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

MahaRERA - Section 15 only deals with voluntary transfer of a real estate project from an Existing Promoter to a new developer, wherever it is not a case of voluntary transfer by the Existing Promoter to the Incoming Promoter but through Planning Authorities, section 15 cannot be made applicable.

Section 15 only deals with voluntary transfer of a real estate project from an Existing Promoter to a new developer, wherever it is not a case of voluntary transfer by the Existing Promoter to the Incoming Promoter but through Planning Authorities, section 15 cannot be made applicable. 

Suo Motu Case No. 300 0F 2024 & Suo Motu Case No. 301 of 2024

Before the Maharashtra Real Estate Regulatory Authority, Mumbai

Date of Order March 27 , 2024

Fact of the Case:- 

• Some Slum land was situated in Kurla, Mumbai which is a declared slum.
• In the Year 2013 ,The Slum Rehabilitation Authority (SRA)  issued an LOI for its re-development to the RADIUS & DESERVE BUILDERS LLP.
• The RADIUS as promoter had registered 2 projects under section 5 of the RERA Act,2016 with the MahaRERA Authority.
• The Projects however did not move forward.
• on Date 20.09.2021, The SRA then under Section-13(2) of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act,1971 (Slum Act) passed an order , removing RADIUS as the Promoter.
• SRA permitted the societies to pass a general body resolution terminating the RADIUS as Promoter and appointment of a new developer of their choice.
• on 29.01,.2023 The Societies ,in their general body meeting, in the presence of the Assistant Registrar, SRA, terminated RADIUS  as the developer for the SRA scheme of redevelopment of the three societies and appointed the Incoming Promoter CHANDAK REALTORS PRIVATE LIMITED as the new developer.
• An LOI dated 12.04.2023 was issued by the SRA to the incoming Promoter CHANDAK.
• On 04.09.2023, an application was made by the Incoming Promoter CHANDAK seeking change of Promoter for the said Projects. 
  

The Authority Framed the following Questions for consideration:-

1. weather the change of promoter application is maintainable under section 15 of the Act?
2. whether the incoming Promoter as appointed by the societies and confirmed by the SRA can be regarded as a Promoter under the said Act?
3. who would be responsible for the obligations towards the earlier allottees?

Observations made by the Hon’ble Court:-

• From the plain reading of section 15, it is clear that this section is applicable in cases where there is a transfer of a real estate project from an Existing Promoter to a new developer i.e. Incoming Promoter. 
• In the present case the said Projects are not transferred to the Incoming Promoter (new developer) by the Existing Promoter, but the Incoming Promoter is being appointed by the societies as the Existing Promoter was terminated by the societies and SRA on account of various defaults and SRA who is the Planning Authority has confirmed the appointment of the Incoming Promoter herein.
• This is not a case of voluntary transfer by the Existing Promoter to the Incoming Promoter. 
• The section 15 deals with voluntary transfer, Thus, a change in Promoter as envisaged under section 15 cannot be made applicable here..
• in SRA projects, It is the promoter  who constructs the rehabilitation houses and finances those by selling houses in the free sale component. 
• Every project must have a promoter which is either a private or a government entity who carries the project forward delivering the promised homes which is in the interest of the consumers.
• ln this particular case it is the SRA that is mandated to recognize the Promoter and provide him with the legal Authority to enter upon the land which is declared as slum and to cause to construct both the rehabilitation component and the sale component.
• The SRA in this case has passed the order appointing the incoming Promoter as the new developer. In effect it is this appointee who will now have rights to enter upon the land construct the same and subsequently enable conveyance to the societies.
• This section mandates that advertising, marketing, booking, selling and all other such related activities can only be done by the promoter. 
• Hence in this case for the said Project to move forward and to enable the Incoming Promoter to market advertise and sell the project the Incoming Promoter would have to be recognized as a promoter.
• Since the appointment of the Incoming Promoter does not fall under section 15 the obligation towards the allottees cannot be fastened on the Incoming Promoter.
• While terminating the Existing Promoter and issuing the LOI to the Incoming Promoter the SRA has clearly directed that the Incoming Promoter is to reimburse amounts spent by the Existing Promoter. 
• The Incoming Promoter is now under an obligation to ensure all expenditure incurred on the said Project by the Existing Promoter is reimbursed to him.
• The Incoming Promoter on assuming the role of the Promoter will not be saddled with the obligations of the existing allottees of the Existing Promoter. The existing allottees stand protected and can enforce their claims against the Existing Promoter.

Court’s Order:-

1. The Incoming Promoter to apply to MahaRERA for a new / fresh registration

number with respect to the said Project Nos. 1 & 2 as per rules and procedures

laid down under the said Act.

2. A new / fresh registration number to be issued to the Incoming Promoter after

due scrutiny of the registration application filed by them with respect to the said

Project Nos. 1& 2.

3. The Incoming Promoter to open a new designated bank account as per rules and

procedures laid down under the said Act for execution of the project.

4. The existing registration of the said Project Nos. 1 & 2 i.e. P51800009827 and

P51800005533 allotted to the Existing Promoter be kept in abeyance till

obligations of the existing allottees are settled.

5. The Existing Promoter shall not advertise, market, book, sell or offer for sale, or

invite person/s to purchase in any manner any apartment in the said Project

Nos. 1 & 2.

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.

NCLAT - Creditors of a class for amended Section 7(1) threshold of 10% or 100 whichever is Lower must be from a particular project registered with RERA

Pankaj Mehta V/s M/s. Ansal Hi-tech Township Limited 

Company Appeal (AT) (INS) No. 248 of 2023 

(Arising out of the `Impugned Order’ dated 06.01.2023 in CP (IB) No. 596 (PB) / 2021)

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI  

Time line of the Matter :-

1. The ‘Appellant / Financial Creditor / Applicant’, along with106 other ‘Financial Creditors / Applicants’, had preferred petition ,under Section 7 of the I & B Code, 2016 before NCLT PB New Delhi.
2.  Wherein, M/s. Ansal Hi-Tech Township Limited, was described as the ‘Corporate Debtor’ and the Total Amount of Debt, was mentioned as Rs.41,81,90,116/- 
3. On Date 06/01/2023, NCLT,  dismissed the main Company Petition as `Not Maintainable’ terming that the `Allottees’, belong to different Sub Projects.

Fact of the Case:- 

1. A Project by the name of  'Sushant Megapolis near Dadri Town, adjoining Greater Noida, Uttar Pradesh.  by Corporate Debtor M/s Ansal comprises of Plots / Built-up Plots/ Row Houses/ Flats / Floors /  Villas / High-rise Apartments, under various allocated Sites.
2. License for developing the Township, was granted  in Year2006, by the UP Government with the instruction of Entire Construction be completed by year 2016.
3. By 2016 the Project was incomplete and M/s Ansal registered 25 separate projects having separate `RERA Registrations’ in this Township with RERA.
4.  Appellants are 107 different Allottee  who purchased different types of Units such as Plots / Flats/ Apartments /EWS unit , in the Project.
5. The Possession date of all the allottees  was from 36 months to 42 months, from the date of sanction of the `Layout Plan’ of the `Allotted Unit’. 

Submissions by Appellant

1.  All the Applicants had entered into respective BBAs, much before the RERA Act,2016 came into force.
2.  The said `Agreements’, specifically, defines that `Sushant Megapolis’, as one complete `Project’.
3. The `Single Layout Plan of this project reflects Group Housing/ Plots and EWS Units as part of `One Project’, comprising of 2504 Acres of Property.
4. A Single  Application for Environmental Clearance, was filed for the entire project. 
5.  The Project in question, is a `Single Real Estate Project’, for the purposes of Section 7 of the IB Code, 2016.
6. It therefore, falls under the requisite ambit of the provisos of the amended Section 7(1) of the IB Code 2016 pertaining to the minimum threshold requirement of 100 Allottees or 10% of the Total Allottees, whichever is less, belonging to the `same Real Estate project’. 
7. The NCLT, Passed the impugned Judgment without considering the decision of Hon’ble Supreme Court in Manish Kumar v. Union of India & Ors  (2021) 5 SCC OnLine SCC 1, wherein, it is observed that a Real estate project can be a composite one for Plots and Apartments or for Plots & Buildings.
8. Further, the definition of `Allottee’, is split into broadly three Categories Plot, Apartment and Building and the `Purchasers’ of all these are covered under the term `Allottee’ 
9.  The interpretation, laid down by the was incorrect  that 100 or 10% of the `Allottees’, must be from the `same Building’, and `not from the same `Real Estate Project’.

Submissions by Respondent

1. The Township, consists of Multiple Residential  and Commercial Real Estate Project, and all the sub-projects, are independent of each other and are being developed and sold as separate Projects.
2. Each and Every phase, is registered as a stand-alone Real Estate Project under RERA with separate `RERA Registration Numbers’
3. As per Hon’ble Supreme Court of India, that the task of ascertaining who will be Allottees and therefore, what would constitute 10% of total number of Allottees must depend upon the nature of the `Real Estate Project’.
4.  The Petitioners do not satisfy the required threshold limit of 10% or 100 persons’, whichever is lower, in none of the Project / Project categories, 
5. Approximately 50 Petitioners are either Co-Applicants or Third Applicants for a Single Unit just to fulfill the requisite number of 100 Allottees. whereas in the matter of Manish Kumar v. Union of India, wherein, it is held that `one unit equals to one Allottees’, even though, the said Unit is jointly held. 
6. The NCLT  made ‘inquiry’ and considered all the records pertaining to the Project.

Observations made by the Hon’ble Court.

1. The Corporate Debtor, had executed, at least Three different kinds of Agreements, namely  (a) `Plot Allottee Agreement’ (b) `Built-up Unit Allottee Agreement’ and (c) `Apartment Allottee Agreement as the projects were of `different character’ with `different type of developments with independent, RERA Registrations. ’
2. In none of the Projects / Project Categories, the Applicants  fulfil the requirement of Threshold Limit’ of 10% or 100 persons, whichever is less. 
3. the Appellant are from different numerous projects, and they have not established their case, as `Creditors of a class’, concerning any `particular project’, registered with RERA, with a view to fulfil the requirement of  Section 7 (1) of the IBC in regards to 10% or 100 Allottees’
4. In the present case on hand, the foremost aspect to be taken into account is the RERA Registration of the Projects, of the Corporate Debtor, for ensuring the Initial limit for pressing into service of the ingredients of Section 7 of the Code. 
5. The `Impugned Order’ and the views expressed in dismissing the CP (IB) No. 596 (PB) / 2021, is free from any `legal flaws’. 

Court’s Order

Accordingly the instant `Appeal’ sans merits is `Dismissed’ with no costs.

BOMBAY HIGH COURT - The liability of refund falls upon all the listed promoters even if they may not have received the amount in consideration.

BOMBAY HIGH COURT - The liability of refund falls upon all the listed promoters even if they may not have received the amount in consideration.

Wadhwa Group Housing Private Ltd vs Vijay Choksi & SSS Escatics Pvt. Ltd

SECOND APPEAL (Stamp) NO. 21842 OF 2023

Decided on 26 February 2024

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

Time line of the Matter :-

1. Allottee approached MahaRERA U/s 12 and 18 of the RERA act and sought refund of amount of Rs.2,62,35,056/- along with interest as well as compensation and costs.
2. On 24/09/2021 MahaRERA passed the Order holding that Allottee could not claim any equity under the provisions of act and his prayer for refund was rejected, and directed parties to execute registered agreement for sale within 30 day failing which the entire amount was directed to be refunded to the Allottee within six months.
3. Allottee filed Appeal U/s 43 of the RERA Act before the Appellate Tribunal.
4. On 18/10/2022 Appellate Tribunal partly allowed the appeal and set aside the Order directing both the Builders to Jointly refund the amount paid by the Allottee with interest.
5. Aggrieved by the Appellate Tribunal’s Order to put the liability to refund the amount received by SSS Escatics Pvt. Ltd the other Builder Wadhwa Group Housing Private Ltd chose to file this appeal.

Question of Law Framed in Second Appeal

"Whether a promoter who has not received any consideration from an allottee can be made liable for giving refund with interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016?"

Fact of the Case:-

1. Builder SSS Escatics Pvt. Ltd, launched a project called “The Nest” as a Slum Rehabilitation Scheme.
2. On 05/09/2012 A JDA (Joint Development Agreement) came to be executed between both the Builders SSS Escatics Pvt. Ltd and Wadhwa Group Housing Private Ltd.
3. Under the said JDA Wadhwa and SSS segregated the constructed area amongst themselves for being sold to customers.
4. On 19/07/2013, Allottee booked a 3BHK Flat bearing B-502 admeasuring 2385 sq.ft in the said project for agreed consideration of Rs.2,65,35,000/-
5. Allottee paid an amount of Rs.1,20,00,000/- towards part consideration.
6.  On 24/07/2013 SSS issued allotment letter to Allottee.
7. The project remained incomplete on the date of coming into force of RERA Act, 2016.
8. The project was accordingly registered as ongoing project under Section 3 of the RERA by SSS in which the Wadhwa was declared as a Promoter (Investor).

Submissions by Appellant

1. Wadhwa cannot be held responsible for refund of any amount to the Allottee as he has not paid any amount to the Wadhwa and that therefore there is no question of refunding any amount to him.
2. As per the JDA both builders identified their respective entitlements in constructed portion of the building and the flat in question falls in the share of SSS, and it  alone received the entire consideration from the Allottee thereby no question of Wadhwa refunding the amount which it did not receive.
3. Mere a change in law requiring reflection of name of wadhwa as Promoter does not create its liability, which did not exist prior to introduction of RERA.  

Submissions by Respondent

1. Wadhwa is undoubtedly covered by definition of the term ‘Promoter’ per se Section 2(zk) of RERA.
2. Definition U/s 2(zk) makes it clear that all promoters are jointly liable under the Act.
3. That a promoter cannot be permitted to defeat the rights of the flat purchasers by making internal arrangements with investors, land owners, etc 

observations made by the Hon’ble Court

1. There appears to be no dispute that the payments were made by the Allottee to the SSS.
2. it is necessary to determine whether Wadhwa falls in the definition of the term ‘promoter’.
3. While registering the project as ongoing project under Section 3 of the RERA, Wadhwa’s name has been included in the list of Promoters. Therefore, Wadhwa cannot run away from the fact that it is the promoter in respect of the project ‘The Nest’
4. Mere falling of flat in the share of the SSS under the JDA would not excuse the Wadhwa from the responsibilities and liabilities under the RERA, Rules and Regulations made thereunder qua that flat. 
5. RERA does not demarcate or restrict liabilities of different promoters in different areas and the liability is joint for all purposes under the Act, Rules and Regulations
6.  Since the Wadhwa is covered by definition of the term ‘Promoter’, it is also jointly liable to refund the amount along with the SSS.
7. Distinction between projects launched before and after coming into force of RERA cannot be a ruse to escape the liabilities as promoter under RERA.
8. The Wadhwa’s contention about absence of privity of contract between it and the Complainant is totally misplaced as it is a matter of indoor management between the Promoters and the flat purchaser who is not supposed to know the intricacies of the arrangements made between several promoters amongst themselves.

Court’s Order

Accordingly the Second Appeal is accordingly dismissed with costs.

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. 

FIR by Maharashtra RERA Against Builder after forensic audit for Non Compliance and Misappropriation U/s 4,406,409,420

FIR by Maharashtra RERA Against Builder after forensic audit for Non Compliance and Misappropriation.

On the Date 23/02/2024 , On the Directions of the Maharashtra RERA, the administrative officer Lodged the FIR u/s 34,406,409,420 against the

1. PARAMVIR DEVELOPERS LLP
2. KUMAR KANAYALAL MORDANI (Director) and
3. KANAYALAL MORDANI (Director)

Timeline of the Matter

1. On Date 11/01/2023 Maharashtra Real Estate Regulatory Authority (Maharera) sent a letter to PARAMVIR DEVELOPERS LLP dated regarding non compliance of its rules.
2. Again On Date 27/02/2023 another letter was sent to Builder dated regarding non compliance.
3. No reply received from the Builder.
4. Due to No Reply by the Builder,  On Date 14/03/2023 ,a company named Neelam Arch Consultant was appointed as an investigator for the Builder's Project High street (Maharera Registration No. 51800005582)
5. The investigator was not allowed access to the site by the Builder.
6.  On the Intervention of Maharera only the Investigator was given access to the said site
7. After studying the site the Investigator submitted a report to Maharera on 23/03/2023.
8. On Date 24/03/2023, Maharera sent a letter to Builder regarding non-filing of any return but again the builder did not respond.
9. On Date 02/05/23, Maharera decided to appoint M/s BDO India LLP to conduct a forensic audit of Builder's high street project .
10. The company B.D.O. India. LLP submitted the report in this regard to Maharera on 25/08/2023.

The Forensic Audit Report revealed the Followings:-

• The Builder collected a total of Rs.19.82 crores from the customers and deposited the entire amount in the current account of his firm and not in the Separate RERA bank as mandated U/s section 4(2)(l)(d).
• Out of Total Rs.19.82 crores received by the developer from the customers, an amount of Rs.11.61 crores is given as Interest free loan and advance to other Sister companies/firms without any agreement and document.
• The Builder raised a loan of Rs. 202.33 crores  from Banks and Financial Institutions for the said project.

• Out of the total loan amount raised, Rs. 66.43 crores is given as Interest free loan and advance to other Sister companies/firms without any agreement and document.

•  A total of Rs 109.13 crore was repaid to the financial institutions even before completing the project.

• There by The Builder misappropriated a total amount of Rs 78.04 crore.
• Only an amount of Rs. 6.40 crores was used under the project expenses in the ledger books.

• The developer had taken bookings for the project from 34 customers. On verification of the customer ledger and sales ledger from the developer, it was seen that the booking amount of five customers was 220 crores, but due to cancellation of their bookings, the amount refunded to them was only Rs. 2.83 crores. This raised doubts about the refund amount.

• Since 2017 the developer did not submitted  any quarterly report.

• The developer constructed a thirteen storied RCC against a permission of a six storied building. 

• The developer only completed 30 % of the project by December 2022.

Thus Resulting in the FIR against the Builders and its Directors.

TSRERA :- The Allottee has an obligation to adhere to the payment schedule as agreed in its Agreement of Sale as per Section 19(6) and non procurement of the Home loan amount cannot put the Builder under financial distress.

The Allottee has an obligation to adhere to the payment schedule as agreed in its Agreement of Sale as per Section 19(6) and non procurement of the  Home loan amount cannot put the  Builder under financial distress. 

Sri Umesh Choudhary Vs/ M/s Alpine Infratech 

COMPLAINT NO.519 OF 2023 decided on 12th Day of March, 2024 

BEFORE TELANGANA STATE REAL ESTATE REGULATORY AUTHORITY

Facts :-

1. The Complainant booked a flat in August 2021 in the project of the Respondent Builder.
2. Application Form/Terms and Conditions of Allotment was signed by him.
3. The Agreement of Sale was executed in the month of January 2022.
4. Complainant paid 20% of the cost and the balance 80% amount was to be arranged in form of Home loan.
5. The Project was approved from many nationalized bank but as the Complainant was a Central Government employee so he wanted the Home Loan in the form of House Building Allowance (HBA) from his concerned department. 
6. That vide e-mail dated 15.04.2022, the Complainant sought for several documents ( a list of 19 documents) from the Respondent Builder to avail HBA loan.
7. The complete documents were finally given by the builder on 20.02.2023.
8.  The Builder directed the Complainant to pay the Final due amount by 28.03.2023 else base price will be increased by Rs.200 per sft.
9. The Complainant offered an interim payment of Rs.5,00,000/-  by first week of May 2023 and the full payment by July 2023.
10. In May 2023, the Complainant requested the builder to accept the due amount of Rs.25,00,000/-
11. The Builder refused to accept the amount and stated that they will only accept if the Complainant agreed to make the payment with the revised base rate by Rs. 1000 per sft an increase of  Rs.11,20,000 in total price. 

Complainants Contentions :-

1. The delay in making payment occurred due to non-handing over of documents in time. hence, management is responsible for such delays.
2.  The revised increased rate is not acceptable as the delay in making payment did not occur on default of the Complainant. 
3. Prayed to take needful action against the Respondent Builder as per the applicable rules and regulations and to get the flat at the original agreed rate.

Respondent Builder's Contentions :-

1. The Complainant in spite of availing discount did not pay the agreed amount on time.
2. The Complainant initially agreed orally to take loan from various nationalized banks but later in the month of July 2022, started requesting various documents from the Respondent Company
3. The Complainant made one or the other request for the documents and that too after a lapse of one year and also which were beyond the purview of the Respondent Company and evaded the payments due to the Respondent Company. 
4. The Respondent Company sent several mails requesting the Complainant to visit the office of the Respondent Company to sort the issue. 
5. The Complainant failed to perform his part of contractual obligation and did not make the payment as per schedule, that's why the Company is justified in cancelling the booking 

Observations of the Authority :-

1. In Clause 1.3 of the BBA, the Complainant agreed to make payment as per payment plan set out in Schedule C (Payment Plan).
2. As per the Payment Schedule annexed to the said Agreement of Sale, the Complainant categorically agreed to payment of the schedule therein. which is not disputed by either party 
3. in the annexure to the said Payment Schedule, Point No.4 stipulates that prices are subject to change without prior notice upon non confirmation of sale.  
4.  the Complainant is bound by the same and failure of the Complainant in complying with the payment schedule is derogation of his duty under Section 19(6) of the Act.
5. the delay in procuring the documents cannot be attributed to the Respondent Builder as the said documents may not readily available with him and he may not be in a position to produce documents such as 
1. government pleader's certificate, 
2. estimates, 
3. permission under Conduct Rules for purchase of site and for construction of the house,
4.  Notice under Section 26(1) of the Urban Land (Ceiling & Regulation) Act, 1976, etc
6. Clause 9.3 (ii) of the undated Agreement of Sale executed between the parties clearly stipulates In case of Default by Allottee under the condition listed above continues for a period beyond 2 (two) consecutive months after notice from the Promoter in this regard, the Promoter may cancel the allotment of the [Apartment/Plot] in favor of the Allottee and refund the money paid to him by the allottee by deducting the booking amount and the interest liabilities and this Agreement shall thereupon stand terminated

Order of Authority:-

1. The Complainant is directed to pay the remaining amounts which is pending as on date as per the payment schedule agreed upon by both the parties within 60 (sixty) days, along with interest of 10.65%.
2. In the event the Complainant fails to complete such payment, the Respondent is to initiate measures in accordance with the provisions of the Act and Rules thereunder.

Bombay High Court - Where Part Occupancy Certificate of a Project was granted under the rules of the Authority, a flat owner can not seek cancellation of it on the ground of violation , affecting the other owners , who may not be a party to the case.

before The Bombay High Court

Sanjay Phulwaria And Others

vs

Mumbai Metropolitan Region Development Authority And Others

Writ Petition Lodging No. 2639 Of 2018 With Notice Of Motion Lodging No. 542 Of 2018, Chamber Summons No. 238 Of 2018

decided on 16-10-2018

Where Part Occupancy Certificate of a Project was granted under the rules of the Authority, a flat owner can not seek cancellation of it on the ground of violation , affecting the other owners , who may not be a party to the case.

Chattisgarh RERA Notification on Joint Venture Agreement between Land Owners and Developers

 Joint Venture Agreement between Land Owners and Developers

 Chattisgarh Real Estate Regulatory Authority (RERA) vide circular No./94 /RERA/2023/1956 dated 01/12/2023 directs following clauses to be mandatorily added in the joint venture agreement between the land owners and builders:

1. The land owners and the builders shall be jointly & severally liable to fulfill all obligations under RERA;
2. The Agreement to Sale with the allottee should be signed by both.