Temporary Occupancy Certificate Cannot Justify Offering Possession: UP RERA Appellate Tribunal Orders Refund To Homebuyer
The allotee had clearly sought a refund due to the project delay, but possession was ordered based on a temporary occupancy certificate.
The Uttar Pradesh Real Estate Appellate Tribunal has allowed an appeal filed by homebuyer against Strategic Developers Private Limited, setting aside a 2020 order of the UP RERA Authority that had directed possession instead of refund holding that a ‘Temporary Occupancy Certificate’ has no legal sanctity in the eyes of law for the purpose of offering possession to an allottee under the Real Estate (Regulation and Development) Act, 2016.
The two-member Bench of Justice Suneet Kumar (Chairman) and Rameshwar Singh (Administrative Member) held that the regulatory authority committed a serious legal error by granting relief beyond the pleadings. It said, “Section 18 of RERA Act, 2016 provides for return of amount and compensation. If a promoter fails to complete or is unable to give possession of the unit in accordance with the terms of the agreement for sale, duly completed by the dates specified therein, the promoter ‘shall be liable on demand’ to return the amount to the allottee who wishes to withdraw from the project with prescribed interest. ”
It added, “In other words, allottee has an absolute right to withdraw from a delayed project and claim refund of his deposit and interest thereon including compensation. However, in the event, the project is complete, at that stage if the allottee desires to withdraw from the project, appellant in that event seeks termination of the agreement/unit. In the circumstances, appellant shall be entitled to refund of his deposit subject to deductions towards earnest money as per terms of the agreement.”
Advocate S. K. Sharma appeared for the Appellant, and Advocate Rohit Jaiswal appeared for the Respondent.
The Tribunal noted that the possession was contractually due by March 2017, but the builder failed to complete and deliver the flat, prompting the allottee to seek refund. The allotee had clearly sought a refund due to the project delay, but possession was ordered based on a temporary occupancy certificate. It held, “In the given facts, temporary occupation of the building cannot be equated with Occupancy Certificate under the Building Regulations framed by GNIDA. As per the definition of Occupancy Certificate under Section 2(zf) of Act, 2016, includes any certificate, by whatever name called, issued by the competent authority permitting occupation of a building or the part thereof, as per local laws.”
The Tribunal held that a temporary occupation certificate cannot be treated as a valid occupancy certificate under the RERA Act and local building regulations. It reaffirmed that, “The right to withdraw from a delayed project is unconditional and unqualified right conferred upon the allottee.”
Allowing the appeal, the tribunal quashed the impugned order and directed, “it is evident that the Regulatory Authority committed an error and serious illegality in granting relief of possession on the strength of invalid temporary occupation certificate of an incomplete building issued for a temporary period. The appellant, therefore, would be entitled to refund of his deposit alongwith interest thereon at MCLR+1% till the date of payment.”
Cause Title: Vijendra Singh Raghav v. Strategic Developers Pvt. Ltd.
Appearance:
Appellant: Advocates S. K. Sharma, Amit Yadav
Respondent: Advocates Rohit Jaiswal, Jayant Gupta