Q. I recently read in newspapers and on social media that the MahaRERA Appellate Tribunal (MREAT) declined to give relief to 19 homebuyers by dismissing their appeal against Anamika Society. These homebuyers, who had agreements for sale with Aditya Developers, naturally expected the society to accommodate them after terminating the developer for default, as they had already paid substantial amounts. The society refused, citing “no privity of contract” between them and the homebuyers. Now, MREAT has added salt to the wound by declining relief. If RERA authorities and courts start dismissing allottees’ claims like this, will people not lose faith in redevelopment? Why would buyers consider purchasing flats in such projects? Has MahaRERA failed in its primary objective of protecting homebuyers? —– Prakash Athavale, Dadar (West)
A. I must say the case of the 19 homebuyers against Anamika CHSL was not reported correctly in print or on social media. I have gone through the MREAT judgment dated November 11, and it provides answers to all your concerns. While it is true that the homebuyers’ appeal was dismissed, their appeal specifically challenged the registration granted to the society by MahaRERA to complete the unfinished work after terminating Aditya Developers.
This challenge was dismissed, but MREAT has kept their hopes alive by issuing certain directions to the authority. Briefly, Anamika Society entered into a development agreement (DA) with Aditya Developers in March 2011, with possession promised in July 2015. Due to delays and other breaches, the society terminated the DA, and the Bombay High Court upheld the termination. The society then decided to complete the redevelopment by appointing a contractor and obtained fresh registration from MahaRERA.
Meanwhile, both the society and the 19 buyers had filed complaints under Section 7 of RERA seeking revocation of Aditya Developers’ registration. MahaRERA passed an interim order asking both sides to meet, but no meeting occurred, leading the homebuyers to appeal against the society’s new registration. While dismissing the appeal, MREAT used the opportunity to clarify key RERA principles and underline MahaRERA’s obligations in redevelopment matters. It expressed dissatisfaction over the authority’s inaction and reminded it of its statutory duties under sections 4, 7, 8, 15, and 34.
The judgment states that “once the project is registered with the authority, it falls within the exclusive domain of the regulatory authority, and the regulatory authority cannot remain a silent spectator. It is statutorily obligated to protect the interests of homebuyers.” On the issue of “no privity of contract,” the judgment describes the situation as a “heads I win, tails you lose” scenario and expects MahaRERA to invoke its powers to curb such mischief. It notes that while granting registration to a society, MahaRERA can impose conditions to protect bona fide homebuyers, deter misuse of DA terms, and prevent dishonest developers or societies from exploiting loopholes.
The judgment further asserts that allottees cannot be left in the lurch merely because there is no direct contract with the Society. It also points out that under section 19(b) of the Specific Relief Act, allottees can enforce agreements for sale against anyone stepping into the shoes of the erstwhile developer. The judgment recommends that MahaRERA revisit its Standard Operating Procedure. The judgment expresses hope that this clear pronouncement will eliminate inconsistencies, prevent conflicting orders, and bring stability to redevelopment projects crucial to flat purchasers. One can only hope that the HC affirms this well-reasoned judgment at the earliest. This is the 100th column of Consumer Connect.
(Advocate Shirish V Deshpande is chairman, Mumbai Grahak Panchayat. Queries can be sent to him on email: shirish50@yahoo.com)
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