Bombay HC tells developer to pay Rs 5 cr for not giving property possession

Mumbai: The Bombay High Court recently ordered a developer to pay Rs 5 crore compensation to a purchaser for failing to handover a property despite a delay of 80 months. A bench of Justice Suresh Gupte ordered M/s Renaissance Infrastructure, which had by way of an agreement in December 2019, agreed to handover the possession of a built-up warehouse building along with a compound, to the purchaser by 2010.

However, the promoters failed to handover the possession after which the purchaser moved to the Real Estate Regulatory Authority (RERA) Tribunal highlighting the lapse on the developer's part. The tribunal by an order calculated the compensation totally to Rs 5.4 crores, to be paid to the purchaser.

The tribunal had asked the promoter to pay Rs 6.3 lakh per month and also to handover the property at the earliest. However, the developer challenged the tribunal's order before the appellate court, which had asked it to first deposit at least 50 per cent of the compensation amount and only then it would proceed hearing its plea.

Challenging this order before Justice Gupte, the developer argued that its role wasn't that of a promoter, which is mandatory to be established under the RERA law. It also argued that the purchaser was earlier a business partner and thus the developers couldn't be ordered to pay the compensation.

However, Justice Gupte concluded that the facts of the case established that Renaissance was a promoter of the property and the agreement of December 2009 established the same. The bench, accordingly, upheld the RERA tribunal's orders asking the developer to pay Rs 5.4 crore as compensation.

(To download our E-paper please click here. The publishers permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal