NEWS

MahaRERA denies interest on delayed possession to home buyer

October 18, 2018

The Authority also directed the developer Forefront Private Ltd to advance its possession date of December 2020, and deliver the possession by March 31 2019 with the Occupancy Certificate.

In an order that is likely to set a precedent, the Maharashtra Real Estate Regulatory Authority has denied interest on delayed possession to a home buyer, terming that interest at this juncture could “jeopardise” completion of the housing project.

The Authority also directed the developer Forefront Private Ltd to advance its possession date of December 2020, and deliver the possession by March 31 2019 with the Occupancy Certificate. It assured the home buyer that if the developer fails to adhere to the deadline, she would be at liberty to demand interest for the delayed period.

Home buyer Rujuta Thatte has booked flat 401 in Forefront Group’s Forefront Primeria at Vile Parle via a registered agreement for sale dated September 9, 2015. The agreement mentioned June 30, 2017 as the date of possession, but the developer failed to deliver possession, and hence she sought interest on delay as per provisions of Section 18 of Real Estate (Regulation and Development) Act (RERA). By far, MahaRERA has been holding that home buyers are entitled to interest if the developer had failed to deliver the project by promised possession date.

Advocate Satyajeet Joshi, appearing for the developer, argued that the construction work of the project could not be completed due to reasons beyond the developer’s control. He submitted that there was a pending litigation filed by the society members which was eventually disposed of in 2017. He also submitted that 11 floors of the building have been completed, and approvals for only two floors are pending. The Authority gave various opportunities to both the parties to settle the matter amicably, but no settlement could be reached.

On the last date of hearing, Thatte, who represented herself along with advocate Shirish Deshpande and Shashikant Kadam, submitted that at this stage she was more interested in completion of the project, and she will not insist on the developer paying interest for the delayed possession.

Relying upon the Preamble of RERA, MahaRERA chairperson Gautam Chatterjee observed that MahaRERA has been established not only as a quasi-judicial body but is also entrusted with regulatory functions. “It is obligated to implement the provisions of the Act in a harmonious manner and not in isolation, to ensure that every registered project gets completed and the interest of all the stakeholders are protected,” he said in the October 16 order.

Citing Section 4 (2)(1)(D) of RERA which states that 70 per cent of the amounts realized from the allottees shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost, and shall be used only for that purpose. The Section also states that amounts from the separate account shall be withdrawn by the promoter in proportion to the percentage of completion of the project with the certificate by an engineer, an architect, and a chartered accountant.

“Keeping in mind the larger interest of all the allottees of the project, awarding interest at this stage would mean jeopardizing the projection completion. Money for the interest payment will have to be taken out from the separate account, which is meant specifically for the completion of the project and would eventually slow down the progress of the project work,” Chatterjee said in his order.

He said Rule 4 of MahaRERA rules, 2017 states that the revised date of possession has to be commensurate with the extent of balance development. Observing that the revised possession date of December 2020 given by the developer was an “unreasonable” time period for completion of the project, Chatterjee directed the developer to hand over possession by March 31, 2019 and if the projects gets delayed beyond that date, Thatte would be at liberty to see interest on delay.

Either aggrieved parties can file the first appeal against the MahaRERA order before the Maharashtra Real Estate Appellate Tribunal (MREAT) presided over by Justice (retd) KU Chandiwal. They can file a second appeal before the Bombay High Court only on a point of law.

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Source:realty.economictimes.indiatimes.com