In an unprecedented case, Maharashtra Real Estate Regulatory Authority (MahaRERA) has asked a home-buyer to pay a penalty (in the form of interest) to the developer for delay in payment.
This judgement stands out in stark contrast since the Authority usually has to issue directives to developers to pay penalties to home-buyers for delayed possession.
In August 2019, the home-buyer Ms Suvarna Nazrekar had signed an agreement with the developer for an under-construction apartment in Pune. However, the home-buyer had not made any payment despite several demand letters between August and December 2019. The developer SMP Namrata Associates filed a complaint in MahaRERA against a home buyer for not making payment.
In January 2020, the home-buyer sent a legal notice to SMP Namrata Associates for non-allotment of car parking space. The home-buyer quoted the non-allotment of car parking space and the increased GST (goods and services tax) charges as the reasons for not making payments to the developer.
In its complaint, SMP Namrata Associates sought MahaRERA’s directions for cancellation of the agreement and forfeiture of the amount paid by the buyer at the time of booking. The developer shared that it was willing to go ahead with the agreement if the buyer was willing to make the payments along with interest. The home-buyer asserted that she was willing to pay the outstanding dues but sought directions be issued to the builder to waive off the interest amount.
The home-buyer maintained that the complainant was a developer and so could not file a complaint against the allottee since there is no provision under RERA to file such a complaint.
MahaRERA member, Vijay Satbir Singh held that the home-buyer, being an allottee, is liable to make payments in accordance with the terms and condition of the sale agreement. He pointed out that the provision of section 19(6) of the RERA is required to be perused, which reads as under:
“11(6) Every allottee, who has entered into an agreement for sale to take an apartment, plot or building as the case may be, under section 13, shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and shall pay at the proper time and place, the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges, if any.”
MahaRERA said that in case of any default on the part of allottee or the promoter, either party would be entitled to seek interest for such a default as prescribed by the Real Estate (Regulation & Development) Act, 2016.
Mr Singh added in his order “Accordingly, if the respondent (buyer) has made any default in timely payment as per the agreement for sale, she would be liable to pay interest for the delayed payment at the rate of Marginal Cost Lending Rate (MCLR) of SBI plus 2% as prescribed under RERA.”
MahaRERA has directed the home-buyer to pay the builder within a month, failing which the developer would be entitled to terminate the agreement for sale in accordance with the terms and conditions of the agreement for sale.