MahaRERA denies relief to buyers stuck in stalled Santacruz project

Mumbai: When four home buyers of a stalled ultra-luxury project in Santacruz approached MahaRERA to exit the project and sought a full refund from the developers, who failed to execute an agreement for sale, despite being paid 75% of the total flat consideration, the authority denied them relief on grounds of lack of documents proving possession date specified by the developer.

The complainants said the construction of the Avenue 54 project by Sumer Radius Realty Private Ltd in Santacruz is incomplete and it is far from completion even on December 30, 2024. However, they failed to provide supporting documents specifying the details.

The complainants, three home buyers and a private company, booked apartments in Avenue 54 project. They approached MahaRERA stating that they booked their flats in 2012-13 and paid 75% of the total flat consideration but the developer failed to execute an agreement for sale which violates Real Estate (Regulation and Development) Act.

They were all issued provisional allotment letters in December 2016 and were promised possession by December 2019, according to their complaint. According to the registration page on MahaRERA portal, the project, located at a prime location on SV Road in Santacruz, has 1 tower with 13 floors, and five towers with 22 floors and offers flats ranging from 3 BHK to 6 BHK.

In their complaints, it is stated that the promoters have wilfully neglected and failed to honour their obligations under the provisional allotment letter. The project has been stalled for a long time, and no work has been carried out in the last seven years due to the absence of necessary permissions and pending litigations and legal action under SARFAESI Act initiated by the financial institution.

The promoters are also facing criminal actions from law enforcement agencies for fraud and cheating, they said. The Economic Offences Wing had lodged an FIR against Sumer Radius Realty Pvt Ltd for borrowing ₹111 crore from Yes Bank for Avenue 54, and allegedly diverting ₹52.12 crore to Radius Estate Projects Private Limited and RSC Infra Realty LLP.

The complainants, represented by advocates Dharam Jumani, Mihir Nerurkar, and Rushabh Parekh of ABH Law, also said the developers were aware of the necessary permissions required from the Airport Authority of India, and Slum Rehabilitation Authority. However, they have not been able to obtain them.

They also added that despite being aware of the absence of necessary permissions, the developers/promoters kept on demanding and receiving substantial amounts of money way beyond the threshold of 10% consideration permissible under RERA and 20% consideration permissible under Maharashtra Ownership of Flats Act (MOFA) from the complainants. Under Section 13 (1) of RERA a promoter cannot accept a sum of more than 10% of the cost of the apartment from a home buyer without first entering into a written agreement for sale and registering it.

The complainants said the construction of the project is incomplete and the project is far from completion even on December 30, 2024. The four buyers sought to exit the project and sought a full refund under Section 18 of RERA apart from compensation. Three of the buyers had paid ₹4.57 crore out of flats costing ₹5.78 crore, and one buyer had paid ₹6.46 crore out of ₹8.17 crore.

The promoters were not represented in the previous hearings and had not responded at all to the complaints, so MahaRERA decided to proceed ex-parte. After hearing the arguments from the complainants, MahaRERA chairperson Ajoy Mehta held that the promoters had violated Section 13 of RERA by accepting more than 10% of the flat consideration without first registering an agreement for sale and were liable for penalties under Section 63.

For reliefs under Section 18, Mehta said in his January 13 order that in the absence of an agreement for sale specifying the possession date, the words “as the case may be” in section 18 (1) (a) indicated that it could be any other document specifying the date of possession and agreed upon by both the parties.

“The Authority, therefore, notes that in the absence of an agreement for sale or any other document which mentions the date of completion (possession), the complainants are not entitled to reliefs under Section 18 of the Act as the date of possession promised by the respondents as per RERA is yet to arrive. i.e. 31.12.2024,” observed Mehta.

The order levied a ₹50,000 fine on promoters for not registering the agreements for sale and asked them to be executed within the next 60 days.

Avenue 54 is a luxury project promoted by Sumer Radius Realty Private Ltd, with Sumer Group’s Sumer Buildcorp Pvt Ltd as co-promoter and Sanjay Chhabria-promoted Radius Estate Projects Ltd as the second co-promoter.