MahaRERA Asks Developer to Pay Rs60 Lakh as Penalty for Delay in Possession
Moneylife Digital Team 12 January 2021
In a recent order, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed Conoor Builders to pay a home-buyer in its Gateway project at Andheri (West), interest at marginal cost lending rate (MCLR) of SBI plus 2% for a three-year delay in possession. According to the home-buyer’s lawyers, the total penal amount is estimated to be around Rs60 lakh. 
 
MahaRERA member, Vijay Satbir Singh, in his order, clarified that the builder cannot transmute its statutory liability to the land owner as there is no privity of contract between the complainant and the land owner (AH Construction) since land owner is not party to the registered sale agreement executed between the complainant and the respondent. 
 
The complainant Sushant Karkera had booked a flat (total consideration amount of Rs2.19 crore) in November 2014. 
 
According to the complainant, though he has paid substantial amount of Rs1.93 crore, which amounts to 85% of the total consideration, the respondent had failed and neglected to handover possession of the said flat to him on the agreed date of possession mentioned in the agreement for sale. 
 
The builder had committed to hand over possession on or before 31 December 2016. The complainant was represented by his chartered accountant Ashwin Shah and advocate Sandeep Manobarwala, who contended that the builder, without giving any intimation had unilaterally extended the project completion date first to December 2019, which was further extended to December 2020 while registering the project with MahaRERA.
 
Thereby the respondent had violated the provision of section 18 of the RERA. Hence the complainant said that he is entitled to seek interest for the delayed possession from 1st January 2017 till the actual date of possession.
 
Conoor Builders was represented by advocates Anil D’Souza and Saroj Agarwal. The counsel for Conoor Builders argued that the project got delayed due to genuine and unavoidable difficulties attributable to land owner, AH Construction. 
 
The developer’s counsel added that the complainant was aware that AH Construction was owner as well as promoter-owner of the property since the sale agreement clearly mentioned AH Construction has all obligations to procure requisite permissions for the said building. But the complainant refuted this and said that he had no information about the contract with AH Construction and that he had paid money for the apartment to the respondent (Conoor Builders). 
 
The complainant relied upon earlier apex court judgments in case of Vaidehi Akash Housing Pvt Ltd and Goregaon Pearl CHS and stated that the owner is not liable to pay interest for delay in possession since he has no privity of contract with the owner.
 
The MahaRERA order added that the complainant was no way concerned with the dispute between the land owner and the respondent. The order mentioned that if the project was getting delayed, then the respondent should have informed the complainant and should have revised the date of possession in the agreement by executing a rectification deed or should have offered a refund.
 
MahaRERA had earlier passed an interim order (in this case) on 7 October 2020 whereby directions were given to the respondent to handover possession of the flat to the complainant within a period of 10 days on payment of outstanding dues by the complainant and to decide the other issue raised by the complainant towards the interest for the delayed possession under section 18 of the RERA and the case was adjourned for further date. 
 
Accordingly the complainant had taken possession of his flat during the pendency of this complaint. Hence, the complaint was heard substantially on the issue of the interest for the delayed possession raised by the complainant under section 18 of the RERA.
 
Moneylife spoke to advocate Anil D’Souza who said "OC has been received for the project already, and complainant has already taken possession. We will appeal in the RERA Appellate court”. 
 
Comments
tillan2k
1 year ago
Good advertisement fo rRERA some one may ask in how many cases such decisions has been given in last 6 month Let RERA take up Ajmera builders and many other cases from Thane Ghodbunder areas . First carry out ball park survey of projects ..
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