by THO
MUMBAI: The Maharashtra Real Estate Regulatory Authority (MahaRERA) cannot force parties in conflict to settle their disputes, the Maharashtra Real Estate Appellate Authority said in a recent ruling. Responding to an appeal filed by Shekhar Singh, who accused a prominent city builder of not giving possession of a flat within the due date, the appellate authority directed the developer to compensate Singh on account of the delay.
Singh had purchased a flat in Rustomji Seasons, developed by Keystone Realtors, for ₹ ₹5.53 crore excluding taxes. As per the sale agreement drawn up in 2018, the flat was to be handed over to him by December 31, 2019.
Disputes between Singh and the developer started in July 2020, when the latter offered him possession of the ready flat and asked for ₹70.81 lakh towards various charges. Out of this amount, Singh disputed the demand of ₹3.54 lakh towards workers’ welfare cess and sought a deduction of ₹25.15 lakh towards interest on account of the delay in handing over the flat. The developer, however, insisted on payment of the entire demanded amount.
Singh then approached the MahaRERA through advocate Parth Jain of Jain Law Parnters, seeking compensation for the delay. On June 27, 2022, the MahaRERA ruled that the promoter had violated section 18 of the RERA Act, 2016 as he had failed to handover possession of the flat on or before December 31, 2019. But instead of granting relief to the flat buyer, the authority directed the parties to resolve the dispute amicably and file consent terms in two months.
Singh then appealed against the order before RERA appellate tribunal. The developer contested the appeal, contending that the delay was due to pending permissions from various governmental authorities and the Covid-19 pandemic.
The appellate tribunal comprising Shriram Jagtap and Shrikant Deshpande, however, refused to accept the excuse and held that flat buyers cannot be allowed to suffer on account of delays on the part of developers. It also rejected the claim about the pandemic as a reason for delay as the date of possession was well before the first lockdown was announced in March 2020.
In the order dated January 27, the appellate tribunal held that the RERA cannot force parties to settle disputes amicably. It also struck down the demand for workers’ welfare cess from the flat buyer, observing that while payment of such cess to the government is a statutory obligation of the promoter (developer), the flat buyer was not obliged to pay the amount since it was not mentioned specifically in the sale agreement.
The tribunal directed the developer to pay Singh interest at the rate of around 10% (State Bank of India’s prevailing marginal cost lending rate + 2%) on the amount of ₹5.25 crore from January 1, 2020 to July 1, 2020 on account of delay in handing over possession of the flat.
