Mumbai: MahaRERA disposes off homebuyer plea seeking compensation for delayed possession over arbitration clause in Agreement for sale

Mumbai: MahaRERA disposes off homebuyer plea seeking compensation for delayed possession over arbitration clause in Agreement for sale

Sweety AdimulamUpdated: Monday, January 17, 2022, 11:08 PM IST
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MahaRERA |

In a recently passed order by MahaRERA Chairman Ajoy Mehta dated January 14 2022, the plea of aggrieved homebuyer has been disposed off, who were seeking relief in terms of compensation over delayed possession of their booked flat by their developer. However, the regulatory authority dismissed their petition following arbitration clause mentioned by the developer in the agreement of sale.

The matter is about homebuyers named Ayyaz Khan and Saba Khan who purchased Rs 2.54 crore house in project Alta Monte and Signet of Era Realtors Pvt Ltd located in Malad East in year 2014. Of total consideration amount Rs 1.86 Crore already paid by these buyers. Wherein, they both entered into agreement for sale and possession of flat was promised in 2017. Following the delay, they approached MahaRERA seeking relief with demand of interest till thc date of posession together with compensation.

While the developer also filed an affidavit with reasons for delay in possession of the property stating that the delay was caused since it is a Slum Rehabilitation Project in which there were agitations from Slum dwellers, delay in regulatory approvals and moreover, being no environmental committee in the state, they had to approach Central Govt for all environmental clearance, due to these reasons the development was delayed. The developer further argued that whether Real Estate (Regulation and Development) Act,2016 ("RER Act") will prevail in the present case? As in the registered agreement for sale it is mentioned that, while defining possession date it also provides for arbitration proceeding in case of dispute. Thus, it asked that the matter be referred for arbitration.

After considering both parties, the MahaRERA made observations that the Parties will have to now abide by the terms of the Agreement for Sale. They cannot take recourse to RERA for a disputed issue for which the available recourse was defined in the agreement then itself.

On this issue, the homebuyer Khan said, "We will definitely challenge this order in Appellant tribunal and if needed we will also approach Supreme Court. The order passed forfeit the main objective of MahaRERA. Also, the plea was seeking compensation for delayed possession where the cause of arbitration comes?"

Similarly Advocate Godfrey Pimenta commented, "The MahaRERA established and exclusively given powers to handle housing related disputes. If this order sustains it will give a wrong message. Moreover, even under MOFA act there is a standard format of agreement of sale that a developer has to follow in that there is no clause of arbitration. The developer has made the arbitration clause by his own which is incorrect. The MahaRERA should have pointed out this mistake."

Pimeta added other developers may also take advtange and put such arbitration clause in the agreement of sale and MahaRERA through this order will have no authority to pass any order, therefore it needs to be challenged.

Meanwhile, the Maharashtra real estate regulatory authority has over-ruled its own previous judgment passed by the Member & Adjudicating Officer, MahaRERA, Mumbai B.D. Kapadnis. In this said order passed in December 2017, the homebuyer Ganesh Lonkar had filed a complaint against D.S. Kulkarni Developers Ltd over delayed possession of flat seeking compensation. Here, the developer had similarly contended that the complainant must take the matter to the Arbitrator instead of bringing it before MahaRERA. MahaRERA does not get jurisdiction to adjudicate upon it. Wherein, the order was passed asking the developer to pay interest at the rate of 10.05% on the amount accepted for every month of delay till handing over of possession.

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