Maharashtra Real Estate Appellate Tribunal, Mumbai: The Coram of Indira Jain J., (Chairperson) and Dr K. Shivaji, Member (A), expressed that, if the change of promoter without following the procedure prescribed under the law is left to the wisdom of society, it will not only render the relevant provisions of revocation of registration redundant but also create chaos and uncontrollable situation leaving the fate of allottees /flat purchasers in doldrum.

Factual Matrix

Complainants had booked apartments in a real estate project, respondent 2 was initially appointed as a developer by the society. In 2018, the society terminated the development agreement executed with respondent 2 and revoked the power of attorney. After the termination of the development agreement, society appointed Mangal Buildhome Private Limited as a developer to complete the project.

Complainants stated that the appointment of a new developer by society was in the contravention of the provisions of Section 15 of the Real Estate (Regulation and Development) Act, 2016 and therefore, they filed complaints before MahaRERA to seek direction to execute and register agreements for sale, cancellation of a development agreement with new developer and completion of the project.

As per the interim order the society was directed to convene a meeting of allottees and come up with a way forward for the completion of the project and the interim order restrained both the developer from creating third party rights.

The above-said interim order was challenged. Further impugned order dated 3-12-2021 came to be passed by the Chairperson, MahaRERA while disposing of complaints on merit.

Moot Question

Whether the action of the society in appointing a new developer is prima facie in accordance with the procedure prescribed under the law?

In the present matter, though society had come with a plea that intimation of revocation of registration was sent to the Authority, it was evident that no decision was taken by the Authority n letter written by the Society.

Law requires the decision of the Authority and in the absence of such decision mere intimation by society to the Authority would not empower the society to appoint a new developer during the subsistence of registration of the project.

Coram also noted that the society did not obtain the prior written consent of two-thirds of allottees at the time of appointment of a new developer after the termination of the development agreement entered into with the erstwhile developer.

Prima facie, the action of the society in appointing a new developer was not in consonance with the procedure prescribed under law. Hence, stay was not granted. [Mangal Buildhome (P) Ltd. v. Ramasubramanian R. Nadar, Appeal No. AT006000000053504, decided on 21-4-2022]

Advocates in appearance:

Mr. Sanjay Jain, Advocate, for appellants in Appeal Nos.AT006000000053504, AT006000000053506, AT006000000053508, AT006000000053509 and for respondent No.3 in 4T006000000053512, AT0060000000535 15, AT0060000000535 13 and AT0060000000535 14,

Mr. Harshad Bhadbhade, Advocate, for appellant in Appeal Nos. AT006000000053512, AT006000000053515, 4T006000000053513 and 4T006000000053514 and for respondent No.3 in Appeal Nos.4T006000000053504, AT006000000053508, AT006000000053506, AT006000000053509

Mr, Nilesh Gala, Advocate, for respondent No.1 in Appeal Nos. AT006000000053504, AT006000000053508, AT0060000000535 12, AT00600000005351s.

Mr. Nimay Dave, Advocate for respondent No.1 in Appeal Nos.AT006000000053506, AT006000000053509, AT006000000053513, AT006000000053514

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