Mumbai: A Maharashtra Real Estate Regulatory Tribunal (MREAT) bench recently set aside a ruling of MahaRERA and has directed a realtor to refund with interest to an NRI woman homebuyer. In November 2019, MahaRERA ruled that in the absence of a registered agreement for sale, the provisions of section 18 of RERA are not applicable.
According to section 18 (1), the buyer is entitled to get a refund of the whole of the amount invested by him in the promoter’s project along with the interest and including compensation if the promoter fails to deliver possession in accordance with terms and conditions laid down in the Agreement to Sale, is unable to complete the project in due time specified in the agreement and fails to deliver possession on account of discontinuance his business due to revocation of his project under this act or for any other reasons.
US-based home buyer Bijoya Laxmi Gantayat had filed an appeal against an order by then MahaRERA chairperson Gautam Chatterjee denying relief under section 18 of Real Estate (Regulation and Development) Act (RERA) stating that since no agreement for sale had been executed and registered between the two parties, the provisions of section 18 do not apply to the case.
She had booked flat B-2406 in Tower B of the Alta Monte project on April 29, 2015, through Era Realtors for ₹1.97 crore and cumulatively paid 43 per cent of the total amount on the assurance of possession delivery by March 2017. The complaint relied upon an email sent by the promoters on March 30, 2015, assuring possession by March 2017.
Advocate Sunil Chavan, appearing for the home buyer, contended that his client came to know from the MahaRERA portal that without her consent and knowledge, the promoter changed the completion date of Tower B to December 31, 2020, completion date with amenities to December 2021 and completion date with other facilities to December 31, 2023.
He submitted that the promoters did not update and respond to the complainant about the progress of the construction work till July 2017. After November-December of 2017, his client and her daughter Atasi Gantayat tried to repeatedly follow up on the status of construction work and execution of an agreement for sale. When there was no response, she desisted from making further payment until the agreement for sale was duly registered. He claimed that the promoters on June 7, 2018, sent a notice terminating her booking and deducted ₹23.65 lakh from her paid amount and never registered the agreement for sale.
Advocate Mohanish Chaudhari, appearing for the developer, denied the claims made by the home buyer and said his client has never committed any date of delivery. He contended that the Alta Monte project has an SRA project component and is beyond the promoter’s control to complete any SRA project in such a short duration of two years. He claimed that on the MahaRERA portal, the date of completion for the project was December 31, 2021, with 12 months grace period hence the complaint was premature in November 2019, and MahaRERA was right in denying any reliefs to the complainant. He argued that the complainant is not financially capable to make payment of the outstanding amount and now wants a refund on the alleged ground of delaying delivery of possession.
After considering submissions from both sides, MREAT chairperson Justice (retd) SS Shinde and member K Shivaji held that Era Realtors had violated Section 11 (3), and 19 (2) which define the rights of home buyers, and the obligations of the promoters in providing updates on construction completion. The bench said the developer had also violated Section 13 of RERA which mandates that the promoter should not accept more than 10% consideration without first registering an agreement for sale.
The order dated January 24 also pointed out that the March 2015 email from the developer “unequivocally” conveyed that Tower B will be completed by March 2017, and the second email in September 2015 also forecasted mid-2017 as the delivery date. It held that the developer had failed to deliver possession by the promised date.
Regarding MahaRERA’s ruling regarding Section 18 cannot be applied if an agreement for sale is not executed, the bench cited high court and tribunal orders and observed that it is a settled position of law that agreement for sale need not be in writing and any other document containing requisite contents of the agreement will suffice.
“In view of above and considering the settled positions of law that written agreement for sale is not a prerequisite for the allottee’s right to accrue under section 18 of the Act, it is clear that impugned order suffers from infirmities and we hold that section 18 of the Act will continue to operate even in the absence of an agreement for sale in the instant case,” the order said, directing the developer to refund the paid amount with interest on the amounts till February 28 2023.