Registrar cannot impose normal Stamp Duty on properties under auction: SC

By Dr Sanjay Chaturvedi, Editor.

In the matter of Registrar of Assurance & Anr Vs ASL Vyapar Pvt ltd & Anr (Supreme Court), Hon’ble Supreme Court on 10th Nov 2022 said that Section 47A of the Act cannot be said to have any application to a public auction carried out through court process/receiver as that is the most transparent manner of obtaining the correct market value of the property, also noted that undervaluation is not uncommon as payments are made through different method.

In the current matter, there were tenants in the properties interested in connecting matters. Also the Official liquidator valued the properties under public auction. A property purchased in public auction have more transparent process then any other mode of selling.

The Stamp Duty is imposed on instrument and not on transaction. Hence the landmark judgement shall have very wide impact on stamp duty determination on auction properties in real estate transaction process.

 

 

MAHA RERA: Refund applicable even after Termination

By Legal Research Cell

In the case of Mudhit Gupta vs. Glider Buildcon Realtors Private Limited (Complaint No. CC006000000193972), the complainant has filed this complaint seeking direction from MahaRERA to the respondent to refund the entire amount paid by him along with interest under the provisions of section 18 of the Real Estate (Regulation & Development) Act, 2016 (hereinafter referred to as ‘RERA’) in respect of the booking of a flat bearing no. 4205 on 42nd floor in the respondent’s registered project known as “South Tower” bearing      MahaRERA     registration   No.               P51900015854 situated at Mumbai.

Facts of the case: It is the case of the complainant that he submitted a form titled, “Request for Reservation of Residential Unit” (ROR), in respect of the said 2 BHK flat for the total sale consideration of Rs.3,96,75,301/- He sought for the details of registration of the said project repeatedly, but the respondent wilfully failed, neglected and avoided to provide the same.

Appalled by the fact that the (i) details of litigations affecting the said project were not disclosed; (ii) that respondent had not issued allotment letter in format uploaded by it on website of MahaRERA, or otherwise; and (iii) that the respondent had not expressed acceptance the request of the complainant, as made in the said ROR, in spite of having made the entire amount payable at the stage of ROR and the complainant vide his email dated 19/11/2018 called upon the respondent informing it that he is revoking his request and accordingly directed the respondent to refund the amount of Rs.22,21,818/- paid by him to the respondent along with interest thereon with 18% p.a. from date of receipt of said amounts till payment thereof to the complainant.

The complainant has not stated violation of section 12 of the RERA by showing any false notice /advertisement published by the respondent promoter, due to which he suffered from any sort of loss as contemplated under section 12 of the RERA. Hence, the MahaRERA cannot consider the claim of the complainant under section 12 of the RERA. In addition to this, the complainant has not produced any adverse order passed by any apex court imposing stay on the project.

Considering the facts and circumstances of this case, the MahaRERA is of the view that in absence of any agreed date of possession, the claim of refund sought by the complainant under sections 12 and 18 of the RERA cannot be considered. Therefore, if the complainant is seeking cancellation of the said booking the respondent is entitled to take action in accordance with the terms and conditions of the RFR dated 4-06-2018 signed by both the parties. The respondent after raising various demand letters to the complainants has finally cancelled the said booking on 14- 02-2019 and thereby forfeited the entire amount paid by the complainants in accordance with the terms and conditions of RFR.

Order: In an order dated 21st March 2022, in view of the facts and circumstances of this case and in compliance of principles of natural justice, since the complainant has chosen to exit from the project and the termination has already been done by the respondent, in compliance of principles of natural justice, the respondent promoter is directed to refund the amount to the complainant allottees by deducting the 10% of the amount paid by him (i.e. 10% of the Rs.22,21,818/-) towards the administrative charges within a period of 3 months from the date of this order without any interest considering the Covid-19 pandemic.

MahaREAT: earnest money can only be held accountable for the alternative claim of reimbursement

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.

Society cannot Terminate Development Agreement without MAHA RERA’s permission

By Legal Bureau Maharashtra Real Estate Regulatory Authority (Maha RERA) in a landmark order, protected home buyer’s money invested in redevelopment project and directed the builder & society to pay a penalty of Rs 15 lakhs for violating norms of RERA Act, 2016. Maha RERA was hearing the complaint of Kaushal Haria, Girish Chheda & Meghna Visaria and Velbai Haria who had booked flats in New Sangeeta CHS Ltd, Vidyavihar (E) in May 2016. The said project was a redevelopment project between society and builder Valdariya Constructions. The society in December 2011 appointed a builder as a promoter with registered development agreement for sale. In the meantime, a dispute arose between builder and society and matter went to Arbitration and the society terminated the development agreement executed with the builder. Authority in order said, “The termination of the development agreement executed between builder and society is after the commencement of RERA Act and this should have done with the permission of Maha RERA. Therefore, transferring the development rights is not valid as this project is registered with MahaRERA.” The Arbitrator allowed society for self redevelopment. The complainants were seeking interest for delayed project and handover the possession with a parking lot and all amenities. Society submitted the response before the court said, “The flat sold by the builder was illegal and it was sold below the market price. The complainants can seek a refund from the builder however they cannot seek an injunction against them.” Authority said under the provisions of section 2(zk) of the RERA Act, society is all the promoter of the project. Therefore, society is equally liable to the allottees who have booked their flats. Dr Vijay Satbir Singh, Member – 1/ Maha RERA ordered, “Considering the facts the complainants are the allottees of the project registered with Maha RERA and further directs society to join the complainants as its member within a period of 30 days from the date order.” Society is directed to give possession of their flats to the complainants by obtaining occupancy certificate, as the society has taken over the entire project for self-development as per the order of the arbitrator. In addition to this for violation of Section-15, the Maha RERA directs the builder and society to pay a penalty of Rs 15,00,000 to Maha RERA, the order said.

Society made a promoter for redevelopment project in RERA

By Legal Bureau Maharashtra Real Estate Regulatory Authority (Maha RERA) in a landmark order, protected homebuyer’s money invested in redevelopment project and directed the builder & society to pay a penalty of Rs 15 lakhs for violating norms of RERA Act, 2016. Maha RERA was hearing the complaint of Kaushal Haria, Girish Chheda & Meghna Visaria and Velbai Haria who had booked flats in New Sangeeta CHS Ltd, Vidyavihar (E) in May 2016. The said project was a redevelopment project between society and builder Valdariya Constructions. The society in December 2011 appointed a builder as a promoter with registered development agreement for sale. In the meantime, a dispute arose between builder and society and matter went to Arbitral Tribunal and the society terminated the development agreement executed with the builder. Authority in order said, “The termination of the development agreement executed between builder and society is after the commencement of RERA Act and this should have done with the permission of Maha RERA. Therefore, transferring the development rights is not valid as this project is registered with MahaRERA.” The arbitral allowed society for self redevelopment. The complainants were seeking interest for delayed project and handover the possession with a parking lot and all amenities. Society submitted the response before the court said, “The flat sold by the builder was illegal and it was sold below the market price. The complainants can seek a refund from the builder however they cannot seek an injunction against them.” Authority said under the provisions of section 2(zk) of the RERA Act, society is all the promoter of the project. Therefore, society is equally liable to the allottees who have booked their flats. Dr Vijay Satbir Singh, Member – 1/ Maha RERA ordered, “Considering the facts the complainants are the allottees of the project registered with Maha RERA and further directs society to join the complainants as its member within a period of 30 days from the date order.” Society is directed to give possession of their flats to the complainants by obtaining occupancy certificate, as the society has taken over the entire project for self-development as per the order of the arbitrator. In addition to this for violation of Section-15, the Maha RERA directs the builder and society to pay a penalty of Rs 15,00,000 to Maha RERA, the order said.

Maha RERA: Society is promoter-owner of redevelopment project & equally liable

By Maharashtra Bureau

MUMBAI:

In December 2014, a home buyer booked a flat in Parijat CHS Ltd in Borivali by executing a registered agreement for sale in which the buyer paid 70% of the amount of its flat. According to the said agreement, the promoter was liable to handover possession of the said flat to the buyer by March 31, 2015. But due to delay in the project the possession is yet to be given.

Later it came into the lime night that the said project was the redevelopment project of Parijat CHS Ltd. The order read that “The builder has undertaken redevelopment work of the said society and in December 2016 the society terminated his appointment as the promoter and also filed arbitration proceeding before the court.”

An advocate from builders side said that “Due to the pendency of the said proceeding the builder could not complete the project, within a time-bound manner. However, the respondent stated that since he has failed to hand over possession of the said flat to the home buyer, he is ready and willing to refund the amount paid by the buyer with interest.

Dr Vijay Satbir Singh, Member of Maha RERA was hearing case said, “The respondent is directed to pay Interest to the complainants from 1st May 2017 till the actual date of possession of the prevailing rate of Marginal Cost Lending Role (MCLR) plus 2% as prescribed under the provisions of Section-18 of the Real Estate (Regulation and Development) Act, 2016 and the termination issue is sub-judice before the Hon’ble High Court of Bombay and some hos, not attained to finality.”

He further noticed that the Parijat CHS Ltd the owner of the plot of land under the said project, who has undertaken the re-development work through the respondent, is also equally liable for the project is also promoter-owner of the said project and its name is not uploaded on Maha RERA website, by the respondent. The Maha RERA, therefore, directs to add the name of society as promoter owner in the project under reference website.

Bombay High Court says RERA provisions would apply to long-term lease agreement

By Accommodation Times Bureau

MUMBAI

The Bombay High Court on August 8 while giving a landmark judgment it said cases of a long-term lease agreement and compensation complaints can be heard by Maha RERA. An appeal was filed by the Lavasa Corporation, which is constructing a township project around Pune.

The single bench of Justice Shalini Phansalkar Joshi was hearing the case and  passed the ruling. The project is also registered with the authority.

The authority had the power to hear the case and law was applicable to the 3 apartments which were booked on an agreement of lease for 999 years and also 80% of the purchase price was paid, the bench said.

The Lavasa Corporation challenged the order passed by Maha RERA and in its appeal claimed that cases of agreement of lease would not apply under the authority. It further requested High Court tat this case is of lessor and lessee which doesn’t consist of any sale or transfer agreement.

The project is registered with RERA however, provisions would apply to it, a court said. It further said, it can never be the intention of the Legislature to exclude long-term leases as act would be defeating the very object of the Act, the developer in such cases by executing the ‘Agreement’ with the nomenclature as the ‘Agreement of Lease’, can very conveniently escape from the clutches of the provisions of this Act.

Merely because the Legislature has excluded the allotment, when it is given on rent, it does not exclude the long-term lease. That will be defeating and be frustrating the object of the Act and hence, it has to be held that the Appellate Tribunal has rightly held that, so far as the present case is concerned, considering the long-term lease of ‘999 years’, it would definitely amount to a sale, the court judgement said.

The mechanical interpretation given by the ‘Adjudicating Officer’ to the provisions of the Act, merely focusing on the nomenclature of the ‘Agreement’, was clearly defeating the object of the Act and hence, it was rightly set aside by the Appellate Tribunal, it said.

The interplay of all the provisions contained in the Act, coupled with the real purport of the ‘Agreement of Lease’, leads to no other inference, but to hold that, the complaints filed by the Respondents before the ‘Adjudicating Officer’, under Section 18 of the Act, are definitely maintainable and the ‘Adjudicating Officer’ is having the jurisdiction to entertain and decide those complaints.

In view thereof, the Civil Applications pending therein do not survive and the same is disposed of as infructuous.

Society members are not Allottee as per RERA

By Dr. Sanjay Chaturvedi LLB, Ph.D.

Smt. Vimla Kapoor V/s M/s. Ekta Supreme Corporation (CC006000000023132) Order dated: 10th April 2018

The complainant who is members of o redevelopment society known as “Corner View CHS Ltd” has filed this complaint in the Maha RERA registered project bearing No. P51800000908 at Bandra (West), Mumbai seeking following directions to the respondent.

To give the complainant an additional 41% carpet area over and above the original carpet area of 824 sq.ft. as the rightful and legitimate FSI of the complainant’s property by virtue of the fungible FSI given by Competent Authority i.e. MCGM.

To enter into an agreement for sole for the said premises for the extra carpet area as decided in development agreement / Supplement Development agreement.

To pay the hardship cost/corpus fund to the complainant as given to other commercial uusers/allotteeson the ground floor of the project and to adjudicate for the losses incurred and interest on the amount accrued as per the Act.

This matter was finally heard today. The complainant argued that she is the rightful owner of the apartment in Corner View CHS Ltd. since 1979 which is being redeveloped by the respondent. The latter has denied possession of the apartment agreed to be transferred to her in redeveloped building after forcefully evacuating her from her original premises under section 354 of the BMC Act. She has not given consent for the redevelopment and was forced to accept respondent’s conditions on which he had entered into the agreement with her on 30-09-2009. He never got it registered as required under prevalent laws and in violation of section 13 of the Act. The complainant, therefore argued that she may be given possession of her shop premises under section l9 (3) of the RERA Act,2016 in the redevelopment project of the respondent, since she is occupying the same for the last 40 years.

Maha RERA Ordered: this Authority gets jurisdiction to resolve the dispute pertaining to the sole component. According to Section-3 (2)C, of RERA Act, 2016, no registration of real estate project is required for the purpose of re-development. As the complainant’s claim pertains to the redevelopment component, which is not registered with this Authority, the claim of the complainant is beyond the jurisdiction of this Authority. Complaint Dismissed.

 

Society dispute for redevelopment not tenable in RERA

By Dr. Sanjay Chaturvedi LLB, Ph.D.

Suresh Daniel Devaral V/s United Shelters Pvt. Ltd & another (CC006000000001709) Order dated: 3rd January 2018

The Complainants in their complaint have stated that they are the members of a Co-Operative Housing Society which is taken up for redevelopment by the Builder. The Complainants alleged that Respondent 2 has appointed the builder without following the procedures as mandated by law. The Complainants further alleged disputes between them and the Managing Committee members of the said Cooperative Housing Society.

Maha RERA Observed: On the basis of arguments by Complainants, it is evident that the dispute is between the Complainants i.e. some member of the Cooperative Housing Society and the Respondents which are the Promoter and the Cooperative Housing Society (Landowner). The Complainants have not been able to point out any contravention or violation of the provisions of the Real Estate (Regulation and Development) Act, 2015 or the rules or regulations made there under. MaIa RERA is not the proper forum to resolve the above mentioned issues, raised by the Complainants. The Complainants dismissed.

Is Society Redevelopment having jurisdiction of RERA?

By Sanjay Chaturvedi LLB, Ph.D.

Himbindu Co-operative Housing Society V/s Mr. Jitendro Shankarlal Brahmbhatt ([email protected]) Order dated: 5th Jan 2018

The complainant Society, through it’s Secretary, has filed this complain seeking following directions from this Authority

a) To register the Second Supplementary agreement doted 23rd August 2015 on payment of all dues within such time as may be fixed by the court.

b) To execute and register for fresh Supplementary agreement.

c) To pay Rs.50,000/- p.m. from September, 2015 to date of registration of supplementary agreement dated 23.08.2015.

d) To pay each of the members liquidated damages.

e) Such other reliefs as is prayed for in complaint.

The respondent disputed the claim of the complainant and stated that the present complaint is not maintainable, since it is o dispute between the society and the promoter. There is no violation of RERA Act, Rules and Regulations made there under and this Authority has no jurisdiction to try and entertain such disputes.

Maha RERA Order: Considering the rival submissions mode by both the parties and after perusing the record, this Authority has observed that Maha RERA is not the forum for the settlement of dispute between the society and the promoter arising out of the development agreement. Further, in the present case the dispute between the complainant and the respondent is of civil nature and does not pertains to any violation of RERA Act, Rules or Regulation mode there under.

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