Case BriefsTribunals/Commissions/Regulatory Bodies

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

Case BriefsTribunals/Commissions/Regulatory Bodies

Maharashtra Real Estate Regulatory Authority, Mumbai (MahaRERA): While focusing on the definition of carpet area in Pre-RERA and Post-RERA, Coram of Ajoy Mehta (Chairperson MahaRERA) observed that,

“If the promoter is duty-bound to honour the agreement for sale in its true letter and spirit so also the allottee is duty-bound to adhere to the terms of the agreement for sale and either party cannot shun their duties and responsibilities under the agreement for sale.”

In the present matter, respondents had registered their project “EMERALD ISLE-T8” under Section 5 of the Real Estate (Regulation and Development) Act, 2016.

Complainants seeks the following reliefs:

“Refund is demanded for the excess funds collected by LAT Realty for carpet area of 57.60 square feet at the rate of Rs 28,L3L.67 amounting to Rs 1-6,20,384 plus interest at RERA applicable rate from the date of first payment.”

Issue for consideration:

  • Whether the complaint is barred by the principle of res judicata?
  • Whether the Complainants are entitled to claim refund for difference/variation in area of the said apartment and interest thereon from date of payment of the excess amount?

Respondent had raised the issue of the principle of res judicata stating that a matter that was finally decided on merits cannot be litigated again between the same parties.

However, from the submissions of the Respondent herein it is clear that the earlier complaint No. CC00600000000000414 was filed for the purpose of seeking interest for delayed possession and the Complainants in the present complaint is seeking a refund of the difference in the carpet area of the said apartment with interest as applicable thereon.

Further, it was noted that the complainants had signed a letter whereby they confirmed and agreed to their absolute satisfaction and assured the respondent that they shall not be claiming anything further through any forum/Court.

Hence, the above-stated letter certainly binds the complainants from raising any further issues with regard to the said apartment and MahaRERA expresses displeasure with regard to the complainants turning away from their own words and commitments.

Adding to the above, Authority stated that the instant complaint was filed with a different issue and hence the principle of res judicata was not applicable and thus issue 1 was answered in negative.

Definition of carpet area under Section 2(k) of the said Act. It reads thus:

“carpet area” means net usable floor area of an apartment, excluding the area covered by the external walls, area under services, shafts, exclusive balcony or verandah area and exclusive open terrace area, but including the area covered by the internal partition walls of the Apartment.”

 Under MOFA, Section 3(m), Promoter was to disclose one of the particulars in the advertisement for sale of flats and clause (i) states the particulars to the extent of carpet area of the flat including the areas of balconies whereas under RERA, balconies have been excluded in the definition of carpet area.

Coram stated that it was clear from the facts of the complaint that on the date of booking of the said apartment MOFA was in effect and on the date of the said agreement RERA was holding the ground.

A very pertinent observation was made, that the carpet area was defined differently in both the Acts.

Hence, there was no actual change but simply a variation/difference in the methodology of calculation of carpet area as per MOFA and RERA from time to time.

Since the allotment letter was dated 1-10-2015 which was Pre-RERA i.e. MOFA was applicable for calculating carpet area and after May 2017 RERA was applicable after which the said agreement was executed i.e. 20-12-2017

Therefore, no ambiguity on the issue of carpet area was found resulting in no refund and interest.

Coram while concluding added that the discrepancy/variation/difference in terms of the carpet area of the said apartment was as per the said agreement which provided that a variation of up to 3% on account of any design change and construction exigencies which the complainant was aware of and the same had been agreed upon by them. Thus, raising an issue at a later point was not acceptable nor could be changed as the agreement was binding upon both parties.

In the present matter, complainants chose to raise an unreasonable dispute in a very irresponsible manner, leading to wasting the time of the Authority.

Cost of Rs 20,000 was imposed on the complainant and the complaint was dismissed in view of the above.[Deepak Pande v. Larsen & Toubro Ltd., Complaint No. CC006000000100256, decided on 17-08-2021]


Advocate before the Authority:

Advocate Subhashree Chatterjee for the Respondent

Case BriefsTribunals/Commissions/Regulatory Bodies

Maharashtra Real Estate Regulatory Authority, Mumbai: Coram of Dr Vijay Satbir Singh (Member I), while laying out certain significant observations with respect to the provisions of RERA decided the complaint revolving around delayed possession of flat.

Background

By preferring the present complaint, complainants sought directions from the MahaRERA to the respondent to pay the interest for the delayed possession under Section 18 of the Real Estate (Regulation & Development) Act, 2016 (RERA) in respect of booking their respective flats in the respondent’s project.

Respondent failed to hand over the possession of the flat on time. Complainants sought payment of interest for the delayed possession and further stated that even after the respondent sold more than 50% of the units, it failed to form the association of allottees/ society of allottees till date. The respondent has also failed to execute the deed of conveyance with the complainants along with the other allottees of the project.

Further, it was alleged that the respondent was yet to hand over and allot the parking spaces to respective allottees and was demanding permission from the allottees to utilize the additional FSI and construct the additional floors.

Complainants further stated that they have signed the possession letter and have received the possession of their respective flats in the month of December 2019, though respondent was not ready to allot the parking as well as to form the society of the allottees.

Analysis, Law and Decision

Since the respondent did not hand over the possession of the flats to the complainants and violated the provisions of Section 18 of the RERA and the Rules made thereunder.

Bench did not accept the reasons cited by the respondent for the delay in possession of the flat and apparently the respondent promoter wanted to apply convenient clauses in the agreement to take undue benefits after commencement of the RERA.

Formation of Society and Execution of Conveyance Deed

As per Section 11(4)(e) of the RERA, promoter is liable to enable the formation of society within 3 months of the majority of allottees having booked their flats.

In the present matter, more than 51% of the allottees booked their flats and the full occupancy certificate had been obtained for the said project, hence it was statutory duty of respondent promoter to form a society of the allottees and the respondent had no authority to lay down any condition for the same as it was not permissible under RERA.

Construction of Additional 4th Floor

MahaRERA opined that the present project was registered with MahaRERA after commencement of the RERA and hence provisions of RERA would apply for this project.

Hence, as per Section 14 of the RERA, any change or modification in the sanctioned plan required mandatory consent of the allottees and therefore, if respondent wanted to modify plans including the construction of 4th floor, then it had to be obtained through requisite consent of allottees.

Adding to the above, MahaRERA held that the respondent was liable to pay interest for the period of delay in accordance with the terms and conditions of the agreement.

Selling of the Car Parking

 stated that there is an explicit provision under RERA that promoter can sell only covered car parking by charging a certain amount. Open Parking had to be handed over to society, it could not be sold in the open market.

Therefore, complainant allottees and respondent promoter were bound by the said provision.

Following Order was passed:

  • Respondent directed to pay interest to the complainants till the date of occupancy certificate.
  • Respondent promoter was entitled to claim the benefit of “moratorium period”.
  • Since the complainants want to continue in the project, they are entitled to seek interest for the delayed possession under section 18 of the RERA.
  • Respondent/Promoter directed to form a society as per the provision of Section 11(4)(e) of RERA
  • With regard to construction of additional floor, without the consent of the 2/3rd allottees, the same could not be constructed.
  • It was also directed that respondent was entitled to sell only covered car parking and no cash money be demanded from the allottees.

[Deepesh Singh v. Neelkanth Constructions, Complaint No. CC006000000089761, decided on 30-07-2020]


Advocates before the Authority:

Adv. Nilesh Garde appeared for all the complainants. Adv.Khushiram Jadhvani a/w. Adv. Manali Saraf appeared for the respondent.

Case BriefsHigh Courts

Bombay High Court: While deciding the petition which challenged the validity of the Order passed by the Maharashtra Real Estate Regulatory Authority wherein it had defined the term ‘co-promoter’ as the same was not defined in the Real Estate (Regulation and Development) Act, 2016, the Division Bench of Naresh H. Patil and R.G. Ketkar, JJ., allowed the petitioner to withdraw the instant petition after the Office of Maharashtra Real Estate Regulatory Authority withdrew its impugned Order dated 11.05.2017 which defined ‘co-promoter’.

On 11.05.2017, the Secretary, Maharashtra Real Estate Regulatory Authority had passed an Order in exercise of the powers vested in the Authority under Regulation 38 of the Maharashtra Real Estate Regulatory Authority (General) Regulations 2017. Thus ‘co-promoter’ was defined as “person(s) or organization(s) who, under any agreement or arrangement with the promoter of a Real Estate Project is allotted or entitled to a share of total revenue generated from sale of apartments or share of the total area developed in the real estate project. The liabilities of such Co-Promoters shall be as per the agreement or arrangement with the Promoters, however for withdrawal from designated Bank Account, they shall be at par with the Promoter of the Real Estate Project.”

The counsel for the petitioner argued that RERA defines ‘promoter’ under Section 2(zk) and Regulation 38 does not really empower the Authority to create a new term and notify the same in absence of statutory provisions under RERA. As per the counsel, Regulation 38 only empowers the Authority to issue orders ensuring the proper implementation of the Act and not to interpret the Act. Meanwhile the Secretary of the Authority submitted an affidavit before that Court that the impugned Order was passed only as to clarify the definition of ‘promoter’ and to bring about more transparency in the process of registration, ease of maintenance of accounts etc.

The counsel for the State and Authority put forth before the Court that the impugned Order has been thus withdrawn, and the same shall be replaced by an appropriate Order as expeditiously as possible with effect from the same date i.e. 11.05.2017. Not going into the averments made by the respondents in their affidavits, the Court accepted the request of the respondents to dispose off the petition as the grievance of the petitioner had been taken care of. [Ismail Ibrahim Patel v. State of Maharashtra,  2017 SCC OnLine Bom 9132, decided on 14.11.2017]