Housing regulator Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued a recovery warrant for a refund of Rs 21.75 lakh against developer Bhoomi & Arkade Associates for the attachment and auction of an undelivered flat. The warrant also pertains to other unsold inventory not booked or mortgaged to financial institutions.
In the warrant dated August 23, issued under section 40(1) of RERA, MahaRERA, secretary Dr Vasant Prabhu directed the Palghar Collector to recover the amount with 9 per cent interest under the Land Revenue Recovery Act 1890 and Land Revenue Rules 1967. The interest on the accumulated amount has to be charged until the entire amount is refunded. Besides, Rs 20,000 has to be recovered as a cost of the complaint.
The warrant was issued in response to a complaint filed by Vijay Lal and Premlata Menaria about the flats they had booked in Project “Acropolis II”. Menarias had initially booked two flats (No 1104 and 1105) in Acropolis II. Subsequently, they cancelled the booking of flat no 1104 and the developer agreed to adjust the money paid towards flat No.1104 against the payment of flat No. 1105. The complainant had paid Rs 21.75 lakh till June 2016 to the developer.
However, the developer did not execute the agreement for sale. The complainants contended that the developer verbally agreed to hand over the possession of the flats by November 2017, but did not fulfil the promise. They also contended that although the developer had mentioned the area of the flat as 368.58 sq ft in the allotment letter, the area was shown as 336.14 sq. ft on MahaRERA website. As the project remained incomplete, the complainant buyers cancelled their bookings by sending a notice on May 24, 2018.
During the hearings before MahaRERA, the developer contended that they received Rs. 21,04,500 from the complainants but after deducting the charges for cancellation of the agreement and the brokerage, the refundable amount stood at Rs 19,92,260. The developer claimed that this refund was offered to the complainants, but they did not accept it. The developer also claimed that upon the termination or cancellation of the allotment, they would be entitled to retain cancellation charges minimum of 2% of the total consideration value or such losses or damages suffered in the sale of the concerned flat to a new purchaser, whichever is more. The balance shall be refunded only after a new purchaser was found for the surrendered flat.
Subsequently the developer claimed that the MahaRERA tribunal had granted time for obtaining occupancy certificate (OC) up to December 31, 2018, for the entire 15 wings and the OC was obtained on January 14, 2019. After long deliberations, MahaRERA issued the final order dated December 2, 2020 directing the developer to refund Rs 21.75 lakh with 9 per cent interest. When the developer did not comply with the order, the complainants filed for non-compliance which was heard in July 2021.
In his order issuing the warrant, Dr. Vasant Prabhu, Secretary MahaRERA said, “I find that the respondent developer has contravened section 13 (1) as well as section 12 of the RERA. The complainants are entitled to get the refund of their amount with interest at a prescribed rate.”
He also directed that if arrears remain after the attachment and auction of flat 1105 and other unsold inventory, then the movable and immovable properties of the defaulting developer can be attached. The order said that to ascertain the inventory of his unsold properties, the Collector could adopt procedure similar to Order 21, Rule 41 of Code of Civil Procedure (CPC) which is to ask the debtor to disclose his property and produce the property card, failing which he can be sent to jail for 3 months.
The warrant also mentions that the land on which the project is being implemented, apartments that are already booked to other allottees and apartments that are mortgaged to financial institutions/bank should not be attached, so that the project could be completed.
Advocate Sulaiman Bhimani of SOLICIS LEX appeared for the complainant, while advocate Shreenivas Acharya represented the developer.
