In a move that will gladden home-buyers, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed Su Sharda Edifice LLP to pay a compensation of Rs1 lakh for causing mental agony and Rs20,000 as cost of complaint to two home-buyers for delayed possession. MahaRERA also allowed the home-buyers to withdraw from the project and entitled them for refund of the amount they had invested Rs99.90 lakh with interest of 10.40% from the date of payment till final realisation including cancellation of deed at the cost of developer.
Su Sharda Edifice LLP, the developer of ‘Celestial’, an under-construction 23-storey project at Kurla, arbitrarily revised the possession date to 2023-24 causing hardship to home-buyers. The developer tried to take refuge behind the words 'as far as possible' mentioned in the agreement to justify the delay.
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Mumbai Mirror report says that MahaRERA member Madhav Kulkarni issued the order for compensation after ruling that the developer Su Sharda Edifice LLP arbitrarily revised the possession date from 2017 /2018 to 2023 / 2024 causing mental trauma and hardship to the home-buyers.
Kumar Gowda and another home buyer had booked flats in ‘A’ wing of Celestial in 2015/ 2016. As per their agreements, they were promised possession in 2017 and 2018. They paid over 75% of the flat consideration of Rs1.13 crore. However, the developer later unilaterally revised the possession date to 2023 and 2024 without the consent of the home-buyers.
The lawyer appearing for the home-buyers submitted that the developer had represented that all necessary permissions had been obtained but later changed the original plan and allotted certain portions for commercial establishments without the consent of purchasers. The home-buyers had appealed for withdrawal from the project and refund of the amount with interest and compensation since the developer was unable to deliver possession of flat as per their original agreement.
The developer’s lawyer contended that the alleged complaint was false and that the construction was to be completed 'as far as possible' on or before 31 December 2018 but he denied that any date of possession had been fixed in absolute terms. He also argued that the transaction was under the provision of Maharashtra Apartment Ownership Act, 1970 and, therefore, a complaint under the provisions of RERA (Real Estate Development and Regulation Act, 2016) is not tenable.
The lawyer also claimed that there was a 27-month delay due to the notification for the new Development Plan 2034 during which the Brihanmumbai Municipal Corporation (BMC) did not process the file.
Projects above 4,000sq mtrs (square metres) are required to provide 5% to 10% amenity space to the corporation and the developer made an application for a further commencement certificate (CC) which was made available only in February 2018. The approval for the CC came in April 2019 and, therefore, the 27-months delay needs to be condoned and the date of possession should be calculated as 31 March 2021. The lawyer also blamed the impact of demonetisation, GST (goods and services tax) roll out on the real estate sector, and the NBFC scams for impacting the line of credit for the delay.
While dismissing the developer’s arguments regarding the delay, Mr Kulkarni ruled that the developer had failed to provide possession as per the agreement without there being circumstances beyond his control.
Mr Kulkarni observed “It is well settled that a developer must deliver possession within two to three years since the booking by the allottee” while directing the developer to refund the investments with 10.40% annual interest within 30 days from the order.
