Mumbai, Feb 19: In a significant ruling strengthening the rights of homebuyers, the Maharashtra Real Estate Appellate Tribunal (MREAT) has set aside an earlier order of Maharashtra Real Estate Regulatory Authority (MahaRERA) which had directed flat purchasers to pursue arbitration in view of clauses contained in their agreements for sale. The appellate body has remanded the matter back to MahaRERA with directions to decide the complaints afresh on their merits.
Appeals by allottees in Rivali Park project
The ruling came while hearing appeals filed by allottees, including Borivali resident Antony Ignatius and members of the Khadtare family from Bhayander, against CCI Projects Private Limited and Cable Corporation of India Limited. The appellants were represented by Advocate Anil D’Souza.
The dispute arises out of the “Rivali Park” project in Borivali, particularly the residential towers known as “Winter Green.” The allottees had booked flats and paid substantial consideration amounts. However, according to the complaints, the promoters failed to hand over possession within the agreed timelines. Aggrieved by the delay, the homebuyers approached MahaRERA seeking interest and compensation.
MahaRERA had dismissed complaints citing arbitration clause
The promoters opposed the maintainability of the complaints, relying on Clause 59 of the registered agreements for sale. The clause, executed prior to the enactment of the Real Estate (Regulation and Development) Act, 2016, provided that disputes between the parties would be resolved through arbitration. Accepting this contention, MahaRERA in August 2022 dismissed the complaints without examining their merits and directed the parties to initiate arbitration proceedings.
Challenging this order, the allottees moved the Appellate Tribunal, contending that the existence of an arbitration clause does not oust the jurisdiction of the regulatory authority under the RERA Act.
Tribunal cites High Court and Supreme Court rulings
Allowing the appeals, the Tribunal relied on the binding precedent of the Bombay High Court in M/s Rashmi Realty Builders Pvt. Ltd. vs. Mr. Rahul Rajendrakumar Pagariya, holding that the jurisdiction of the Authority under RERA cannot be defeated merely because the agreement contains an arbitration clause.
The Tribunal observed that disputes between allottees and promoters under the RERA Act are non-arbitrable in nature and fall squarely within the domain of the regulatory mechanism established under the statute. It further referred to the Supreme Court’s ruling in M/s Newtech Promoters and Developers Pvt. Ltd., which clarified that the RERA Act has retroactive application and covers ongoing projects that commenced prior to the Act coming into force.
Statutory remedy cannot be curtailed by contract
Rejecting the promoters’ argument that arbitration was a mutually agreed contractual forum, the Tribunal emphasised that a statutory remedy provided under a welfare legislation such as RERA cannot be curtailed by private contractual terms. The availability of arbitration, it noted, does not extinguish the right of homebuyers to seek redress under the special forum created by Parliament.
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Concluding that the earlier order warranted interference, the Tribunal set aside MahaRERA’s decision and restored the complaints for fresh adjudication on merits. The ruling is expected to have wider implications for pending disputes involving pre-RERA agreements containing arbitration clauses, reinforcing that homebuyers in Maharashtra can invoke the protections of the RERA Act irrespective of such contractual stipulations.
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