India: Haryana RERA ("HRERA") Authority, Panchkula Orders Refund Of The Amounts Paid By Homebuyers As Alternative Remedy

On November 19, 2019, in a combined hearing for 44 complaints filed by the homebuyers against Ferrous Infrastructure Private Limited, for the group housing project that was being originally developed by Maximal Infrastructure Private Limited (erstwhile 'Triveni Ferrous Infrastructure Private Limited'), Ferrous Alloys Forging Private Limited and Sumit Mittal (together the "Licensee") for construction of a Group Housing Colony over an area measuring 48.038 acre in Sector 89, Faridabad under the provisions of the Haryana Development and Regulation of Urban Areas Act, 1975 and its Rules, 1976.

The Licencee had transferred development and marketing rights to the following five different companies: -

- Triveni Infrastructure Development Company Private Limited (TIDCO), (currently under liquidation)

- Ferrous Infrastructure Private Limited (FIPL)

- Pal Infrastructure & Developers Private Limited

- Heritage Cottages Private Limited

- ORS Infrastructure Private Limited

However, the said transfer was made without the prior approval of Town & Country Planning Department.

The HRERA Authority, while adjudicating on the issue of grant of possession to the complainants noted that since the completion of project within a feasible time was non-foreseeable, owing to various regulatory non-compliances, dues to the State Government and pending construction works, in the interest of justice, relief of refund of the money already paid by the homebuyers be given even though the prayer clause of the complaints do not seek the same.

The HRERA in its November 19, 2019 order further noted that since the resolution laid in its October 01, 2019 order will take substantial time and there are no set timelines for completion of the project, it is not in a position to grant the sought relief of possession of apartments within a specified time frame. Therefore, alternate reasonable relief becomes admissible i.e. refund of amounts already paid by the complainants to Ferrous Infrastructure Private Limited along with interest calculated in accordance with Rule 15 of the HRERA Rules, even though the same was not sought by any of the complainants.

The HRERA Authority, while directing the above, referred to the order dated October 01, 2019, wherein 208 complaints were received against the five developers (mentioned hereinabove) of the licensed project. The HRERA Authority held that the only way forward to resolution of the complex dispute amongst the five developers is to formally treat them as five different colonies and directed the Town & Country Planning Department to recognize the same and issue revised approvals and licenses accordingly. The HRERA Authority had also directed that beneficial rights should be transferred to each developer for their respective zones and the entitlement rights and liabilities of each zone be determined separately and independently. Once, the same is granted by the Town & Country Planning Department, each of the developer company should submit their plan for development of the colonies after duly recognising the work already carried out and the project be then registered with RERA.

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