By Legal Cell.
Yes, it is affirmative . Maha RERA Appellate Tribunal have opined that even when Draft Agreement for Sale is exchanged, the promoter or allottee is binded by the covenants of the draft agreement for sale.
In a landmark judgement in the matter of Oberaoi Constructions ltd vs. Assets Auto (I) P Ltd, (AT/6/10502 of 2018) Hon’ble Tribunal opined:
“The agreement for sale between the Promoter and the Allottee was not executed, signed and registered’ Transaction is governed by provisions of RERA,2016 from 1 .5.2017 i.e. date of application of RERA,2O16 As per Sec. 18 of RERA’2016 the Allottee has right to withdraw from the project and to claim the total refund along with interest and compensation on account of delay in handing over possession or the Allottee may not withdraw from the project and may claim the interest on the amount paid to the Promoter for delayed period of possession till the possession is received The order of the MahaRERA which is challenged in this appeal arises out of the complaint which was filed by the Allottee for claiming the refund of the amount from the Promoter on account of termination of allotment. So, Sec 18 of the RERA,2016 does not attract to the present matter.”
Para 21: “The above mentioned provisos arc evident enough to show that on termination of agreement, the Promoter is entitled to make adjustment and recovery of any agreed liquidated damages while refunding the amount to the Allottee. So, the right to recover the agreed liquidated damages is provided in second proviso of clause 4.2 of the model form of agreement.”
Para 22: “Now, let us turn to clause 18 which is having binding effect. The refund as per the impugned order is awarded as per clause-l8 of the model form of agreement.”
Para 26: “After hearing both the sides, Learned Chairperson of MahaRERA disposed of the complaint on 29 1 018 and directed the parties to execute and register the agreement within 30 days from the date of the order.”
“The Promoter was permitted to demand the due balance price without interest on delayed period of payment of such price. The Allottee was directed to make timely payment to the Promoter. This decision was not challenged either by the Promoter or the Allottee by preferring the appeal. So, the order passed in complaint No.CC006000000012320 has become final and binding on the Parties.”
Para 29: “The complaint No. CC0060000000043999 was filed by the Promoter to impose penalty on the Allottee for not complying the orders of execution and registration of agreement for sale passed by MahaRERA from time to time Allottee had demanded parking spaces as per choice and not as per allotment made by Promoter. ln this complaint also the parties amicably settled the dispute and the Promoter had withdrawn the complaint The Learned Chairperson of MahaRERA directed the parties to execute and register the agreement as per the RERA,2016 and rules and regulations made thereunder. The Promoter was also given liberty to file fresh complaint if the Allottee continues to commit the breach.”
Para 33: “In the complaint No CC006000000023326,the Allottee had sought the deletion or amendment of some clauses of the draft agreement for sale The above mentioned clauses of earnest money and right to forfeit the earnest money on termination of agreement were not at all challenged. So, the Allottee had no objection at any time in respect of clauses of the earnest money and right to forfeit the earnest money upon termination of the agreement. On the contrary, by challenging and objecting some selected clauses of the draft agreement in the complaint No. CC006000000023326′ Allottee had agreed for remaining clauses of agreement Both parties filed the consent terms by making the deletion or amendment of those clauses of the draft agreement which is sufficient to show that parties had agreed for draft agreement including amended or deleted clauses in agreement.”
Para 34: ” lt is pertinent to note that the Allottee has not challenged termination of allotment The Allottee simply asked for refund of the entire amount paid to the Promoter in view of clause-18 of model form of the agreement.”
Para 35: ” lt is true that the agreement is neither signed nor executed and registered. The consent terms between the Promoter and the Allottee filed in the complaint No.CC006000000023326 being the decree’ it is binding on both the parties as the contract between them.”
Para 37: ” The above ratio is applicable to the present matter and even though formal contract is not signed and executed by both the parties, there is concluded contract between the Promoter and the Allottee as they filed the consent terms in the complaint No CC006000 000023326 regarding the deletion or amendment of some clauses of the draft agreement for sale and those consent terms were authorized and approved by court and become the decree which is binding on the Promoter and the Allottee.”
Para 46: ” ln view of above discussion, we are of the opinion that the draft agreement for sale without signatures of the parties and without registration is legally enforceable and binding on the promoter and the Allottee and moreover the transaction between the promoter and the Allottee constitutes the concluded and valid contract and the Promoter is entitled to forfeit the earnest money of 20% of sale price on termination of allotment by the Allottee.”