Rera tribunal tells builder to refund Rs 1 cr for late possession

File photo of an under-construction building

Stating that a builder cannot change the date of possession unilaterally, the Maharashtra Real Estate Regulatory Authority's (RERA) appellate tribunal directed a construction firm to refund around Rs 1.1 crore with interest to two persons who had withdrawn from a delayed project. As per the tribunal, the project was delayed by three years.

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According to a report in Mumbai Mirror, Bandra residents Jyoti and Kishore Narang had booked a 1,300-square-foot flat in November 2012 in the under-construction Wintergreen located near Rivali Park in Borivli East. The flat worth Rs 1.5 crore was assigned a possession date of February 2016, however, the date was subsequently pushed to March 2018 and then further revised to December 2018.

To date, the duo had paid 78 per cent of the Rs 1.5 crore. Promoter-builders CCI Projects had registered the project under Real Estate (Regulation and Development) Act, which came into effect in May 2017, since it was pending and set the delivery date as December 2019.

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A spokesperson for CCI Projects said, "We, at Rivali Park, maintain a very transparent and fair approach. The Central government, through its last-mile funding scheme, has supported us a long way. While we respect the tribunal's views, we are exploring all possible remedies against it, as advised by our legal team."

He further added, "Work at our Wintergreen project site is on its last leg. Very soon, we will initiate steps towards handing over possession to our esteemed allottees."

The project comprises six buildings and 700 flats. The builder said the possession date was revised for "reasons beyond his control", while his lawyer Abir Patel said the buyers had accepted the extension and paid even after the revised date in 2017.

The tribunal said, "It cannot be ignored that the promoter has unilaterally extended the date of possession...allottees and promoter have not mutually extended the date of possession. Acquiescence or waiver must be clear." The tribunal also did not accept the builder's argument that buyers, by their action, had accepted the revised possession date and hence can seek no refund now.

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The tribunal noted that the builder defaulted on handing over possession on the agreed date. It mentioned that there was a delay of over three years prior to the COVID-19 outbreak and the financial crisis, thus not accepting the lockdown as a reason for the delay.

"The flat purchaser is defined as an allottee. There is nothing in the Act which says the purchaser is an investor." the judgment said. The tribunal rejected the builder's contention that being "investors", the Narangs did not want to execute the agreement for sale.

The builder told the tribunal that the project had received "last mile funding" this year and is governed by the Swamih Scheme of State Bank of India. It submitted that refund with interest under the scheme is "impermissible".

Also Read: No more sale agreements without MahaRERA stamp

Meanwhile, the tribunal agreed with the allottees' counsel Jai Chhabria, who said that the scheme cannot deprive them of enjoying their statutory right of refund with interest and compensation under Section 18 of RERA. The November 24 order by the tribunal bench of S K Kolhe (judicial) and S S Sandhu (administrative) was on an appeal Narangs filed against a September 2018 MahaRERA order.

MahaRERA had directed the builder to refund the amount as per the booking conditions which allowed for 10 per cent withdrawal by the builder.

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