India: RERA Dossier: Volume 4: October 2022 - March 2023

INTRODUCTION

As the pages of time turn and the landscape of real estate continues its dynamic evolution, Volume 4 stands as a testament, embracing a thoughtfully curated compendium of significant judgments and orders, spanning the duration from October 2022 to March 2023. Within these decisions lie the imprints of the RERA authorities entrusted with the responsibility of interpreting the RERA Act, shaping the contours of our legal landscape.

Amidst the interplay of market dynamics, regulatory frameworks, and the shifting aspirations of consumers, a panorama takes shape, demanding our unswerving attention. This Dossier provides pivotal judicial interpretations on issues like allottee's entitlement to claim interest under Section 18 of RERA post-possession, purchasers' eligibility for refunds in cases of delayed possession despite obtaining the Occupation Certificate, considerations while determining possession dates, the ramifications of authority-extended project completion on claims of delayed possession etc. This Dossier also encompasses legal position developed in this period on important issues like non-negotiable clauses within agreements, Deregistration of Projects, Additional conditions for project extensions, etc.

We sincerely wish that you discover this edition of the Dossier to be both captivating and enlightening. Your feedback and suggestions on this Dossier are highly valued, and we eagerly anticipate hearing from our readers.

Stay tuned for the next Volume!

IMPORTANT JUDGMENTS PASSED BY REAL ESTATE REGULATORY AUTHORITIES AND TRIBUNALS

MahaRERA/MahaREAT

Allottee can claim interest under Section 18 of RERA even after accepting possession.

Ashley Neil Sarrao Vs. Propel Developers Pvt. Ltd.

Ashley Sarrao, ("Allottee/Complainant"), had booked a flat with Propel Developers Pvt. Ltd., ("Promoter/Respondent").

However, Promoter failed to hand over possession of the flat by December 2015 as agreed in the registered agreement. In July 2018, Allottee was called upon by the Promoter to take possession of the subject flat. However, the Promoter informed the Allottee about an increase in the carpet area and demanded additional consideration. The Promoter ignored the queries of the Appellant in regard to the additional area and at the same time sent reminders for payment towards purported extra area. Being disgruntled, Allottee filed a complaint before MahaRERA seeking possession and compensation for the delay in handing over possession under Section 18 of the RERA Act. The Promoter remonstrated the claim of Allottee contending that the Complainant was offered possession of the subject flat on July 11, 2018 after receipt of OC on July 7, 2018. The complaint was filed after possession was offered by the Promoter. MahaRERA denied relief of interest to Allottee for the reasons that default for delay in possession continues only until promoter is unable to give possession and once OC is obtained and possession is offered, Section 18 of RERA Act would not apply.

Dissatisfied with this decision, the Allottee filed an appeal before MahaREAT. The Allottee argued that due to the breach of the agreement by the Promoter, Allottee did not waive his statutory rights, even though possession was eventually handed over with a delay. The Promoter claimed that the Allottee was made aware of the revised possession dates and also his right to ask for refund. However, the Complainant having knowledge of his rights, knowingly accepted the benefits of the contract, and therefore, he is estopped from denying the binding effect of such contract.

Held: The MahaREAT held that the Allottee could still claim interest under Section 18 of RERA Act even after accepting possession, as the right to claim relief is not abandoned unless expressly waived.

You can view the order here.

Purchasers can claim refund if promoter fails to handover possession by agreed date despite OC being received by promoter.

MahaREAT

Mr. Bijon Dhirendra Talukdar & Mrs. Shanta Talukdar Vs. Dhruva Woolen Mills Pvt. Ltd.

Mr. Bijon Dhirendra Talukdar and Mrs. Shanta Talukdar ("Appellants / Allottees"), booked a flat in project "Eirene" undertaken by Dhruva Woolen Mills Pvt. Ltd., ("Respondent/ Promoter"). Though the e-mail communication dated April 15, 2019 exchanged between the parties indicated date of possession as June 2020 including a six months' grace period, no such date was mentioned in the letter of allotment issued on June 19, 2019.

Since the Promoter could not handover possession by June 2020, the Allottees served 2 separate notices to the Promoter to handover possession failing which to refund the monies paid with interest. Thereafter, the Promoter informed the Allottees about receipt of OC dated February 9, 2021. As the demand for refund with interest was declined by the Promoter, Allottees filed complaint seeking refund of the amount under Section 18 of RERA Act for delay in possession. The MahaRERA dismissed the complaint on the ground that, since the project was completed with OC on the day of filing the complaint, no case of violation of Section 18 of the RERA Act was made out on the date of filing the complaint.

Being aggrieved by the order, Appellants filed an appeal before the MahaREAT interalia on the grounds that various affidavits filed by the Promoter in the complaint and in the appeal, the Promoter had clearly stated that the date promised to the Allottees for possession was undisputedly and admittedly December 2019. Once the agreed date of possession was expired, the Allottees were entitled to enforce their right under Section 18(1) of the RERA Act notwithstanding, any purported grace period. Accordingly, once the Promoter had failed to handover possession by December 2019 the Allottees had unqualified right to seek refund of the amount paid with interest at the prescribed rate. Even assuming that the Promoter was entitled to a six months' grace period, the Promoter was liable to handover possession by June 2020. However, the OC was obtained only on February 9, 2021 i.e. almost 7 months after June 2020.

Held: MahaREAT observed that in case of failure to give possession within stipulated time period, regardless of unforeseen events or stay order of the court/tribunal, which were in either way not attributable to the Allottees, the Promoter was liable to refund the amount on demand with interest. With regards to Promoter's contention that once the OC was obtained or possession was offered, the Section 18 would no longer be applicable, MahaREAT observed that the said contention has consistently been ruled to be contradictory to the letter and spirit of the RERA Act. MahaREAT further held that it is the right of the Allottees to take refund of their own amount as provided under Section 18, once the Promoter fails to handover possession by the agreed date and directed the Promoter to refund the amount paid by the Allottees with interest at the rate of the highest MCLR of SBI plus 2% from the date of receipt of payment till the date of actual realisation of amount.

You can view the order here.

Promoter ought to consider various factors while specifying date of possession in the agreement.

MahaREAT

Vinay Agarwal Vs. Babji Munagala (common judgement)

Vinay Agarwal, proprietor of M/s. Balaji Symphony ("Appellant/ Promoter") had filed several appeals against the orders of MahaRERA, which required him to pay interest as per the dates mentioned in respective agreements to the various allottees ("Allottees/Respondents") of the project 'Balaji Symphony' for delay in handing over possession of the flats under Section 18 of the RERA Act.

Before the MahaREAT, Appellant claimed that the delay was due to rejections of applications for obtaining a Completion Certificate and non-functionality of the special planning authority i.e. Navi Mumbai Airport Influence Notified Area ("NAINA"). The Respondents contended that the project was registered under the RERA Act, and the date of completion declared under Section 4(2)(l)(c) can be enforced by the Allottees under Section 19(3) of RERA Act to claim interest for the delay in possession.

Before the MahaREAT, Appellant claimed that the delay was due to rejections of applications for obtaining a Completion Certificate and non-functionality of the special planning authority i.e. Navi Mumbai Airport Influence Notified Area ("NAINA"). The Respondents contended that the project was registered under the RERA Act, and the date of completion declared under Section 4(2)(l)(c) can be enforced by the Allottees under Section 19(3) of RERA Act to claim interest for the delay in possession.

Held: MahaREAT vide common judgment held that the provisions under the RERA Act are applicable only to pending projects with a promised possession date after May 1, 2017 i.e. commencement of RERA Act. The MahaREAT determined that the delay in obtaining the CC was due to the Appellant's failure to comply with the necessary requirements and the blame could not be placed solely on NAINA. The MahaREAT emphasized that the Appellant should have assessed the likely timelines for possession and anticipated delays caused by factors such as NAINA. The Appellant cannot escape the obligation to hand over possession as per the dates mentioned in the agreements, thereby depriving the Allottees of their right to claim interest for the delay in possession under Section 18 of the RERA Act. Therefore, the Allottees are entitled to receive interest as per the dates mentioned in the agreements.

You can view the order here.

Promoter has to obtain consent of 2/3^rd allottees for change in the layout/usage of the project.

MahaREAT

Dilip J Mehta Vs. Akshar Developers & Ors.

Dilip J Mehta ("Complainant/Appellant") booked two units numbered 67 and 68 admeasuring approximately of 4090 sq. ft. each ("said Units") in Akshar Decorum Business Park- phase I ("said Project") being developed by Akshar Developers ("Promoter/ Respondent"). No agreement for sale was executed between the Complainant and the Promoter. According to clause 14 of the allotment letter August 9, 2006issued by the Promoter ("Allotment Letter"), possession of the said Units was agreed to be handed over by March, 2009 subject to certain reasonable extension as mentioned in the Allotment Letter.

Owing to change in the project layout/plan, further extension of the possession delivery date and failure to deliver possession of the said Units before the agreed date, the Complainant filed a complaint before MahaRERA seeking various reliefs inter alia to direct the Promoter to execute the agreement for sale, deliver possession of the said Units and to pay interest for delay in delivery of possession.

Authority dismissed the complaint for lack of merits vide Order dated August 22, 2019 ("Impugned Order"). Complainant filed an appeal before Hon'ble MahaREAT challenging the Impugned Order. The Promoter contended that the Complainant has given an express consent for any change in the sanctioned plans in view of Clause 6 of the Allotment Letter which tantamount to an express waiver for changes in the project. Rejecting this contention, MahaREAT held that the consent provided as per Clause 6, is apparently only for change in plan and not for any change in end usage of the project altogether. Whereas, in the present case, changes undertaken are not only in the plan and layout but also in the project usage itself, which has altered the very nature of the project from warehouse to commercial. MahaREAT observed that Clause 6 of the Allotment Letter further shows that the consent provided therein, is of general nature and a blanket consent secured upfront in the beginning itself without even sharing the information for proposed changes as well as without full disclosures of underlying exact and specific expected changes. MahaREAT also observed that Respondent had not taken any mandatory prior consent of 2/3^rd of allottees under Section 14 of the RERA Act before undertaking such a major change in the layout/ plans and in project usage.

Held: The MahaREAT, directed the Promoter to deliver possession of alternative units in lieu of units already booked of equal area at the already agreed price of total consideration as per the Allotment Letter. The MahaREAT also allowed to adjust the payments already made and interest accrued in favour of the Complainant.

You can view the order here.

Buyers can change reliefs from seeking possession to refund with interest if due process of law is followed.

MahaREAT

Naresh Joshi and Sarang Joshi Vs. Nahar Homes LLP (common judgement in 2 appeals)

Naresh Joshi and Sarang Joshi ("Complainants") had executed registered sale agreements dated March 31, 2015 ("Agreements") for booking 2 (Two) flats bearing numbers 703 and 803 ("Flats") in B1-Building, "F- Residences" at Haveli, Pune ("Project") being developed by Nahar Homes LLP ("Promoter"). A housing loan was provided by Indiabulls Housing Finance Limited under 10:80:10 subvention scheme by executing tripartite agreement with the respective Complainants and the Promoter ("Tripartite Agreements"), wherein the Promoter agreed to pay pre-EMI interest till the handing over of the possession of the Flats to the Complainants.

Aggrieved by delay in handing over timely possession along with an OC and the default in payment of the pre-EMI by the Promoter, Complainants filed complaints before the MahaRERA on October 31, 2019, seeking various reliefs including a direction to the Promoter to comply with the terms and conditions of the Tripartite Agreements, handing over the possession of the Flats along with parking and OC. The relief sought was later amended to refund of monies with interest instead of the aforementioned reliefs.

The Adjudicating Officer ("AO") through 2 (Two) separate orders dated April 3, 2019, allowed the Complainants to withdraw from the Project and directed the Promoter to refund the amounts paid by each of the Complainants along with an interest. These orders were subsequently rectified by the AO vide 2 (Two) separate orders dated May 3, 2019 to include refund of the relevant taxes paid by the Complainants. Aggrieved by these orders, the Complainants preferred 2 (Two) separate appeals before the MahaREAT which were disposed of by the MahaREAT through 2 (Two) separate orders dated February 15, 2020and the complaints were remanded back to MahaRERA to decide afresh.

The Chairperson of the MahaRERA disposed of the complaints through an order passed in May 2021 ("Impugned Order") observing that the Complainants could not amend the reliefs sought at such a belated stage to withdraw and seek refund of monies from the Promoter. MahaRERA also observed that withdrawal from the Project would be guided by the terms and conditions of the respective Agreements and held that if Complainants intended to continue in the same Project, then the Promoter was directed to handover possession of the Flats at the earliest. Aggrieved by the Impugned Order, the Complainants filed appeals before MahaREAT.

Held: The MahaREAT held that Section 18 of the RERA Act neither bars nor imposes any restriction, whatsoever, against such switch of prayers by Complainants, if due process of law has already been followed. Amendment applications for withdrawal from the Project were filed in the complaint proceedings itself, much before the final decision in Impugned Orders and amendments have already been allowed before the final decision. Therefore, denying the prayers on the basis of the purported belated stage is not tenable in terms of the provisions of Section 18 the RERA Act.

You can view the order here.

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