In a significant ruling, the Maharashtra Real Estate Appellate Tribunal (MREAT) has partially allowed an appeal filed by Mr. Rajaram Bhati against Transcon Developers Pvt. Ltd. and others regarding non-execution of a sale agreement despite substantial payment. The dispute involved a flat booked in the prestigious “Transcon Triumph Tower-I” project in Andheri, Mumbai. The case highlights critical aspects of real estate law, particularly under the Maharashtra Ownership of Flats Act (MOFA) and the Real Estate (Regulation and Development) Act (RERA).
Background of the Dispute
Mr. Bhati booked a flat measuring approximately 1760 sq. ft. (Flat No. 1903) in a project initially known as “Prathamesh Park-Phase III,” later renamed “Transcon Triumph Tower-I.” An allotment letter was issued on 20th April 2011 by M/s. MNP Associates (Respondent No. 2), and a sum of ₹57,00,000 was paid by the complainant — well above the 20% threshold stipulated under MOFA for execution of an agreement for sale.
However, despite this considerable payment, no registered sale agreement was executed, leading Mr. Bhati to file a complaint before MahaRERA seeking execution of the agreement, possession of the flat, and compensation for the delay.
Arguments and Legal Standpoints
The respondents contended that the letter dated 20th April 2011 was a “security letter” and not an allotment letter. They argued it lacked essential particulars like flat number, possession date, and sanctioned plans, thereby not constituting a valid document under MOFA or RERA. Furthermore, the sanctioned plan for the project was not available at the time of issuance, calling into question the legality of the initial offer.
The complainant, however, insisted that the payment and letter created a legal obligation and that the failure to execute the agreement was a breach of both MOFA and the RERA Act.
During the proceedings, it came to light that MNP Associates had merged into Transcon Developers Pvt. Ltd. as per an NCLT order dated 9th December 2022, thereby passing on all liabilities and responsibilities to the successor company.
Key Legal Issues Considered
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Whether the letter dated 20th April 2011 constituted a binding allotment.
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Whether the payment of ₹57,00,000 obligated the execution of a registered agreement under MOFA.
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Whether the respondents violated provisions of RERA and MOFA by not executing the agreement.
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The implications of the merger between MNP Associates and Transcon Developers Pvt. Ltd.
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The maintainability of the complaint and the correctness of the MahaRERA dismissal order.
Final Judgment and Directions
The Appellate Tribunal quashed the MahaRERA order dated 22nd June 2021, which had dismissed Mr. Bhati’s complaint.
Key orders passed:
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Agreement for Sale: The respondents were directed to execute and register the agreement for sale within 30 days, based on the original terms from the letter dated 20th April 2011.
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Remedies Open: The appellant was allowed to seek additional remedies following the execution of the agreement.
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Cost Awarded: ₹15,000 to be paid to the appellant as litigation cost within 30 days.
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Compliance Communication: The order was to be shared with all parties and MahaRERA under Section 44(4) for enforcement.
Legal and Evidentiary Highlights
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The Tribunal acknowledged that while the original letter lacked clarity and was issued before sanctioned plans, the ₹57,00,000 payment triggered MOFA provisions requiring the execution of a registered agreement.
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It held that the absence of certain details in the letter did not render the agreement void under Section 29 of the Indian Contract Act, but it did signal an obligation to formalize the transaction through a valid agreement.
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The Tribunal considered the post-merger status of the developer and extended the liability to the successor entity, Transcon Developers Pvt. Ltd.
Conclusion
This judgment reinforces the legal principle that real estate developers cannot bypass statutory requirements under MOFA and RERA by withholding execution of a sale agreement after accepting substantial payments. It emphasizes the need for transparency, compliance with legal thresholds, and accountability — particularly in large-scale projects that undergo name changes, restructuring, or corporate mergers.
The decision sets a precedent for homebuyers to assert their rights when agreements are delayed or denied, despite payment. It also underscores the power of regulatory and appellate bodies to ensure developers uphold statutory responsibilities, regardless of internal corporate changes.
