Pranav B Prem

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The Haryana Real Estate Regulatory Authority (HRERA), Gurugram Bench, led by Member Ashok Sangwan, has directed Parsvnath Developers Ltd. to pay the agreed assured monthly returns, hand over possession of the commercial unit, execute the conveyance deed, and enter into a buyer’s agreement with the complainants, following its failure to deliver the unit and fulfill contractual obligations under a 2006 Memorandum of Understanding (MoU).

 

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Background

In 2006, the complainants — Ajai Pal Singh Gill, Prem Inder Kaur, and Harpreet Kaur — were allotted a 1,000 sq. ft. commercial unit in Parsvnath’s “IT Park Colony” project located in Sector 48, Gurugram, through an MoU. The total sale consideration was ₹15 lakh, of which ₹13.5 lakh was paid by the complainants. As per the MoU, Parsvnath was required to execute a buyer’s agreement within two months of the approval of the building plan and hand over possession within three years. However, neither possession was offered nor a buyer’s agreement executed. The MoU further stipulated that Parsvnath would pay an assured return of ₹26.09 per sq. ft. per month (₹26,090) from October 1, 2006, till the offer of possession, and ₹27.50 per sq. ft. per month (₹27,500) from the date of offer of possession until the unit was leased out. The builder, however, failed to pay these assured returns or deliver possession. The complainants approached HRERA seeking payment of assured returns, compensation for delay, possession of the unit, execution of conveyance deed, and penalties for non-registration of the project and non-execution of the buyer’s agreement.

 

Observations by HRERA

The Authority observed that the MoU executed in 2006 qualified as an agreement for sale under Section 2(c) of the Real Estate (Regulation and Development) Act, 2016. Therefore, the promoter and the allottees were bound by the terms of the MoU, making Parsvnath liable for its obligations. HRERA noted that the developer had received substantial payments from the complainants yet failed to complete construction, obtain an occupation certificate, or offer possession. The Authority emphasized that the developer’s obligation to pay the assured return under the MoU continued until possession was actually offered after obtaining the occupation or completion certificate.

 

Citing the Supreme Court’s decision in Fortune Infrastructure v. Trevor D’Lima (2018), the Authority held that three years from the date of the MoU (i.e., up to September 18, 2009) was a reasonable time for delivery. Since the developer failed to meet this timeline, it was in clear violation of its contractual and statutory duties. The Authority further clarified that the complainants were entitled to either the assured returns or delay possession charges under Section 18(1) of the RERA Act, whichever was higher. Given that the MoU specifically provided for assured returns, the complainants were entitled to receive the same at the agreed rate.

 

Directions Issued

Accordingly, HRERA directed Parsvnath Developers to:

 

• Pay assured returns of ₹26,090 per month (inclusive of TDS) from October 1, 2006, until the date of offer of possession after obtaining the occupation or completion certificate, after adjusting any amount already paid.

• Pay further assured returns of ₹27.50 per sq. ft. per month from the date of receipt of balance sale consideration after obtaining the occupation or completion certificate, until the space is leased out.

• Settle arrears of assured returns within 90 days of the order; failing which, the amount shall carry interest at 8.85% per annum until realization.

• Execute a registered buyer’s agreement within 90 days from the date of the order.

• Hand over possession and execute the conveyance deed within three months of obtaining the occupation certificate.

• Avoid charging any additional amount not covered by the MoU.

• The planning branch of HRERA was also directed to place the pending suo motu proceedings regarding non-registration of the project before the Authority within 30 days.

 

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With these directions, the Haryana RERA disposed of the complaint, holding that Parsvnath Developers had failed to meet its obligations under the MoU and the provisions of the RERA Act. The builder is now bound to compensate the complainants through assured monthly returns and ensure timely conveyance and possession once the occupation certificate is obtained.

 

Counsel for Complainant: Adv. Harshit Goyal

Counsel for Respondent: Adv. Nitish H Gupta

 

 

Cause Title: Ajai Pal Singh Gill & Others Versus M/s Parsvnath Developers Ltd.

Case No: Complain No. 2340 of 2024

Coram: Shri. Ashok Sangwan [Member]