In a major relief to a home buyer whose agreement for sale mentioned no possession date, Maharashtra Real Estate Appellate Tribunal (MREAT) has modified a September 2020 MahaRERA order granting interest from May 2019 for the delay in possession, and directed the developer Jangid Properties to pay interest from June 2016 till possession.
Homebuyer Ishaque Qasimali Shaikh had booked flat no 401 in Aster building in Jangid Enclave project by Jangid Properties on Kanakia Road in Mira Road East for a price of Rs 47.88 lakh. The developer had issued an allotment letter on October 8, 2012, and an agreement for sale was executed on June 28, 2013, in which possession delivery date was not mentioned by the developer and had remained blank. Shaikh, who filed the appeal, claimed that the developer had verbally promised to hand over possession of the flat on or before April 2014.
He subsequently made timely payments for the flat, but the possession was delayed and while registering the project, the developer had revised the possession date to April 2019, and further revised it to October 29, 2020. Shaikh filed a complaint in November 2019 with housing regulator MahaRERA seeking interest in his investment from April 2014.
On September 28, 2020, MahaRERA gave a ruling directing the developer to pay interest from May 1, 2019, granting the benefit of 12 month grace period for completion of the project mentioned in clause 17 of the agreement. Aggrieved by the order, Shaikh had filed an appeal with the MREAT.
Advocate Kunal Maskar, appearing for the home buyer, contended his client booked the flat in 2012, but eight years later, the developer had failed to deliver possession. He contended that MahaRERA had failed to take into consideration a reasonable period for completion of the project while granting interest.
Chartered accountant Sumit Kapure, appearing for the developer, argued that MahaRERA had rightly observed that the complainant should have taken corrective action under the Maharashtra Ownership of Flats Act (MOFA) for the absence of possession date, and contended that the flat purchaser had slept over his rights and did not approach any forum till RERA came into effect. He argued that in the absence of a possession date in the agreement, the possession date while registering the project should be considered valid.
After hearing both sides, the MREAT chairperson Justice Indira Jain (retd) and Dr K Shivaji, member, observed that Section 13(2) of RERA as well as Section 4 (1A) of MOFA both demonstrate that the promoter has the obligation to specify the date of delivery of possession in the agreement for sale. The bench also observed that the Bombay High Court judgement of December 2017 upholding the validity of RERA had clarified that RERA does not contemplate rewriting of a contract between the flat purchaser and the promoter, and Para 256 states that by allowing the promoter to revise project timelines does not absolve the promoter of the liability under the agreement for sale.
The order dated March 10 pointed out that the possession delivery dates on the MahaRERA website were revised unilaterally without the consent of the complainant, and hence they are not binding on the complainant whereas the possession dates mentioned in the agreement are binding on both parties. Citing two Supreme Court judgements, the bench observed that handing over possession in three years is a reasonable period.
“Accordingly after adding 3 years from the date of execution of the agreement for sale (which was executed on June 28, 2013), the date of delivery of possession would be June 27, 2016. This date will include the moratorium period of 12 month as mentioned in the clause 17 of the agreement for sale. Admittedly, the promoter not handed over the possession of this flat before this date,” the order said, directing the developer to pay interest at approximately 9 per cent per annum from June 28, 2016 till actual delivery of possession.
