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By Fiona Mehta

This article examines the matter of Samudra Darshan Co vs. Peter Almeida & Ors (AT006000000053403)


Facts of the case: The first two appeals’ appellant, a cooperative society, nominated Respondent No. 3 as developer via redevelopment agreement (RDA) dated 08.07.2005 for developing the property under its occupation, according to the appeals’ brief factual matrix. According to the aforementioned agreements, Respondent No. 3 had the right to sell apartments in the selling component only if the rehabilitation of the members was complete. After receiving the required approvals, Respondent No. 3 started building in 2011 and also started selling apartments in the sale component, which would be built in accordance with agreements with the Society. The claim of the allottees is that they paid a total of Rs. 64.50 lacs for the flat number 1103 in wing “C” of the sale component building, against which a sum of Rs. 6,17,550 was given as an earnest money deposit. To that end, it is asserted that Respondent No. 3 also issued an allocation letter dated 11.06.2011.

With time passing, the Society terminated the RDA through a deed of cancellation signed by the Society and Respondent No. 3 on September 16, 2014, as a result of Respondent No. 3 failing to fulfil the obligations it undertook under the said RDA and due to the project of redevelopment being abandoned. As a result, on 21.10.2014, the Society appointed Respondent No. 7 as the new Developer by signing a development agreement. Subsequently, a public notice dated 30.04.2015 was also published in the newspapers for the general public’s awareness.

The new Developer registered the project under RERA once RERA went into effect in May 2017. Following this, the project’s allottees filed a complaint with MahaRERA asking for instructions to the new developer to assign the flat in the building and further instructions to the ex-developer or the new developer to execute a sale agreement with the allottees in accordance with the allotment letter issued to them by the ex developer on June 11, 2011. Alternately, allottees asked the respondents to reimburse them for their payments, plus interest, and pay them compensation of Rs. 50 lacs.

In the current situation, it appears that Society has no contractual relationship with the allottees under the circumstances, and the transaction is solely and exclusively between the allottees and the former developer. Whether or not the development agreement between the Ex-developer and the Society is cancelled, the facts collected in this case are clearly within the ratio of Vaidehi.

Furthermore, it is noted that the new developer was chosen by the society and has not signed a contract with the former developer. As a result, it cannot be held accountable for keeping promises made to allottees by the former developer, contrary to what the authority incorrectly stated, particularly in para. 19 of the original order and as reiterated in the order under review application. As a result, neither the society nor the new Developer that it chose are required to acknowledge the allottees’ claims as requested in the case.

Order: In light of the aforementioned observations, the Society and new Developer cannot be held accountable to allottees due to the lack of privity of contract, and as a result, allottees are not entitled to the relief claimed in the complaint against the Society or new developer. Since a new Developer has already taken over the project in these circumstances, no flats can be made available to project allottees.

Due to this, the ex-Developer who has received the earnest money from the allottees can only be held accountable for the alternative claim of reimbursement made by the allottees, if any. For the aforementioned reason, it would be acceptable to remand the complaint so that the Authority can decide on the refund amount again and identify the previous Developer’s responsibility for it after speaking with the interested parties.

In the above circumstances, we are of the view that impugned order cannot be sustained and the same deserves to be set aside.

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