MahaRERA rejects appeal of Pune developer

Mumbai: The Maharashtra Real Estate Regulatory Authority (MahaRERA) dismissed an appeal of a Pune-based developer who wanted to revoke the refund order along with an interest to homebuyers to be paid for the delay in giving possession of the booked flats.

The developer gave reasons of “demonetisation and implementation of Goods and Services Tax (GST)” as hurdles to complete the project on time. The case pertains to Mantri Vantage in Khardi, Pune, whose developer failed to hand over the possession on the agreed date to the allottees.

Dissatisfied with the extended date of possession of flats, homebuyers decided to withdraw from the project and demanded a refund with interest, including a compensation from the developer.

The homebuyers—Rajesh Saxena, Smiriti Saxena, Rajendra Saxena and Santosh Saxena—approached the MahaRERA, whereby on August 31, 2018, the adjudicating officer passed an order in favour of the homebuyers based on the sale of agreement documents.

However, aggrieved by orders, the developer had appealed to MahaRERA by challenging the legality, validity and correctness of the orders.

According to the developer, the project was badly affected due to demonetisation in 2016 and application of GST in 2017, apart from other reasons leading to force majeure.

Hence, the project could not be completed before December 2017 as mentioned in the sale agreement, he claimed. He further contended the project was extended as per the “arbitration clause” mentioned in the agreement for sale and allottees were informed about the new deadline and they did not object.

Moreover, the complaints filed by homebuyers under the RERA Act 2016 are not maintainable in view of the arbitration clause and any dispute between parties shall have to be adjudicated in the civil courts at Pune, he defended.

After hearing both the parties, MahaRERA stated two options were given to the allottees as per the earlier orders passed. If the possession is not handed over within the agreed time as per the first option, they may withdraw from the project and the developer shall refund the amount paid along with an interest and compensation.

As per the second option, the allottees may not withdraw from the project and the promoter shall pay interest for every month of delay till handing over the possession.

lf the option of withdrawing from the project is exercised by the allottee, reasons assigned for the delay in completing the project may not deprive homebuyers from claiming the refund amount with an interest, including the compensation.

Besides, it also made an observation that the arbitration clause in the sale agreement is against the spirit of RERA Act 2016 and is not binding on allottees.

“The developer cannot deprive allottees from exercising their statutory right. lt is for allottees to decide at what point in time and stage they may withdraw from the project for reasons of delayed possession,” the order copy reads.

The adjudicating officer taking observation of the Bombay High Court in Neelkamal Realtors case remarked the developer extended the date of possession for completion of project from time-to-time and lastly up to June 2020, as per the registration of the project with MahaRERA. lt is an unilateral extension of the date of possession. lt does not postpone the date of possession as per the agreements for sale.

“Opportunity to extend the date or completion of a project at the time of registration does not change the agreed date of possession and such extension does not absolve the promoter of his obligation to hand over possession.

lt simply protects the developer from penal consequences for breach of obligations under the RERA Act,” the order reads.

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