Mumbai: RERA gets flat-buyers money back with interest from builder

Vaibhav Singh fought the case himself

In a first, since the formation of the Real Estate (Regulation and Development) Act, 2016 (RERA), the MahaRERA (RERA in Maharashtra) has passed an order in favour of a flat buyer on the basis of an allotment letter, instead of the mandatory registered sale agreement required for registering such complaints. Real estate lawyers and activists have welcomed the order seeing it as a big move in favour of the consumer.

Flashback
Vaibhav Singh, 37, a resident of Navi Mumbai, who works with a telecom major, had made a pre-launch booking in an upcoming project called Anantya 1A in Chembur by Radius & Deserve Builders (LLP) in April 2016 and was given an allotment letter.

Singh stated that as per advertisements put out by the builder, the flat was a studio apartment of around 221 sq feet carpet area, priced at Rs 49.49 lakh. In his complaint, he said that the allotment letter did not mention the area of the flat or the year of completion. Nevertheless, Singh over a period of a few months, paid Rs 10,27,692 as the booking amount.

The dispute
Then, in June 2017, soon after RERA was formed, Singh checked the builder's details on RERA's website and found that the date of completion of the Chembur project had been changed from 2020 to 2024 and the area of the flat was increased from 221 sq feet to 225 sq feet. The price of the flat, too, had increased from Rs 49.49 lakh to Rs 50.24 lakh.

On September 6, 2017, Singh sent an email to the builder saying he wanted to cancel the booking. The builder immediately responded that Singh would have to forfeit 10% of the booking amount on cancellation.

Singh refused to accept the terms of the cancellation and correspondence continued between him and the builder until December 2017. Finally, in February this year, Singh took his complaint to RERA.

The Observation
B D Kapadnis, member and adjudicating officer, MahaRERA, who headed the hearing, passed an order on February 7, 2018, after Singh, on his own behalf, and lawyer Vibhav Krishna, for the builder, represented their arguments and counter arguments.

Section l2 of RERA provides that a person is entitled to get back 100 per cent of his investment made on property, in addition to interest on it, if there is any loss or damage caused to him by reason of any incorrect, false statements included in the prospectus, advertisements or notice of the project. Kapadnis said, "Under these circumstances, the complainant is entitled to get a refund of Rs 10,27,692, with simple interest at the rate of 10.05% from the date of its payment to the respondents [builder], till the same is fully refunded. He is also entitled to Rs 20,000 towards the cost of fighting his case."

Advocate Vibhav Krishna, who represents the builder, said, "We are in the process of considering the order and shall be filing an appropriate appeal. As the matter is sub-judice, we won't discuss the merit of the case."

Experts say
Advocate Nilesh Gala, who assisted Vaibhav Singh in drafting his arguments, said, "This is the first time that a letter of allotment has been accepted by RERA and they have subsequently passed an order stating that the builder should pay the complainant. Singh had argued the matter before the RERA in person. This case will now compel RERA to accept all similar complaints on the basis of allotment letter."

Advocate Vinod Sampat, founder of Cooperative Societies Users Association, said, "The law stipulates that the builder cannot collect more than 10 or 20 per cent of the agreement value under RERA and MOFA, respectively. This is a good order, which will be a lesson to dishonest and fraudulent builders, and may be the first order under RERA in such a short span of time, unlike in the consumer court, where it takes much longer."

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