore cannot be made to wait indefinitely for the possession of the flat allotted to him.  This is more so, considering the situation where even the Directors of the builder company are said to be in judicial custody.  The complainants therefore are entitled to refund of the entire amount paid by them along with appropriate compensation. 7.      The learned counsel for the complainants states on instructions from one of the complainants, who is present in the Court, that though the complainants have claimed compensation in the form of simple interest @ 24% per annum, they in order to avoid further litigation in the matter are restricting their claim to refund of the principal amount paid by them along with compensation in the form interest @ 10% per annum and the cost of litigation. 8.      The complaint is therefore disposed of with the following directions: (i)      The opposite party shall refund the entire principal amount of Rs.58,74,142.00 received from the complainant along with compensation in the form of simple interest @ 10% per annum from the date of each payment till the date on which the entire amount long with compensation in the form of simple interest is refunded. (ii)      The opposite party shall pay Rs.25,000/- as the cost of litigation to the complainants (iii)     The payment in terms of this order shall be made within three months from today.

......................J

V.K. JAIN

PRESIDING MEMBER