MahaREAT Says RERA Has No Jurisdiction Over Banks Lending to Homebuyers, Refuses to Stay SARFAESI Recovery

Case Title: Kamlesh Valji Balsara & Anr. v. M/s Shree Siddhivinayak Infrastructure and Realty & Ors.
Case No.: Appeal No. AT06/01035/2025 and connected appeals

The Maharashtra Real Estate Appellate Tribunal (MahaREAT) has held that the RERA authorities do not have jurisdiction to adjudicate disputes between homebuyers and financial institutions that have extended loans to the homebuyers.

The Tribunal consequently declined to stay recovery proceedings initiated against the homebuyers under the SARFAESI Act, 2002, while restraining the promoter from creating third-party rights in the flats concerned.

Dispute Arising From Subvention Scheme

The appeals arose from disputes involving Kamlesh Valji Balsara and other homebuyers and Shree Siddhivinayak Infrastructure and Realty.

The homebuyers had booked flats in the developer's project under a subvention scheme, under which the promoter was required to bear the pre-EMI obligations until possession of the flats was handed over.

To finance their purchases, the homebuyers obtained loans from a non-banking financial company. The loans were subsequently assigned to an asset reconstruction company.

After the project was delayed and the promoter allegedly failed to fulfil its obligations under the subvention arrangement, recovery proceedings were initiated against the homebuyers under Section 13(2) of the SARFAESI Act.

Homebuyers Approached MahaRERA

The homebuyers had separately approached the Maharashtra Real Estate Regulatory Authority alleging delay in possession and seeking appropriate relief against the promoter.

By a common order dated July 31, 2025, MahaRERA allowed their complaints and directed the promoter either to refund the amounts with interest or pay interest for the delay in possession.

The homebuyers thereafter approached MahaREAT in connection with the recovery proceedings initiated by the financial institutions.

Tribunal Holds RERA Cannot Adjudicate Claims Against Lending Institutions

MahaREAT declined to interfere with the recovery action undertaken by the financial institutions.

The Tribunal distinguished cases where a financial institution lends money directly to a promoter. In such circumstances, RERA authorities may have jurisdiction in appropriate cases, including situations where a lender steps into the shoes of the promoter following a default.

The Tribunal noted that the present case was different because the loans had been advanced to the allottees and not to the promoter.

It therefore held that the contractual arrangements between the homebuyers, promoter and lending institution could not be enforced under the provisions of the RERA Act.

SARFAESI Recovery Not Stayed

The Tribunal consequently refused to grant a stay against the recovery proceedings initiated by the financial institutions under the SARFAESI Act.

However, while declining to interfere with the recovery action, MahaREAT directed that the promoter should not alienate the flats or create any third-party rights in respect of the properties involved until final disposal of the appeals.

RERA Remedy Against Promoter Distinct From Bank Recovery

The decision draws a distinction between remedies available to homebuyers against a real-estate developer under RERA and disputes arising from their independent loan arrangements with financial institutions.

While the homebuyers could pursue their RERA remedies against the promoter for issues such as delayed possession, the Tribunal held that the RERA framework could not be used to adjudicate or restrain contractual recovery proceedings undertaken by lenders against the borrowers.

Key Takeaway

The ruling reinforces the jurisdictional limits of RERA authorities in disputes involving home-loan lenders and borrowers. Where the loan has been advanced to the homebuyer rather than the promoter, disputes arising from the lending arrangement cannot ordinarily be enforced through RERA proceedings.

At the same time, the Tribunal's direction restraining the promoter from creating third-party rights in the flats preserves the homebuyers' interests in the underlying real-estate dispute while the appeals remain pending.

MahaREAT Rejects 266-Day Delay Condonation Plea, Holds Litigant Cannot Shift Entire Blame to Advocate

 

MahaREAT Rejects 266-Day Delay Condonation Plea, Holds Litigant Cannot Shift Entire Blame to Advocate

Case: Shashank Vengasarkar & Anr. v. Larsen & Toubro Ltd.
Case No.: M.A. No. 1357/26 (Delay) in Appeal No. AT06/00334/2026
Arising from: Complaint No. CC006000000354526
Forum: Maharashtra Real Estate Appellate Tribunal (MahaREAT)
Decision: 10 September 2026

Background

The appellants were homebuyers who had purchased a flat from Larsen & Toubro Ltd. under an Agreement for Sale dated 7 December 2016. Possession was handed over on 20 July 2018. They subsequently filed a complaint before MahaRERA seeking interest for alleged delay in possession.

MahaRERA dismissed their complaint on 3 April 2025. The limitation period for filing an appeal expired on 2 June 2025, but the appellants filed the appeal only on 23 February 2026, resulting in a 266-day delay.

Grounds for seeking condonation

The homebuyers submitted that:

• they had not received the email communicating the MahaRERA order;

• they came to know about the order only on 17 February 2026, when they met their advocate after returning to India;

• they were residing outside India for substantial periods; and

• their earlier advocate had failed to properly follow up on the proceedings.

They therefore sought condonation of the 266-day delay. 

Finding of MahaREAT

MahaREAT rejected the application.

The Tribunal held that a litigant cannot place the entire responsibility for the conduct of litigation upon an advocate. A party is expected to remain vigilant regarding proceedings initiated by them and cannot rely entirely upon the advocate to monitor the case.

The Tribunal found that the circumstances relied upon by the appellants—including their residence outside India and alleged difficulties in communicating with their advocate—did not adequately explain such an inordinate delay.

The Tribunal further observed that negligence, inaction or lack of due diligence cannot constitute sufficient cause merely because a liberal approach is generally adopted while considering applications for condonation of delay.

Important legal principle

The Tribunal relied upon decisions including Rajneesh Kumar v. Ved Prakash, S.R. Vediappan v. S.P. Ramalingam, State of Madhya Pradesh v. Ramkumar Choudhary and Pathapati Subba Reddy v. The Special Deputy Collector, reiterating that condonation of delay requires a satisfactory explanation demonstrating sufficient cause and reasonable diligence.

Conclusion

The 266-day delay was not condoned, and the application filed by the homebuyers was dismissed.

Key RERA proposition:

A litigant seeking condonation of substantial delay cannot attribute the entire lapse to the advocate; the party must demonstrate reasonable diligence and provide a convincing explanation constituting sufficient cause for the delay.

Builder Cannot Terminate Allotment for Non-Payment Without First Executing and Registering Agreement for Sale: MahaREAT

 

Builder Cannot Terminate Allotment for Non-Payment Without First Executing and Registering Agreement for Sale: MahaREAT

Case: Manojkumar Singh v. Era Realtors Pvt. Ltd.
Appeal No.: AT006000000204882 of 2024
Arising from: Complaint No. CC006000000282178 of 2019
Forum: Maharashtra Real Estate Appellate Tribunal (MahaREAT)
Decision: 7 September 2026
Citation: 2026 LLBiz REAT (MH) 65

The dispute concerned a homebuyer whose allotment was terminated by Era Realtors Pvt. Ltd. on the ground of non-payment. MahaREAT held that the promoter could not rely upon the allottee's alleged default when the promoter itself had failed to comply with the statutory requirement under Section 13 of the RERA Act.

Key issue

Section 13 of RERA prohibits a promoter from accepting more than 10% of the cost of the apartment, plot or building as advance/application fee without first entering into a written Agreement for Sale and registering it under the applicable law.

The Tribunal found that the promoter had accepted amounts exceeding the statutory 10% threshold but had not executed and registered the Agreement for Sale.

Finding of MahaREAT

The Tribunal held that a promoter cannot terminate an allotment for alleged non-payment when the promoter itself has failed to execute the Agreement for Sale, as required under Section 13.

In other words, the promoter cannot simultaneously:

• accept more than 10% of the consideration without a registered Agreement for Sale;

• fail to comply with Section 13; and

• thereafter rely upon the allottee's failure to make further payments to terminate the allotment.

The Tribunal further held that the promoter's continuing failure to execute the Agreement for Sale amounted to a violation of Section 13 and constituted an unfair trade practice, attracting penalty under Section 61 of RERA.

Relief granted

MahaREAT allowed the homebuyer's appeal, set aside the MahaRERA order and directed the promoter to:

• refund ₹80.77 lakh to the homebuyer;

• pay interest on ₹1.008 crore at 2% above SBI's highest MCLR for the specified period;

• pay interest on the balance refund amount for the subsequent period up to the date of the order;

• pay a ₹10 lakh penalty under Section 61 for violation of Section 13; and

• pay ₹50,000 as costs.

Important RERA proposition

A promoter cannot take advantage of an allottee's alleged payment default to terminate the allotment when the promoter itself has failed to execute and register the Agreement for Sale after accepting more than 10% of the consideration, in violation of Section 13 of RERA.

This judgment is particularly relevant for cases involving cancellation/termination of allotment, payment defaults, Section 13 compliance, and the promoter's obligation to execute a registered Agreement for Sale.

MahaREAT Allows Homebuyers to Withdraw Statutory Pre-Deposit in Cases of Prolonged Possession Delay and Financial Hardship

MahaREAT Allows Homebuyers to Withdraw Statutory Pre-Deposit in Cases of Prolonged Possession Delay and Financial Hardship

Case Title :  Neelkamal Realtors Suburban Pvt. Ltd. v. Ketan Ashokrao Nage & Connected Matters Case Number :  M.A. Nos. 1123/26, 1723/26, 1178/26, 1124/26, 1125/26, 691/26 & 712/26 in connected appeals

The Maharashtra Real Estate Appellate Tribunal (MahaREAT) has permitted two homebuyers to withdraw amounts deposited by the promoter, Neelkamal Realtors Suburban Pvt. Ltd., towards the mandatory pre-deposit required for its appeals under Section 43(5) of the Real Estate (Regulation and Development) Act, 2016 (RERA).

The Tribunal, comprising Justice S.S. Shinde, Chairperson, and Shrikant M. Deshpande, Administrative Member, considered applications filed by eight homebuyers seeking withdrawal of amounts deposited by the promoter pursuant to the orders passed by the MahaRERA.

The underlying proceedings arose from a MahaRERA order dated 8 May 2025, whereby the promoter was directed, inter alia, to pay interest to several homebuyers for delay in handing over possession from the respective contractual possession dates until the date of possession along with the Occupancy Certificate. Refunds were also directed in respect of certain homebuyers.

The promoter challenged the MahaRERA order before MahaREAT and deposited the amounts required under Section 43(5) of RERA as a condition for maintaining the appeals.

The homebuyers thereafter sought withdrawal of the amounts deposited in the respective appeals. While six applications were rejected, MahaREAT allowed the applications of two homebuyers on account of the exceptional financial hardship caused by prolonged delay in possession.

In one case, the Tribunal noted that the project had remained incomplete for more than four years, requiring the homebuyer to continue residing in rented accommodation while simultaneously servicing the home loan. The Tribunal observed:

“While applicant is paying EMIs the applicant is also required to pay the rental amount for rented accommodation. We are of the view that this has been causing great hardship to the applicant.”

The promoter contended that payment of EMI was an obligation that would have continued even after possession and, therefore, could not constitute a sufficient ground for release of the pre-deposit. The Tribunal, however, accepted the homebuyer's contention regarding the combined burden of EMI and rent arising from the prolonged delay in possession.

In the second case, possession was contractually due by 31 December 2014. The homebuyer had already paid approximately 92.8% of the consideration through an HDFC Bank loan and had been bearing the burden of both EMI payments and rent for approximately 10 years. MahaREAT considered the prolonged delay and the resulting financial hardship sufficient to justify release of the deposited amount.

Accordingly, the Tribunal permitted withdrawal of ₹12,33,145 and ₹53,99,195, respectively, together with accrued interest.

At the same time, MahaREAT emphasised that the statutory pre-deposit ordinarily remains custodia legis, i.e. in the custody of the law, during the pendency of the appeal. Mere pendency of an appeal does not ordinarily entitle a homebuyer to withdraw the amount. The Tribunal held that exceptional or compelling circumstances must be demonstrated.

Thus, applications based merely on general financial difficulties, investment of life savings or alleged financial losses were not accepted where the grounds were considered generic. Similarly, where appeals had been dismissed but the applicants failed to establish a specific compelling circumstance warranting release, the amounts were not permitted to be withdrawn.

The withdrawals in the two successful cases were also made subject to an undertaking by the homebuyers to refund the amounts with interest if the promoter ultimately succeeds in the appeals.

Key Principle

The decision indicates that while the Section 43(5) pre-deposit is ordinarily protected during the pendency of an appeal, MahaREAT may permit its withdrawal in exceptional cases where prolonged delay in possession creates demonstrable and continuing financial hardship, particularly where the homebuyer is compelled to bear both housing-loan EMIs and rent for an extended period.

Importantly, the Tribunal did not treat financial hardship as an automatic ground for release. The distinction drawn was between generic financial hardship and circumstances demonstrating a specific, prolonged and continuing hardship attributable to delayed possession.

If you are preparing this for a RERA case-law compilation/commentary, I can also convert it into a concise “Held / Ratio / Key Takeaway” case-note format, including the case title, appeal/application numbers, date of judgment and relevant statutory provisions.

Maharashtra REAT Imposes Penalty Equivalent to 2% of Project Cost on RA Associates for Altering Project Plan Without Allottees’ Consent

Case Title: RA Residences Co-operative Housing Society Ltd. v. RA Associates & Ors.
Case No.: Appeal No. AT06/00804/2025
Date of Decision: 16 September 2026
Forum: Maharashtra Real Estate Appellate Tribunal (MahaREAT)

The Maharashtra Real Estate Appellate Tribunal (MahaREAT), by its judgment dated 16 September 2026, imposed a penalty equivalent to 2% of the project cost upon RA Associates and its partners, the promoters of the “RA Residences” project in Mumbai, for altering the disclosed project plans and increasing the Floor Space Index (FSI) of the commercial building without obtaining the requisite prior consent of the allottees.

A Bench comprising Chairperson Justice S.S. Shinde and Administrative Member Shrikant M. Deshpande further directed the promoters to execute the conveyance of the residential building within 60 days. The Tribunal held that a promoter cannot indefinitely defer conveyance on the ground that additional FSI or Transferable Development Rights (TDR) may become available in the future.

The Tribunal observed:

“...In fact, once the FSI available in the project property is exhausted, the promoters are obligated to execute the conveyance and are not entitled to any further FSI, if available, due to change in policy within the property or procured from elsewhere.”

Background

The dispute arose in relation to the “RA Residences” project in Mumbai, comprising residential Wings A and B and a separate commercial/IT building. The promoters had initially proposed to complete the project by 30 June 2018, following which the registration of the project was extended by the Maharashtra Real Estate Regulatory Authority (MahaRERA).

Part occupation certificates for the residential wings were obtained on 23 June 2020, 15 December 2020 and 9 December 2021, while the housing society was registered on 18 October 2022.

The society subsequently approached MahaRERA alleging, inter alia, that the promoters had:

• materially altered the sanctioned and disclosed plans;

• utilised additional FSI without obtaining the requisite consent of the allottees;

• altered common and recreational areas;

• failed to execute the conveyance; and

• failed to hand over project documents, amenities and other facilities.

MahaRERA, by its order dated 7 July 2025, partly allowed the complaint and held that the promoters had violated Section 14(2) of the Real Estate (Regulation and Development) Act, 2016, which requires the prior consent of at least two-thirds of the allottees for specified alterations or additions to sanctioned plans.

The society thereafter preferred an appeal before MahaREAT seeking further reliefs.

Alteration of Plans Without Consent

Before the Tribunal, the promoters contended that the residential buildings had been completed in accordance with the sanctioned plans and that occupation certificates had been obtained. They further relied upon the agreements for sale, contending that the contractual arrangements contemplated separate residential and commercial structures and permitted development through additional FSI/TDR.

The Tribunal, however, held that the promoters had violated Section 14 of RERA by altering the disclosed sanctioned plans without obtaining the requisite consent of the allottees.

The Tribunal also found violations of Section 11 of RERA, which prescribes the promoter's statutory obligations, including obligations concerning conveyance.

Consent Under RERA and MOFA Cannot Be Contractually Dispensed With

The Tribunal additionally held that the promoters had violated Section 7 of the Maharashtra Ownership Flats Act (MOFA), which requires the consent of flat purchasers for additions or alterations to the structure disclosed to them.

In particular, the Tribunal noted that construction of the commercial C-Wing under the revised 2021 plan required the consent of two-thirds of the allottees.

Significantly, it rejected the promoters' reliance upon deemed-consent clauses contained in the agreements for sale, observing:

“the deemed consent in the clauses of the agreements for sale is not the consent within the meaning of consent under section 7 of MOFA or section 14 of RERA.”

Thus, contractual provisions cannot be treated as a substitute for the statutory consent contemplated under RERA and MOFA.

Additional FSI/TDR and Entitlement of the Societies

The Tribunal further held that the additional FSI/TDR utilised by the promoters, but not disclosed in the 2017 plan, belonged to the societies representing the residential and commercial buildings of the project.

The Tribunal therefore directed proportionate apportionment of the sale proceeds generated from commercial units constructed by utilising the additional 4,225.57 square metres of FSI.

The finding assumes significance in the context of the promoter's rights over additional development potential after the disclosure of the original project plans and the rights of the allottees/societies in such additional development potential.

Conveyance Cannot Be Deferred Indefinitely

Since Wings A and B had received occupation certificates and possession had been handed over to the respective allottees, the Tribunal directed the promoters to complete the conveyance of the residential building.

It specifically rejected the proposition that conveyance could be postponed merely because additional FSI or TDR might become available in the future. The Tribunal held that once the FSI available in the project property has been exhausted, the promoters are required to execute the conveyance and cannot retain rights over future FSI merely because of a subsequent change in policy or because additional FSI/TDR may be procured from another source.

Accordingly, the promoters were directed to convey the residential building's proportionate interest in the project property, together with the relevant common areas and amenities, within 60 days.

Maintenance, Clubhouse and Corpus Fund

The Tribunal also considered amounts collected by the promoters towards maintenance charges, clubhouse charges and corpus fund.

Since the residential buildings had been completed and possession had been handed over, MahaREAT directed the promoters to furnish audited accounts of the amounts collected under these heads.

The Tribunal observed:

“Since the residential building (wing 'A' and wing 'B') is completed with occupation certificate and the allottees have taken the possession of their respective flats, we deem it appropriate to direct the promoters to provide audited accounts of the amounts collected under agreements towards maintenance charges, clubhouse charges, and corpus fund and refund the amount as per the audited accounts to the appellant with accrued interest on the said amount, if kept in a separate account.”

The promoters were consequently directed to refund the balance amount to the society, along with accrued interest wherever applicable.

Other Directions

MahaREAT further directed the promoters to:

1. hand over the remaining 64 guest parking spaces;

2. execute the conveyance of the residential building's proportionate interest in the project property;

3. hand over the relevant common areas and amenities;

4. furnish audited accounts concerning maintenance, clubhouse and corpus-fund collections; and

5. refund the balance amounts to the society with applicable interest.

The issues relating to incomplete works, repairs, deficiencies in services and rectification of defects were remanded to MahaRERA for fresh adjudication.

Key Takeaway

The decision reiterates that the promoter's contractual rights under an agreement for sale do not override the statutory protections afforded to allottees under RERA and MOFA. Alterations to disclosed plans and structures requiring statutory consent cannot be justified merely by relying upon deemed-consent clauses in agreements for sale.

The ruling also emphasises that future availability of FSI/TDR cannot be used as an indefinite ground to postpone conveyance once the relevant project development has reached the stage where conveyance is required. Further, where additional development potential is utilised in a manner not disclosed in the original project plan, the Tribunal may examine the consequential rights of the societies/allottees in the benefits arising from such additional development.

MAHA AT - The Total Amount For Making deposit by Appellant promoter towards compliance of the proviso to Section 43 (5) of the Act will Include amounts received by the promoter directly from complainant as well as the amounts received from the financier out of the loan sanctioned under the subvention scheme.

The Total Amount For Making deposit by Appellant promoter towards compliance of the proviso to Section 43 (5) of the Act will Include amounts received by the promoter directly from complainant as well as the amounts received from the financier out of the loan sanctioned under the subvention scheme.

MB6 Residency Private Limited V/S Ketan Kataria & L & T Finance Holdings Ltd. Appeal No. AT006000000174630 of 2023 Before the Maharashtra Real Estate Appellate Tribunal Mumbai Decided in 18th July 2024

Fact of the main Complaint CC006000000054749 :-

• On 9th June 2018, The Original Allottees filed the captioned complaint before MahaRERA  seeking inter alia for refund of the entire money paid to promoter together with interest on the grounds as set out in the complaint.
• On 24tn February 2022, Upon hearing the parties, learned Member, MahaRERA has passed the impugned order whereby it directed appellant promoter inter alia to refund the entire amounts of Rs. 1,90,28,2751/- paid by complainant together with interest over it.
• On date 20th July 2023, Subsequently, the application filed by Appellant/promoter to review the order  was also disposed of by MahaRERA by dismissing the review application.
• Executing Authority issued recovery warrant of Rs.3,48,40,409/- towards the refund of Rs.1,90,28,275/- being the paid Principal amount by complainant to promoter and Rs.1,58,12,134/- being the interest till 30th January 2024.

Fact of the Appeal:-

• Aggrieved appellant/promoter has preferred the instant appeal before this Tribunal seeking inter alia to quash and set aside these two orders, dated 24th February 2022 and 20th July 2023 passed by MahaRERA.
• In view of both the said impugned orders, promoter  pre deposited Only Rs.85,22,583/- in the Tribunal on 24.05.2024 towards the  compliance of the proviso to Section 43(5) of the Act. 
• This Amount included the Amount of Rs.53,23,433/- deposited by the Allottee Plus interest over it and did not include the amount of Rs.1,36,30,530/- which it received from the Banking Partner L & T Finance Holdings Ltd as the Subvention payment.

The Appellate Authority Framed the following Question(s) for consideration:-

Whether the total amounts received by the promoter, i.e directly from complainant as well as the amounts received from the financier out of the loan sanctioned under the subvention scheme be accounted for making deposit by Appellant promoter towards compliance of the proviso to Section 43 (5) of the Act based on the impugned orders passed by the MahaRERA?

Observations made by the Hon’ble Court:-

• Payments for the costs of the subject flat have been made from two sources 
• (a) by the complainant himself directly to appellant and 
• (b) Payments made by the financier to the promoter on behalf of and in the name of the complainant under the said subvention scheme from out of the loan sanctioned to complainant borrower.
• Reliance was made on M/s Newtech Promoters and Developers Pvt. Ltd Vs, State of UP & ors. [civil Appeal Nos.6745-6749 of 2021]
• The provisions of Section 43(5) also stipulate for pre deposit of the entire amounts received from all the sources without making any distinction of the amounts paid to the promoter, whether amounts are received directly or indirectly or from different sources directly or indirectly or through different financial products/ instruments etc.
• The Complainant is the primary borrower to whom, the subvention loan has been sanctioned to the complainant (borrower) for funding the subject flat under the subvention scheme and this loan amount has been disbursed to promoter for and on behalf of as well as in the name of the complainant. Therefore, the complainant has the primary responsibility for repayment of the outstanding loans.
• Tribunal is expected to direct promoter to first deposit the total amount to be paid to the allottee and these pre-deposits are sine qua non before the said appeal be admitted and entertained for further consideration on merits.

Court’s Order:-

Appellant promoter is being directed once again as last chance to pre-deposit the entire amounts received from both the sources (A and B), i.e. total amounts received from the respondent no. 2, financier under the subvention scheme and also the amounts received directly from respondent no. 1 together with interest on the entire amounts.

MAHAREAT -When the Allottees asked the promoters to enter into an agreement for sale but the Promoters did not reply and did not enter into an agreement for sale thereupon Article 54 of Limitation Act, 1963 will not apply and also when the project is ongoing Section 22 of the Limitation Act, 1963 will be applied being continuing breach of contract.

When the Allottees asked the promoters to enter into an agreement for sale but the Promoters did not reply and did not enter into an agreement for sale thereupon Article 54 of Limitation Act, 1963 will not apply and also when the project is ongoing  Section 22 of the Limitation Act, 1963 will be applied being continuing breach of contract

M/s, Reddy Builders & Developers & ors V/s Hari Shankar Kankani & ors.

Appeal No, AT00600000053249/2021 in Complaint No. CC006000000195966 BEFORE THE MAHARASHTRA REAL ESTATE APPELLATE TRIBUNAL, MUMBAI

Fact of the main Complaint CC006000000195966:-

• Somewhere in the year 2005, The Respondents Allottees had booked a 3BHK flat under a pre-launched scheme in the project "Oregon" in Goregaon ,Mumbai undertaken by Appellants for a total consideration of Rs.38,99,740/-
• The Respondents Allottees paid an amount of Rs.6,90,000/- as booking amount which is more than 10% of the total consideration.
• The Appellant Company Reddy Builders issued allotment letter-cum-receipts to Allottees.
• The Allottees were continuously insisting the Promoters to execute the agreement for sale. Despite continuous follow-up of Allottees the Promoters conveniently avoided to execute the agreement for sale.
• The Appellant Company Reddy Builders agreed to handover the possession of the said flat to Allottees by 2012.
• However Till 2009, the Construction was not commenced due to some issue with slum dwellers.
• somewhere in the year 2021 ,being dissatisfied with the conduct of the Promoters, the Allottees filed Complaint No.CC006000000195966 and sought relief under Section 13 of the RERA Act,2016.
• The Appellant Company Reddy Builders appeared in the Complaint and remonstrated the Complaint by filing written submissions contending therein that the Complaint is liable to be dismissed primarily on following grounds viz; 
• (i) there ls no cause of action 
• (ii) the alleged transaction took place prior to RERA coming into force 
• (iii) the Complaint is not maintainable for want of proper pleadings 
• (iv) the Allottees are guilty of delay and latches 
• (v) the Complaint is hopelessly barred by the law of limitation.
• On 19/04/2021 After hearing the parties learned Authority disposed of the Complaint by directing the parties as under:
• a. If the Complainants are willing to seek refund of their money, the Respondent No.1 is directed to refund the entire money paid by the Complainants along with interest as prescribed under RERA and relevant rules made thereunder.
• b. If the Complainants are willing to be in the project the Respondent is directed to allot the flat having equivalent area as booked by the Complainants. An agreement for sale may be executed in accordance with the provisions of RERA and the relevant rules."
• Being aggrieved by the Order of  MahaRERA  the Appellants, who are Promoters, have preferred the captioned Appeal

The Authority Framed the following Question(s) for consideration:-

            Whether the Complaint is barred by the law of limitation?

Observations made by the Hon’ble Court:-

• It is not in dispute that after 2006 there was no correspondence between the parties till 2019.
• By the letters in 2019 & 2020 the Allottees asked the Promoters to enter into an agreement for sale.
• It is not in dispute that the Promoters have not replied the said letters.
• Article 54 of Limitation Act, 1963 speaks about the period of limitation for seeking specific performance of contract.
• There is limitation of three years for seeking relief of specific performance of contract.
• The period of limitation begins to run when the date fixed for performance, or, if no such date is fixed it begins when the plaintiff has noticed that performance is refused.
• In the instant case, there is no date fixed for performance of contract,
• As indicated above, by the letters, the Allottees have asked the promoters to enter into an agreement for sale. Promoters did not reply the said letters nor entered into an agreement for sale, It means the Allottees have noticed that performance of contract is refused by the promoters.
• it is not in dispute that the Promoters have commenced construction of the subject project somewhere in 2015-2016.
• Since it was an ongoing project, the Promoters have registered the project with MahaRERA and declared the date of completion of project as 31.07.2027,It means there is continuous cause of action.
• Section 22 of the Limitation Act, 1963 provides for the computation of limitation in the case of continuing breach of contract or tort. It provides that in case of a continuing breach of contract, a fresh period of limitation begins to run at every moment of time during which the breach continues.
• it relied on  Samruddhi Co-operative Housing Society Limited. Vs. Mumbai Mahalaxmi Construction Private Limited  Civil Appeal No 4000 of 2019 before the Supreme Court of India.

Court’s Order:-

Complaint is not barred by the law of limitation

BOMBAY HIGH COURT Allowed the refund of Stamp Duty, even when the Agreement for Sale was not cancelled within the five years of the execution giving the rational that an act of Court shall prejudice no man and the law does not compel a man to do what he cannot possibly perform.

Satish Buba Shetty v/s Inspector General of Registration and Collector of Stamps and Others

WRIT PETITION NO.9657 OF 2022

Decided on JANUARY 11, 2024

IN THE HIGH COURT OF JUDICATURE AT BOMBAY 

Fact of the Case:- 

1. On 10/11/2014 the Petitioner Purchased a flat in a building known as “ERA” of the M/s. Vijaykamal Properties Private Limited (the Developer.)
2. The Total Cost of Flat was Rs. 95 lakhs and the Petitioner paid 25% of it to the developer
3. On 19/11/2014 The Agreement to sale was duly registered with the Registrar of Assurances.
4. The stamp duty of Rs. 4,76,000/- was paid to the Exchequer.
5. The Developer had agreed to deliver possession of the flat by 30/06/2017. 

Time line of the Matter :-

1. On the Default of Developer in providing the Possession, the Petitioner filed the case in MahaRERA. 
2. On Date 26/12/2017 MahaRERA directed the the Developer to refund the amount and execute a Deed of Cancellation.
3. On the Non Compliance of the MahaRERA Order the petitioner filed an Execution Application u/s 63 of RERA Act, 2016. 
4. On Date 13/03/2018 MahaRERA imposed the penalty of Rs. 5,000/- per day on the Developer till the compliance of the order.
5. The Developer preferred an appeal before MahaRERA Appellate Tribunal (MREAT).
6. On 21/08/2018 the MREAT stayed the MahaRERA's order but subject to the Submission of 50% of the due amount plus interest, by the developer. 
7. The Developer defaulted on the Order of MREAT.
8. On Date 16/10/2018 MREAT dismissed the Developer's Appeal for want of compliance of order.
9. The petitioner filed for execution before the MREAT.
10. The Developer and the petitioner arrived at a settlement and Developer refunded the full amount by 22/02/2021.
11. On 09/03/2021 the Deed of Cancellation was executed by the petitioner.
12. On 19/03/2021 the Execution Application  was disposed off by the MREAT.
13.  On 31/03/2021 the petitioner applied to Collector of Stamps, Borivali for refund of Rs. 4,76,000/- paid as stamp duty. 
14. On 27/04/2021 the Collector of Stamps, Borivali declined to refund the stamp duty u/s 48(1) of the Stamp Act, 1958 holding that as Agreement for Sale was not cancelled within the five years of the execution.
15. The petitioner preferred an appeal before the Chief Controlling Revenue Authority. 
16. On 09/02/2022, in Appeal No. 111 of 2021 the Chief Controlling Revenue Authority also dismissed the petitioner's appeal u/s 53(1A) Stamp Act, 1958 holding that  the registered instrument was cancelled beyond five years of its execution.  
17. This petition filed this writ under Article 227 of the Constitution of India, on the legality, propriety and correctness of the impugned order.

Submissions by Appellant:-

1. The impossibility of performance of the condition within the period stipulated by the proviso was not properly appreciated by the authorities under the Stamp Act, 1958. 
2. A genuine claim of a bonafide Senior Citizen home buyer, was unjustifiably rejected by the authorities.

Submissions by Respondent:-

1. The petitioner had obtained the entire benefit under the Agreement for Sale.
2. The petitioner had never sought the cancellation of the agreement for sale within the period prescribed under the proviso to section 48(1) of the Stamp Act, 1958.
3. The Stamp Act, 1958 being a fiscal statute is required to be construed strictly.

Observations made by the Hon’ble Court:-

1. The Controversy at hand, is governed by the proviso to sub section (1) of section 48
2. The proviso to sub section (1) of section 48 thus envisages two time limits.
•  One, the registered Agreement for Sale must have been cancelled by another registered instrument within a period of five years of the execution of the Agreement for Sale.
• Two, the application for relief under section 47 be made within a period of six months from the date of registration of the Cancellation Deed.
3. In the case at hand, the authorities under the Act of 1958 have declined to grant the relief on the premise that there was non fulfilment of the first condition of cancellation of the Agreement for Sale within five years of its execution.
4. The submission of the petitioner  that there was, in a sense, an enforced impossibility of fulfillment of said stipulation cannot be said to be unworthy of consideration.
5. there was no indolence or other blameworthy conduct attributable to the petitioner.
6. The question that wrenches to the fore is, in such a situation, can a party who does all that which is in its control, be saddled with the consequence of non-compliance of a statutory prescription ?
7.  In my considered view, the answer has to be in the negative. 
8. The law recognizes impossibility of performance as a ground to relieve a person from forfeiture and penalty.
9. In the case of Shaikh Salim Haji Abdul Khayumsab v/s. Kumar and Others (2006) 1 Supreme Court Cases 46 the Supreme court recognized two maxims,
• “actus curiae neminem gravabit”; an act of Court shall prejudice no man. and 
• “lex non cogit ad impossibilia”; the law does not compel a man to do what he cannot possibly perform.
10. In the facts of the case, the first of aforesaid maxims may have an application in the context of the time which was consumed in prosecuting the remedies before the authorities under RERA. The petitioner could have compelled the Developer to execute the Deed of Cancellation if the transaction was not to materialize, only by invoking the remedies under the law. The time spent in pursuing legitimate remedies, in the absence of any bad faith or want of due diligence, can not be arrayed against the petitioner
11. Secondly, the petitioner could not have lodged a claim for refund of the stamp duty without there being a registered instrument to cancel the registered Agreement to Sale as Cancellation of earlier registered Agreement to Sale by another registered instrument is a prerequisite for the applicability of the proviso to sub section (1) of section 48.
12. Rajeev Nohwar vs. Chief Controlling Revenue, Authority Maharashtra State, Pune and Others 2021 SCC OnLine SC 863. was a case for refund of stamp duty which was purchased but no Agreement to Sale was executed. The Supreme Court found that the provisions of section 47 had no application to the facts of the said case. Yet, the Supreme Court allowed the application for claim for refund observing, inter alia, that a rejection of the application for refund would violate equity, justice and fairness where the applicant is made to suffer the brunt of judicial delay

Court’s Order:-

The petition stands allowed.

The order dated 9th February, 2022 passed by the Chief Controlling Revenue Authority, Maharashtra State, Pune and the order dated 27th April, 2021 passed by the Collector of Stamps, Borivali are quashed and set aside.

The claim for relief under section 47 of the Stamp Act, 1958 stands allowed.

In the Second Appeal , BOMBAY HIGH COURT upheld the Condonation of Delay granted by the MAHAREAT Stating that It is not unnatural for a flat purchaser, who had book the flat in 2011 and was yet to receive possession in 2018, to feel anxious especially when he was not permitted to inspect the flat.

In the Second Appeal , BOMBAY HIGH COURT  upheld the Condonation of Delay granted by the MAHAREAT Stating that It is not unnatural for a flat purchaser, who had book the flat in 2011 and was yet to receive possession in 2018, to feel anxious especially when he was not permitted to inspect the flat.

Lucina Land Developers Limited V/s Navin Kumar

SECOND APPEAL NO.585 OF 2020

Decided on 27 MARCH 2024

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

Question of Law framed in 2nd Appeal :-

“Whether the Appellate Tribunal was justified in condoning the delay of 395 days in filing the appeal by the original complainant (Respondent herein)?

Time line of the Matter :-

1. Respondent (Allottee) filed Complaint before the Maharashtra Real Estate Regulatory Authority, (Maharera) complaining non-delivery of possession within the agreed period and claimed interest under provisions of section 18 of the Maharashtra Real Estate (Regulation and Development) Act, 2016 (RERA).
2. On 13/12/2017 Maharera disposed of the complaint holding that the Allottee failed to establish that the Appellant did not complete the project or was unable to deliver possession of the Apartment in accordance with the Agreement and directed the Appellant to handover possession of the Apartment with occupancy certificate to Allottee before 31 December 2018, failing which the Appellant was directed to pay interest as per Rule 18 with effect from 1 January 2019 till the actual date of possession on the entire amount paid by the Allottee. 
3. On 11/01/2019 Allottee filed Appeal before the Maharashtra Real Estate Appellate Tribunal (Appellate Tribunal)  challenging the order along with an application seeking condonation delay in filing the appeal. 
4. On 19/08/2019 the Appellate Tribunal  allowed the application for condonation of delay.
5. The Appellant has filed this Second Appeal challenging the judgment and order dated 19th August 2019 passed by the Appellate Tribunal.

Fact of the Case :-

1. Allottee  purchased an apartment bearing No.203 in the project India bulls Greens-II situated at Panvel and Entered into Flat Buyer's Agreement on 18/10/2011.
2. As per the Flat Buyer's Agreement, possession was to be handed over within 60 months with grace period of 9 months.

Contentions of Appellant :-

1.  The Appellate Tribunal has committed a manifest error in condoning inordinate delay of 395 days in filing the Appeal.
2. Allottee  was not prevented by any disability or cause from filing the Appeal within the period of limitation.
3. Allottee took a false plea of heart disease, which was relatable to the year 2016.

Contentions of Respondent :- 

1. No substantial question of law is involved in the present Appeal as the impugned order merely condones delay of 395 days in filing the Appeal.
2. That Condonation of delay is the discretionary power exercised by the Appellate Court in which this Court cannot interfere in exercise of jurisdiction under Section 100 of the Code of Civil Procedure (Code).
3.  Technicalities cannot be permitted to overtake the substantive rights sought to be agitated by a flat purchaser.
4. That Allottee suffers from serious cardiac ailments for prolonged time, which is evidenced in various certificates produced before the Appellate Tribunal. 
5. That Allottee also faced financial distress on account of health issues suffered by him
6. The Allottee has excellent case on merits, and the same cannot be thrown out on the ground of limitation without considering the merits involved in the Appeal.

Observations of the High Court:-

1. The short issue that requires consideration in the present Appeal is about correctness of the order passed by the Appellate Tribunal in condoning delay of 395 days in filing the Appeal.
2. Condonation of delay is a matter of discretion to be exercised by a Court. So long as exercise of discretion is sound, the Appellate Court shall not substitute its discretion with the discretion exercised by the Court condoning the delay 
3. it cannot be stated that there is complete absence of any cause in the application. Respondent, in his capacity as a flat purchaser first made an attempt to prosecute his complaint personally considering the ease of access provided to parties-in-person before Regulatory Authority.
4. There is sound exercise of discretion by the Appellate Tribunal in condoning the delay. So long as the exercise of discretion by the Appellate Tribunal is not arbitrary, interference by this Court in exercise of discretion is clearly unwarranted.
5.  the Respondent repeatedly pursued various issues with Appellant after passing of the order by the Regulatory Authority. The email correspondence started from 24 February 2018 and went on till 4 December 2018. Most of the emails were in respect of permission to visit the flat, since the Respondent believed that the same was not habitable
6. It is not unnatural for a flat purchaser, who had book the flat in 2011 and was yet to receive possession, to feel anxious especially when he was not permitted to inspect the flat.

Order of the High Court:-

1. the Appellate Tribunal was justified in condoning the delay in filing the Appeal by Respondent.
2. The Second Appeal is accordingly dismissed without any orders as to costs. 

MahaRERA Appellate Tribunal: There can be no forfeiture on withdrawal before sale agreement

 The Maharashtra Real Estate Appellate Tribunal, Mumbai, on March 17, 2021 set aside the order dated October 3, 2019 (“impugned order”) passed in Complaint No. CC006000000089770 in the matter of Mr. Dinesh R. Humane and Mrs. Ranjana D. Humane (“Appellants/Allottees”) v. Piramal Estate Private Limited (“Respondent/Promoter”) by the Maharashtra Real Estate Regulatory Authority (“MahaRERA”). The order dated March 17, 2021 directed the Promoter to refund the total amount paid by Allottees on the cancellation of flat reservation.

Facts of the Case:

The Allottees agreed to purchase, and the Promoter agreed to sell Flat No. 807 in the project namely Vaikunth Cluster- 2 at Thane. The Allottees submitted form of ‘request for reservation’ of Flat on 29th January 2019 and paid an amount of Rs. 1,12,393/- as booking amount to the Promoter. The Allottees  also paid Rs. 4,49,574/- on March 1, 2019 towards price of the Flat to Promoter. On account of medical emergency in the family of Allottees, they decided to cancel the flat booking. Accordingly, they sent an   e-mail to the Promoter requesting to cancel the flat booking and to refund the total amount of Rs.5,61,967/-. The Promoter replied vide e-mail dated May 20, 2019 that the amount paid by Allottees is forfeited on account of cancellation. The Allottees filed a Complaint before MahaRERA for recovery of amount of Rs. 5,61,967/- from the Promoter. The impugned order was passed by MahaRERA whereby the Promoter/ Respondent was directed to refund the booking amount in accordance with the booking form. The Allottees filed an appeal before MahaRERA Appellate Tribunal challenging the order passed by MahaRERA.

Issues:

Whether the MahaRERA order directing the Promoter to refund the booking amount to Allottees in accordance with booking form signed by both the parties is correct?

Analysis:

The MahaRERA Appellate Tribunal held that:

Form of ‘request for reservation’ is signed by Allottees only and not by the Promoter. The terms and conditions recited in Annexure “A” thereto are to be followed and observed by Allottees only. As per the impugned order, amount is to be refunded in accordance with the booking form signed by both the parties. Annexure “A” is not styled as booking form and there is no document having nomenclature as "booking form” which is signed by Allottees or by both the parties. Thus, the impugned order is passed based on such document which does not exist on record.

The only document signed by the Allottees is the printed form styled as ‘request for reservation’, which consists of 33 different terms and conditions to be observed by Allottees only. Clause 17 providing forfeiture of 10% amount of the total price of flat or the amount paid till the date, whichever is lesser, in case of withdrawal by Allottees is ex-facie unreasonable, unfair and inequitable. Existence of such a condition in the printed form of ‘request for reservation’ is against the object and purpose of Real Estate (Regulation and Development) Act, 2016 (“RERA”) and the same being against statute of RERA is not binding on the parties and such unreasonable and unfair transaction cannot be enforced.

The Supreme Court in the case of Pioneer Urban Land and Infrastructure v. Govindan Raghavan, [Appeal No. 12238 of 2018, decided on April 2, 2019] held that the court will not enforce an unreasonable, unfair contract or an unreasonable and unfair clause in a contract where contracting parties are not equal in bargaining power and where a man has no choice or rather a meaningful choice but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form as a part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rule may be.

The agreement for sale was not executed between the parties. Parties never reached to the stage of executing agreement for sale. There was no attempt to execute the agreement on the part of either the Promoter or Allottees. The refund of amount paid to promoter can be demanded as per Section 18 of RERA on the ground that promoter fails to give possession on agreed date or fails to complete the project as per terms and conditions of agreement for sale. However, in this peculiar matter though the claim of refund is not governed by any specific provision of RERA, it cannot be ignored that the object of RERA is to protect the interest of the consumer.

Regulation 39 of Maharashtra Real Estate Regulatory Authority (General Regulation), 2017 and Regulation 25 of Maharashtra Real Estate Appellate Tribunal Regulation, 2019 are in respect of the inherent powers of the regulatory authority and the appellate tribunal to pass such orders which are necessary to meet the ends of justice.

The MahaRERA Appellate Tribunal, thus, set aside the impugned order and directed the Promoter to refund the full amount paid by Allottees.

Long term leases would amount to sale and hence lessees will also fall within the definition of "allottee”

 In the Matter of Manju Mahendra Joshi Vs. Lavasa Corporation ltd. Complaint no. AT006000000000096, decided on 17.04.2018 beforeThe Maharashtra Real Estate Appellate Tribunal

In the Matter of Manju Mahendra Joshi Vs. Lavasa Corporation ltd. Complaint no. AT006000000000096, decided on 17.04.2018 beforeThe Maharashtra Real Estate Appellate Tribunal ruled that “ Long term leases would amount to sale and hence lessees will also fall within the definition of allottee”

This Order was further upheld by the Order of Bombay high Court in Lavasa Corporation Limited v. Manju Narendra Joshi (C.A. No. 791 of 2018) decided on 07.08.2018.

On behalf of the lessor it was contended that since the impugned agreement was an 'agreement of lease' and not an ‘agreement for sale’, the provisions of RERA would not be applicable.

The definition of ‘promoter’ under section 2(zk) of RERA was relied upon by the lessor, as it contemplates a person, who constructs or caused to be constructed an apartment ‘for the purpose of selling’.

Reliance was also placed on the definition of 'allottee', under Section 2(d) of RERA, which specifically provides that allottee does not include a person to whom plot, apartment or building is ‘given on rent’.

Reliance was placed on the judgment of the Supreme Court in the case of R.K. Palshikar (HUF) v. CIT, M.P., Nagpur and Bhandara, 1988 (172) ITR 311, wherein it was held that lease for a period of 99 (ninety nine) years would amount to transfer of capital assets. A judgment of the Madras High Court was also relied upon, which held that a lease for a period of 99 (ninety nine) years is an alienation as a sale, and mere use of the word 'lease' or the fact that a long term is fixed would not by itself make the document in lease.

The intention of RERA, as highlighted by the Supreme Court in the case of R.S. Raghunath v. State of Karnataka, (1992) 1 SCC 335 was also looked at, which was to protect the interest of consumers who have invested substantial amounts in real estate projects. If they are excluded from the definition of 'Allottee' and thereby from the protection given under the Act, by giving restrictive meaning to the term 'Allottee', the very object of RERA would stand frustrated.

Only one condition of Either 500 Square meter of land or number of apartments proposed to be developed does not exceed eight inclusive of all phases, need to be satisfied under section 3(2) of the RERA Act.

In the Matter of Geetanjali Aman Constructions Vs Hrishikesh Ramesh Paranjpe Complaint no. SC10000672 decided on 10.07.2019 before Maharashtra Real Estate Appellate Tribunal 

The Bench of Indira Jain J. Chairperson, SumantKolhe, Member (J), S.S. Sandhu, Member (A) of the Mumbai RERA Tribunal, held by the ratio of 2:1 that only one condition need to be satisfied

under section 3(2) of the RERA Act which states that no registration is                         required in those project

where the area of land proposed to be developed does not exceed 500 square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases. It was held principal question that needs to be addressed in this appeal revolves around the interpretation of word ―or‖ used in clause (a) of Section 3(2) of RERA. The crux is whether ―or‖ has to be read conjunctively or disjunctively. Needless to state that need to interpret the provisions of law would arise only when there is ambiguity left or a doubt is created in understanding the provisions. In our view in understanding the provision of law what should be done when the words are clear and unambiguous is to give the words that meaning which they convey plainly, irrespective of the consequence

Provisions of Section 12 are retroactive in nature,allottees are entitled to protection for breaches and failure of the developer notwithstanding that the transactions between the developer and the allottees consummated before the Act came into force

 In the Matter of Rohit Chawla and Ors. vs. Bombay Dyeing & Mfg. Co. Ltd. complaint no.AT006000000011016  decided on 31.12.2019 before Maharashtra Real Estate Appellate Tribunal

In the instant case, 

• the developer had published the project and gave assurances regarding details of the amenities and flats and basis such representations, the allottees booked flats in the project in 2012-2013. 

• The developer further represented to the allottees that it would handover the possession of the flat by 2017. However, the developer failed to handover the possession and also failed to provide amenities as were assured to the allottees. 

• Accordingly, the allottees filed a complaint before MahaRERA claiming that they had suffered a loss on account of incorrect and false statements made by the developer in relation to the project. Further, the allottees also sought refunds of the amounts paid by them along with interest thereon.

• MahaRERA held that Section 12 of the Act (which deals with obligations of the developer regarding veracity of the advertisement or prospectus) was not retrospective and was not applicable to the instant case since the allottees had booked flats in the year 2012-2013 and the Act came into force in the year 2017. 

• Further, MahaRERA had rejected the plea of the allottees to withdraw from the project since it would jeopardise the completion of the project. 

• The MahaRERA Appellate Tribunal overruled the order passed by MahaRERA and held that provisions of Section 12 (which deals with obligations of the developer regarding veracity of the advertisement or prospectus) are retroactive in nature and the allottees are entitled to protection for breaches and failure of the developer notwithstanding that the transactions between the developer and the allottees consummated before the Act came into force.

•  Further, MahaRERA Appellate Tribunal also held that the allottees are entitled to withdraw from the project and the developer was under an obligation to refund the amounts paid by the allottees along with interest thereon.

x

If the tax amount is credited to the State Government in the name of the allottee the predominant role is of the allottee and for that the Promoter cannot be held responsible to refund the VAT payment.

  In the Matter of Ashutosh Suresh Bagh v/s. The Member & Adjudicating Officer & Ors. Complaint no. AT005000000000120 decided on 02.05.2018 before Maharashtra Real Estate Appellate Tribunal

The Appellate Authority Held that 

"While deciding claims between the allottees and meeting with controversies, or the difficulties faced by the Promoter, a harmonious approach is imperative to be adopted. This is moreso the cumulative effect of the Statute coupled with Sections 71(3), 72, 38, Preamble and impetus of Section 18 of

RERA Ad is to be coherently considered. Going by these provisions and reading the order under challenge, it is apparent that refund of VAT could not be from the Promoter as the tax amount is credited to the State Government at the credit ,/ in the name of the allottee. Whatever would be the refund, would be available subject to termination of existing agreement between the parties and on an application to the concerned authorities by the allottees. In both these situations, the predominant role is of the allottee and for that the Promoter cannot be held responsible to refund the VAT payment. 

Statutory payments like stamp duty, VAT, service tax are to be deducted and flat purchaser is not entitled for the same

In the Matter of Bhoomi And Arcade Associates vs Alistair Gomes, Appeal No. AT 005000010880

Mumbai Rera Authority ordered the promoter to refund the entire amount of Rs.3,40,491/- expended by the complainant with regard to the ancillary expenses borne towards registration, stamp duty, processing fees, and finance company charge.

The Mumbai RERA Tribunal overruling the order of the Authority held that in the proposition settled in the case of Ashutosh Suresh Bagh v/s. The Member & Adjudicating Officer & Ors. and conjunctive reading of clauses 6 and 10 of the Agreement entered between the parties, it is clear that statutory payments like stamp duty, VAT, service tax are to be deducted and flat purchaser is not entitled for the same.

Adjudicating Officer Under RERA is only Empowered to Adjudge Compensation Under Section 71 and Section 72 of the RERA and does not have Jurisdiction to decide Matters for Allowing Refund Under Section 18 of the RERA

The Maharashtra Real Estate Appellate Tribunal, Mumbai (“Appellate Tribunal”), in the matter of Xrbia Developers Ltd. v. Firoz Aziz Shaikh (“Appeal”), has, inter alia, held that the Adjudicating Officer (“AO”) under RERA is only empowered to adjudicate on the compensation to be granted under Section 71 and Section 72 of the RERA. 

The Hon’ble Appellate Tribunal has further held that the jurisdiction to adjudicate on the matters relating to refund with interest under Section 18 of RERA vests with Adjudicating Authority. 

The Hon’ble Appellate Tribunal, whilst deciding the issue of sustainability of the order passed by AO in the complaint preferred by the allottee seeking refund with interest along with other reliefs had held that, 

“11. Considering the legal position discussed and held as above, it is crystal clear that AO has powers only to adjudge compensation under Sections 71 read with 72 of RERA and has no jurisdiction to decide matters for allowing refund with interest under Section 18 which is vested with the Authority only. Consequently, the order passed by AO with regard to subject matter involved in the above complaint is obviously without jurisdiction as per provisions of RERA. It is a fundamental principle well established that an order passed by a forum having no jurisdiction over subject matter is a nullity. An objection to lts valldity can be raised at any time including the appeal proceedings. For the said reasons, the impugned order passed by AO cannot be sustained and therefore is liable to be quashed and set aside being a nulllty for lack of jurisdiction of subject matter as contended by Promoter, We answer the point accordingly.”

Promoters are NOT entitled to exemption from compliance of Proviso of Section 43(5) of the Real Estate (Regulation and Development) Act, 2016

 IN THE MATTER OF: 

M/s Mahanagar Reality & Ors. Vs. Dinesh Ramlal Oswal & Anr. (Decided by the Hon’ble Maharashtra Real Estate Appellate Tribunal, Mumbai) 

Issue: 

 Whether the Promoters are entitled for exemption to make compliance of Proviso of Section 43 (5) of the Real Estate (Regulation and Development), Act, 2016? 

Facts: 

 Promoters being the Applicant preferred an appeal against the impugned order dated 10.01.2019 wherein the promoter was directed to refund of the amount paid by the allottees along with the interest amounts. 

 Thereafter, the Promoters filed an application for waiver of pre-deposit mandated under Section 43(5) of Real Estate (Regulation and Development) Act, 2016 before the Hon’ble Appellate Tribunal. 

Observations and Findings of the Hon’ble Tribunal: 

 The Hon’ble Appellate Tribunal observed that, it is mandated under the Real Estate (Regulation and Development) Act, 2016 that the promoter who prefers an appeal has to deposit the amount(s) and comply with the Proviso of Section 43 (5) of the Real Estate (Regulation and Development) Act, 2016 for entertaining and hearing the appeal, and that deposit in respect of the same is a prerequisite. 

 The Hon’ble Tribunal also observed that the right to appeal can be conditional and quantified. 

 The Hon’ble Tribunal further observed that the Hon’ble Supreme Court has previously settled this principle that any statute has to be interpreted in the context in which the words by are used in that particular statute. 

 Real Estate (Regulation and Development) Act, 2016 being a special legislation enacted to protect to the interests of the allottees cannot grant any exemption/ waiver to the promoter from pre-deposit of the amounts to be made under Section 43(5) of Real Estate (Regulation and Development) Act, 2016

SPECIFIED “DATE OF POSSESSION” IS BINDING ON THE DEVELOPER AND NOT AFFECTED BY “GRACE PERIOD” CLAUSES UNDER Agreement For Sales

 In Suryakant Yashwant Jadhav & Anr. v. Bellissimo Hi-Rise Builders Pvt. Ltd. & Ors., the MahaRera Appellate Tribunal has held that 

• where the promoters had agreed to give possession with occupancy certificate on a specified date, the promoters were obligated under Section 19(10) of RERA to offer physical possession with occupancy certificate to allottees and the allottees were obligated to take such physical possession with occupancy certificate within two months of such delivery. 
• The Court said that failure to handover physical possession of the flat with occupancy certificate, would attract Section 18 of RERA With respect to the clause of “grace period” of one year (which was provided irrespective of the force majeure events or situations beyond control of the parties) contained in the Agreement for Sale (AFS), 
• The Tribunal held that Section 18 of RERA is absolute on the point of "specified date" mentioned in the agreement for giving possession and cannot be extended on the basis of such grace period. 
• The Tribunal held that upholding the ‘grace period’ clause of the AFS would be against the spirit of Section 18 of RERA and consequently against the object of safeguarding interest of customers.

The Order can be accessed at  https://maharera.mahaonline.gov.in/Upload/PDF/AT006-21407.pdf

Letter of allotment would tantamount to an agreement for sale

 In the Matter of Manjeet Singh dhaliwal versus Jvpd properties private Limited,the Maharashtra appellate Tribunal held that even a letter of allotment would tantamount to an agreement for sale under Section 2(c) of the ACT if the letter contains the description of the property, payment schedule and costs requisition of permissions, obligation to complete the project and getting Clarity to title. since nothing further was left to be agreed upon, the contract was concluded.