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By Dr. Sanjay Chaturvedi, Editor

An allotee who buys in redevelopment project is not protect if Society terminates the developer and appoints new developer eve though it is registered agreement.

Vaidehi Akash Judgement: 

In an historic judgement in the matter of Vaidehi Akash (   Vaidehi Akash Housing Pvt.Ltd. Vs. New D.N. Nagar Co-op.Housing Society Union Ltd. & Ors. [2015(3)ABR270] Hon’ble Bombay High Court declined to entertain the new buyers in the property and have given the right to society to terminate the Development Agreement. All new buyers were asked to file suit for refund from the out going developer.

The landmark judgement was decided by Hon’ble Bombay High Court on 1st December 2014 where rights of the Allottees under MOFA 1963 was decided.

It was observed that the development agreement executed by the Ex-Developer with the society was on principal to principal basis and as per agreement executed by the Allottees with Ex-Developer, the rights of Allottees thereunder were subject to Ex-Developer’s liabilities and not of society. It was held that the Vaidehi Akash society was not a co-promoter U/s. 2 (c) of MOFA and was merely in the position of owner vis-à-vis third party purchasers and the purchasers did not have any enforceable right, under MOFA, against the Society or the New Developer appointed by society, after termination of development agreement with Ex-Developer.

Endorsed by MAHA RERA Appellate Tribunal:

Now, coming back on RERA, The hon’ble Maharashtra Real Estate Appellate Tribunal in the matter of Samudra Darshan CHS Ltd in appeal no (AT006000000053403) have dismissed the the order of Hon’ble MAHA RERA Authority where it had asked the society and new developer to honour the commitment made by the ex-developer or outgoing developer. The Hon’ble Tribunal in its 19 page land mark Judgement, have asked the buyers and allottees to go back to RERA and ask for the refund. The appeal was filed by Ld Adv Nilesh Gala.

What does it mean?

When you buy a flat in redevelopment project, and pay to the builder who is having development agreement is depend on the mercy of the Society wo can terminate the builder after the expiry of development agreement and then your right, even though it is registered agreement, is terminated along with development agreement. New builder who is appointed by the society is not obliged to honour those registered agreement. A buyer then have to file suit for recover and refunds in court of law.