Q. I had booked a 2BHK flat in a project at Virar, and the agreement for sale was registered in November 2014. As per the agreement, the possession date was December 2016. However, due to a prolonged delay of more than five years, I cancelled the booking and filed a complaint before MahaRERA seeking a full refund of the amount paid, along with stamp duty, registration charges, interest and compensation.
In July 2022, the MahaRERA chairman passed an order directing the builder to refund the amounts paid by me, but awarded interest not from the dates of respective payments made to the builder, but from the extended date of project completion, which was June 30, 2022. I did not file an appeal and instead started negotiating with the builder, who kept assuring me of a settlement.
Now, the builder has stated that the refund will be made only after the flat, originally booked by me, is sold, creating uncertainty about compliance with the MahaRERA order. Can I now challenge the order on the ground that the interest awarded is contrary to RERA provisions? Is there a time limit for filing an appeal against MahaRERA orders, and can the delay be condoned? Alternatively, can I initiate proceedings for noncompliance with the MahaRERA order? —Shankar Sawant, Goregaon (East)
A. The MahaRERA order awarding interest from the revised or extended project completion date instead of from the dates of actual payments made by the allottee is contrary to the statutory provisions of the Real Estate (Regulation and Development) Act, 2016. Section 18 of RERA clearly provides that where a promoter fails to hand over possession of a flat in accordance with the agreement for sale, the allottee has a statutory right to withdraw from the project and seek a full refund of the amount paid along with interest.
The entitlement to interest is not discretionary but mandatory in nature. Further, the definition of “interest” under Section 2(za) of RERA expressly states that interest payable by the promoter to the allottee shall be calculated from the date the promoter received the amount or any part thereof until the date such amount and interest are refunded. The rate of interest prescribed under the Act is the State Bank of India’s MCLR plus two per cent per annum.
It is important to note that the MahaRERA Authority does not have the power to alter either the rate of interest or the date from which interest becomes payable. The authority is bound by the statutory mandate of RERA, and any deviation from the same amounts to an error apparent on the face of the record. The Supreme Court has, in several judgments, reiterated that payment of interest in cases of delayed possession is a statutory obligation of the promoter and cannot be diluted or waived on grounds such as delays due to circumstances beyond the promoter’s control.
The court has consistently held that such interest is non-negotiable and flows directly from the provisions of the Act. As regards the filing of an appeal, Section 44(1) of RERA provides that any person aggrieved by an order of MahaRERA may file an appeal before the Appellate Tribunal within 60 days from the date of receipt of the order. The Tribunal does have the discretion to condone delay if sufficient cause is shown. However, there is no fixed outer limit for condonation, and each case is examined on its own facts and circumstances.
That said, a delay of more than three-and-a-half years, especially when the party has consciously chosen not to appeal and has instead entered into negotiations with the builder, significantly weakens the case for condonation. In such circumstances, it is unlikely that the Appellate Tribunal would entertain an appeal at this stage. Instead of pursuing an appeal now, the more appropriate and effective remedy would be to immediately initiate execution proceedings for enforcement of the MahaRERA order passed in July 2022. This would compel compliance and ensure recovery of the refund amount without further delay.
(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)
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