MahaRERA Orders Developer To Refund Money with 9% Interest since Project Stuck due to Defence Curbs
Maharashtra Real Estate Regulatory Authority (MahaRERA) has ordered the developer of a project to refund Rs47.46 lakh at 9% pa (per annum) interest to a home-buyer. The developer was also directed to pay Rs20,000 to the home-buyer towards cost of the complaint. Construction of the Kanjurmarg project was stopped since they could not obtain the naval NoC (no objection certificate) because of its proximity to a naval housing colony.
MahaRERA member Bhalchandra Kapadnis issued the order after hearing the case based on a complaint by Snehalata Deokar who had booked an apartment in the 25-storey Avante project by Sanjeevani Vyapar LLP.
As per the project website, it was proposed to be developed under a joint venture between the Ashwin Sheth group and Emami group.
Ms Deokar had booked the apartment (flat number 1201 in C wing) in 2015 by paying Rs47,26,785 out of the total cost of Rs1,53,41,500 and the developer had promised possession by December 2019. The developer had agreed to hand over possession by 31 December 2019.
Ms Deokar’s lawyer, advocate Sameer Bhandari said that she now wished to withdraw from the project since the developer could not deliver possession as promised by December 2019.
Advocate Pragathi Malle, the counsel for Sanjeevani Vyapar LLP, argued that there is still time for the revised project completion date of 30 June 2022 and, hence, the complaint was not maintainable. She added that the Bombay High Court (HC), in its 27 February 2019 order in Tirandaz Shubha Niketan Cooperative Housing Society case, had said that the NoC from the naval department was not required for construction near the naval housing colony.
However, despite the Bombay HC ruling, the commencement certificate was not granted by the municipal corporation of greater Mumbai (MCGM). In 2019, the developer had challenged the MCGM letter refusing a commencement certificate (CC) in a writ petition which is still pending before the High Court.
The developer’s lawyer explained that her client had kept the complainant informed through emails with respect to the current status of the project including the status of the Naval NoC and commencement certificate.
She claimed that the developer company was within its rights to forfeit the earnest money paid by the complainant if the sale of immovable property fell through due to the default of the purchaser and asked for the complaint to be dismissed.
MahaRERA member Mr Kapadnis held that the developer accepted almost 30% of the total cost of the apartment, in violation of both Maharashtra Ownership of Flats Act (MOFA) and Real Estate (Regulation and development) [RERA] Act which authorises the acceptance of not more than 20% and 10% of total cost of apartment, respectively, without first executing and registering the agreement for sale.
Mr Kapadnis mentioned that the developer has mentioned 31 December 2019 as the proposed date of completion (on the project webpage) and it would be considered as the agreed date of possession. He said that “the revised date unilaterally declared by the developer while registering the project with MahaRERA is not a material date but the agreed date is important to compute the delay in the ratio laid down by Bombay HC in the Neelkamal realtors Pvt Ltd vs Union of India. Hence this case comes u/s 12 of RERA”.
He noted that the premises in which the complainant was residing has been demolished for redevelopment and the complainant had to shift to rental premises by paying a huge rent.
He observed that “There is no dispute on the point that the planning authority MCGM has not granted the commencement certificate because the naval authority has not granted NOC for construction of the project... Without the commencement certificate, the respondents should not have launched the project and accepted the booking.”
As per Section 4(2)(c) of RERA, at the time of registration of a project, the authenticated copies of the approvals and commencement certificate from the competent authority obtained in accordance with the law, as may be applicable for the respective project, are to be uploaded. In this case, the respondent launched the project without obtaining the commencement certificate.
Mr Kapadnis said “Since the respondents have defaulted in obtaining the commencement certificate, the money deposited by the complainant cannot be treated as earnest money liable for forfeiture as contended by the respondent.”