MahaRERA: Pay penalty in 2 months, or amount will double every month

RERABy Fiona Mehta

 

In a landmark judgment, the MahaRERA ordered a developer to pay a penalty, the violation of which would result in a doubling of the penalty sum each month, for violating a previous decision to reimburse a plot buyer who had invested money 10 years ago.

 

Facts of the case: As per the case, Vishal Raut, 42, an Andheri resident, had invested Rs 4.7 lakh in 2012 in a non-agricultural bungalow plot at M/s Ginger Country Living Private Limited’s Ginger Hill project at Kharade village in Shahapur. As per the agreement, the payment was made for a 1,900-sq ft (approx) hilltop plot for a total consideration of Rs 7 lakh.

“In fact, there has been no construction in that plot barring access roads. Whenever I got in touch with the developer, they would give evasive replies,” he said, adding that later in 2016-17 he got a call from the developer asking him to collect cheques for the refund as they could not develop the project. “Instead of making a full refund with interest, they assured to issue post-dated cheques and asked me to sign a no-due letter in return, but I refused. Thereafter, I moved MahaRERA,” Raut said.

MahaRERA issued an order on November 10, 2020, favouring Raut and directing the developer to execute the registered agreement within a month or face a return of the money. Raut, through counsel Godfrey Pimenta, filed a non-execution application with MahaRERA when the developer failed to carry out the order.

In his ruling, Dr. Vijay Satbir Singh, Member 1 of MahaRERA, noted that M/s Ginger Country Living Pvt Ltd had skipped the hearing and failed to provide any justification for the delay. “It demonstrates that the respondent is not disposed to object to this motion for non-execution. Therefore, the MahaRERA believes that the complainant’s argument for a refund has merit, Dr. Singh said.

“The Respondent is directed to refund the full amount paid by the Complainant towards the consideration of the Said Flat together with interest as prescribed under RERA and the Said Rules made thereunder within a period of 2 months, failing which the Respondent shall be liable to pay penalty of Rs 5,000 per day for every day of default until actual compliance of the said order.

The order stipulated that the fine amount would double every day after each month.

MahaRERA: Landowner ordered to takeover a housing project which the builder/developer has abandoned

By Fiona Mehta

 

In a recent landmark ruling, this is one of six similar orders in MahaRERA’s history under Section 7 of the RERA Act. that have allowed project allottees the freedom to choose how their abandoned project will proceed moving forward.

 

Facts of the case: The project in question, Luxury Empire Township Phases 2 and 3, was registered with MahaRERA in July 2017 under the name Goldstar Realtors, with completion dates of December 2022 and December 2024, respectively, according to the website of MahaRERA. In all, 50 buildings were proposed with MahaRERA. However, 30 buildings are registered with MahaRERA.

During the period of 2011 to 2016, buyers were offered possession of their flats or shops within 48 months of the date of allotment. For apartments and retail spaces sold between 2011 and 2016, Goldstar Realtors received 30% and 60% of the sales price, respectively. On the ground, however, no work was done. In fact, since 2017, the project has been on the verge of being abandoned.

Therefore, under sections 7 and 8 of the RERA Act, it demanded the developer’s registration be cancelled. Additionally, the purchasers complained, arguing that the association should be permitted to finish the project on its own or with a different developer approved by MahaRERA. The homebuyers then submitted consent terms to MahaRERA acknowledging the landowner as the developer.

 

Order: In a ruling dated July 5, 2022, the MahaRERA stated that according to the records, it appears that the project’s promoter has given up on it and hasn’t taken any action to see it through to completion. As a result, on May 28, 2022, MahaRERA received the consent terms signed by the allottees and respondent number 2 (the landowner) and dated May 23, 2022. The landowner has agreed to carry out this project, for which the allottees have given their agreement, under the stipulated consent terms. In light of the foregoing, it is deemed necessary to accept the consent terms provided by the allottees and the landowner in order to protect their interests and guarantee the project’s prompt completion.

It further added, “The MahaRERA further noticed that both the respondents are the promoters as defined under Section 2(zk) of the RERA and they are liable to complete this project. The respondent No.2 has a duty as a promoter to complete the project if the respondent No.1 is unable to do so. The landowner must take all additional necessary steps as required by RERA’s requirements and the applicable Rules adopted thereunder. The landowner must defend and uphold the legitimate rights of the project’s allottees as well as follow any previous MahaRERA orders issued in response to complaints against the project.”

MahaREAT: An act of the partner is binding on the partnership firm.

By Fiona Mehta

 

In the matter of Mr. Jervis Anthony Creado and Mrs. Rose Jervis Anthony Creado vs. Aishwarya Light Construction Company (Appeal No. AT006000000052415), this appeal emanates from the order dated 24th December, 2019 passed by MahaRERA whereby the learned Authority had not granted reliefs of interest / compensation under section 18 of the RERA as sought by appellants in their complaint.

 

Facts of the case: The complainants have booked a flat No. 504, on 5th floor, ‘A’
wing ad measuring 466 sq. ft. along with one open parking space in the project ‘Aishwarya Heights’ of the respondent situated at Andheri, Mumbai for a consideration of Rs. 80,00,000/-. The respondent had issued allotment letter dated 27th February 2017 to the allottees. The allottees have paid entire consideration to the developer.

On 27th February, 2017 the respondent has executed unregistered agreement for sale with the CC006000000141152 filed by the appellants whereby, the complainants and agreed to handover possession of the subject flat to complainants by December, 2017. The developer neither registered agreement for sale nor handed over possession of suit flat to complainants therefore the complainants filed complaint and sought directions to developer.

The developer appeared in the complaint and disputed the claim of complainants contending in his reply that the alleged agreement for sale does not confer any right to the complainants as it was an arrangement between them and therefore the same has not been registered.

It is worthy to note that though the agreement for sale was undated but the facts remains that one of the partners of the respondent has agreed to handover the possession of the subject flat to allottees by December, 2017. An act of the partner is binding on the partnership firm.

 

What options does Section 18 of RERA Act gives you? Section 18 gives an option to the allottees either to continue with the project by claiming interest on delayed period of possession or to withdraw from the project and to claim refund of entire amount along with interest including compensation. In the instant case allottees have chosen the first option. It clearly shows that the allottees are interested in getting possession of the flat as they have already paid substantial amount out of the total price of the flat to the promoter.

 

Order: The impugned order shows that the learned authority has denied relief of interest on account of delayed possession only for the reason that there is no registered agreement for sale executed between the parties showing any agreed date of possession. However, the material produced on record and the impugned order clearly indicate that one of the partners of respondent executed undated agreement for sale with the complainants.

Moreover, the respondent has also not disputed the factum of execution of undated agreement for sale by its partner. Therefore, we are of the view that the allottees are entitled to interest on their investments from January, 2018. Therefore, the appeal is allowed by the MahaREAT.

MahaREAT rejects application for amendment of MahaRERA order when the applicant is late for application.

By Fiona Mehta

 

In the matter of Shridhar Krishna Mani & Another vs. Lucina Land Developers Limited (AT006000000010885), Appellants are seeking amendment in Prayer Clause of Memorandum of Appeal by contending that Respondent obtained part occupation certificate without completing pending works (‘amenities’) promised in the brochure and offered possession of the flat to Appellants. Therefore, in the complaint, Appellant had sought specific direction from the Authority to Respondent to complete pending works.

As a result, the Appellants requested similar direction in the prayer clause (a) in this case. Respondent, on the other hand, made it apparent in written representations that it would/could not supply the amenities promised at the time of the flat’s sale. Respondent’s final plan plainly shows that no space is left for community amenities, notwithstanding Respondent’s assurance in the brochure.

In such circumstances, Appellants considering permanent losses made specific submissions in written argument. Therefore, it is just and necessary to consider the prayer clause (g) in Appeal and Appellants be allowed to amend the prayers.

On the one hand, Appellant’s Advocate claims that Respondent has broken Section 12 of the Act by failing to provide the amenities and facilities promised in the brochure and ads published in the major publications. Appellants are seeking compensation from Respondent under the proposed amendment for failing to provide amenities as indicated in the brochure and marketing. The proposed revision will not alter the nature of the reliefs, which are consistent with the Appellants’ pleadings.

On the other hand, Respondent’s Advocate states that a bare perusal of the Application for Amendment would show that it is not an Amendment Application. There is no reference of schedule of the amendment in the application.

Learned Advocate has drawn attention to paragraphs 3, 4, 7(j), 7(p), 7(nn), 7(ss), 7(ww), and 7(aaa) of Respondent’s affidavit in reply dated 9th February 2019 and poignantly submitted that Respondent has specifically mentioned in the affidavit-in-reply that Respondent has provided amenities to Appellants, as agreed in the agreement for sale. It means that Respondent’s affidavit-in-reply fabricated Appellants’ claim that Appellants learned for the first time from Respondent’s written representations that Respondent will not provide amenities as depicted in the brochure. Furthermore, the appellants failed to use their entitlement at an earlier stage and instead submitted the current application after the case was closed for judgement.

Final order: After analyzing the parties’ competing arguments and the totality of the facts and circumstances of the case, it can be concluded that, for the new cause of action that has emerged, Appellants can raise this issue before the proper venue in line with the RERA 2016. As a result, the Application for Amendment of the Appeal Memo is not only late, but it would also alter the essence and character of the Appeal. As a result, the considered opinion that the Application lacks merit and is liable to be rejected.

Allotment Letter having no date of possession: Maharashtra RERA Tribunal asked TATA Housing to refund

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By SRELJ Bureau

In a land mark judgement, Maharashtra RERA Appellate Tribunal asked builder to refund the booking amount taken by TATA Housing Development Co Ltd. The Judgement said “In this matter, the foremost material and contentious issue is the date of possession which forms the sole basis for ascertaining the delay in possession’ Documents on record reveal that Allottee booked the flat on 24/06/2015 and allotment letter was issued on 11/07/2015. None of these documents stipulates date of possession’ Allottee’s contention is that possession was promised to be given by 2018 and later on it was revised to 2020 and ultimately to 2022 as is declared on the portal of Maha RERA. Contrary to this, it is argued by Developer and as observed by learned A’O’ also, date of possession was to be mentioned in the agreement for sale as
per the terms of booking form’ Developer has claimed that Allottee had shown his willingness to accept the possession by 2020 and was not happy with revised possession dale of 2022. It is further contended by Developer that final date of possession is 2022 as declared on Maha RERA portal and Developer never promised delivery of possession by 2018 or 2020 to the Allottee as falsely claimed by Allottee.”

As the original date of possession being in 2018, the Hon’ble Tribunal asked the Builder to refund the entire principle amount along with interest.

Maha RERA recognised COVID-19 period as Force Majeure

By SRELJ Bureau

In its Order dated 18th May 2020 vide Order No 14/2020, Maha RERA have invoked Force Majeure for COVID-19 Pandemic.

The Order with reference to the advisory issued by the Central Advisory Council on 13th May 2020, have extended time line for all all statutory compliance due to “Force Majeure” under the provisions of RER Act 2016.

The Order said “Whereas, in view of COVID-19 (Corona Virus) Pandemic and consequent nation-wide lockdown with effect from March, 2020, reverse migration of labourers to their native places and break in supply chain of construction material, the construction activities of real estate projects across the country have been severely impacted.”
“Whereas, an urgent meeting of Central Advisory Council (CAC) was held on 29th April, 2020, and as per its recommendations Ministry of Housing and Urban Affairs has issued Advisory regarding extension of registration of real estate projects and concurrently extending timelines of all statutory compliances due to ‘Force Majeure’ under the provisions of Real Estate (Regulation and Development) Act, 2016 (RERA), on 13th
May 2020”

Accordingly, in keeping with the advisory of Government of India and in exercise of the powers under section 37 read with Section 34(a), 34(f) and 34(g), a force majeure period of six months, from 15 th March to 14th September, 2020 is being invoked and the following directions are issued with immediate effect:

MahaRERA vide Order No. 13/2020 has already revised project validity by three months. The said validity is extended by a further period of 3 months suo-motu. MahaRERA shall accordingly issue project registration certificates, with revised timelines for such projects, at the earliest. The aforesaid extension will be in addition to the extension already granted or that may be granted to a project under the first proviso to Section 6 of the Act.
• For further extension beyond the aforesaid 6 months, for adversely affected projects, concerned promoters will have to apply in accordance with provisions of Section 6. MahaRERA may at its discretion waive the fee for such extension due to force majeure in accordance with rule 7 of Maharashtra Real Estate Registration Rules, 2017.
• The time limits for compliance under Section 11, which become due anytime during force majeure period, stand automatically extended for a period till the expiry of force majeure period.
• The Force Majeure period will be treated as a “moratorium period” for the purpose of calculating interest under section 12, 18 19(4) and 19(7) of the Act.
• The work of registration of sale documents has been adversely affected due to non-functioning of the offices of the Sub-Registrar. Therefore, any registration of agreement for sale, which becomes due during the force majeure period under Section 13 of the Act, can be registered in a period extending till the expiry of force majeure period.
• The dates of possession mentioned in already registered agreements for sale, shall be deemed to be extended by the Force Majeure period.
• Due to non-functioning of the concerned offices, the work of transfer of title and conveyance has been adversely affected. Therefore, any compliance under Section 17 that becomes due during the Force Majeure period is allowed to be completed in a period extending till the expiry of the force majeure period.
• In the Neel Kamal Realtors Suburban Pvt. Ltd. and anr. Vs Union of India and Others, the Hon’ble Bombay High Court division bench in para 115 of its order has observed that the object and purpose of the Real Estate (Regulation and Development) Act, 2016 is to complete the development work within the stipulated time. Keeping in view the spirit of this order and to ensure that the available liquidity in the designated RERA Accounts get utilized, on priority, for completion of the project, any refund, which under rule 19 of MahaRERA Rules becomes due during the Force Majeure period is allowed to
be executed in a period extending up to one month after the expiry of the Force Majeure period.
• Similarly, any amount, which under Section 40 of the Act becomes payable during the Force Majeure period, shall be recovered after the expiry of the Force Majeure period.

Agriculture plots are out of RERA’s jurisdiction: MREAT

 

BY SRELJ Bureau

In a landmark judgement, Maharashtra Real Estate Tribunal ruled that Agriculture lands which have not received Non Agriculture permissions, do not fall under the jurisdiction and need not register with RERA Authorities.

Hearing an appeal in the matter of Mohammed Zain Khan vs Emnoy Properties India, Hon’ble Tribunal have upheld that Agriculture land and plot which have not received NA permissions are not Real Estate Projects and hence should not be registered.

The Hon’ble Tribunal observed ” We find that by applying the above observations to the facts of the case in hand, the Authority observes in para 10 of the order that the land under this Project is admittedly an agricultural land and till date no N.A. permission or order is granted by competent Authority to develop the same. Consequently, the Authority has held that the subject project is not a real estate project as defined under Section 2(zn) of the Act and the same cannot be registered under Section 3 of the Act. ”

The Hon’ble Tribunal further added: “We have given a thoughtful consideration to the relevant provisions of the Act. In our view the real estate project as defined under Section 2(zn) contemplates development of land into plots or apartments. In case of an agricultural land, as is the case in the instant appeal, to be designated as a real estate project, necessary permissions are required to effect the development of the said land. Compliance of such a requirement also seems essential from the perspective of provisions under Section 11(4) detailing therein the obligations of a promoter and Section 4 for mandating the requirements of certain documents/ permissions necessary for registration of the project under Section 3 of the Act. In this regard, we note that Complainant has utterly failed to establish that the said land had all necessary N.A. or other permissions for its development and for undertaking its registration as real estate project under the Act.”

 

 

RERA Compliance extended to three months including project completion date : MAHA RERA

By Legal Bureau

Maharashtra RERA authority have extended all compliance and date of completion which were falling in March, April and May 2020 till 30th June 2020. In an order 13/2020 dated 2nd April 2020, the Authority have extended all compliance till 30th June 2020. The Order said “For all MahaRERA Registered projects where completion date, revised completion
date or extended completion date expires on or after 15th March 2020, the period of
validity for registration of such projects shall be extended by three months.
MahaRERA shall accordingly issue project registration certificates, with revised
timelines for such projects, at the earliest.”

The Order further state that : “Further, the time limits of all statutory compliance in accordance with the Real
Estate (Regulation and Development) Act, 2016 and the rules and regulations made
there under, which were due in March / April / May are extended to 30th June 2020.”

It means that all the completion dates falling in March, April and May 2020 are automatically extended till 30th June 2020. Also the Authority shall issue a new revised project registration certificate. For all the compliance such as Form 1, 2 and 3 the same is extended till 30th June 2020.

Download Order here: MAHARERADelay

Violating Consent Terms filed in RERA is Tantamount to Unfair Trade Practice : MAHA RERA

By SRELJ Bureau

Jalala Menanon V/s Ayyas Abdul Sayyed (CC006000000000827) Order by Full Bench dated: 13th December 2017, Full Bench.

The Complainant alleges that she booked Row house No.1 in Cluster No.6, Spanish Residency situated at Naigaon. On the cancellation of the allotment, the Respondents were liable to refund her money. A settlement was arrived at between the parties and respondents agreed to refund Rs.19,50,000/- by issuing post-dated cheques. The respondents stopped the payment of the cheque dated 19.09.2017 of Rs.3 lakhs and also refused to honour the other cheques. It is her allegation that this practice adopted by the Respondents is an unfair practice and it also amounts to a fraudulent act which attracts Section 7 (f) (c) & (d) of Real Estate (Regulation & Development) Act, 2016.

The Learned Advocate of the Respondents submits that the settlement was arrived at under coercion of the Police in the Police Station and, therefore they issued the cheques. Hence, the Respondents requested to absolve them from honouring the cheques. After considering the submission of the Respondents carefully, it has come to the notice of Maha RERA that there is no dispute between the parties that Rs.19,50,000/- is due from Respondents to the complainant and therefore the Respondents agreed to repay it by issuing post-dated cheques. The Authority does not think it fit to reopen the issue of Respondents’ liability as the Respondents themselves have arrived at the settlement to pay the Complainant Rs.19,50,000/-.

Maha RERA Observed: it is very unfortunate that even after arriving at the settlement and after issuing post-dated cheques, the Respondents want to avoid their liability to honour the cheques on one ground or the other. It also becomes clear from the facts and circumstances of the case that the matter was referred to the Police and then mostly in order to avoid the prosecution and arrest the Respondents agreed to repay the money.

Now they cannot take a somersault and contend that they were under coercion when they settled the matter. They have not complained to any superior officer of police that they were compelled and forced to settle the dispute and issue the cheques. Therefore, Maha RERA does not find any substance in this submission’ Maha RERA is of the opinion that this amounts to unfair practice and fraudulent act also. Section 7 of Act empowers the Authority to revoke the Registration project if such unfair practice or indulgence of the promoter in fraudulent acts are noticed. We feel another opportunity may be given to the Respondents to honour the cheques issued by them and to warn them that if they indulge in such unfair practice or fraudulent acts, Maha RERA shall not hesitate to take stern action against them including the action o{ revocation of registration of their project.

Society is a promoter for redevelopment project: MAHA RERA

By SRELJ 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.
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