MREAT upholds MahaRERA order granting interest on delayed possession

Mumbai: In a relief to eight homebuyers of DB Ozone project in Mira Road, the Maharashtra Real Estate Appellate Tribunal (MREAT) in two separate orders has dismissed appeals filed by Neelkamal Realtors against the Maharashtra Real Estate Regulatory Authority (MahaRERA) order granting interest on delayed possession.

The realtors had filed appeals against the MahaRERA orders in May and August 2018, October and November 2019, which held that the developer had failed to deliver possession by the agreed dates and granted interest on delayed possession.

According to the case, the developer had launched the DB Ozone project under the Rental Housing Scheme by the Mumbai Metropolitan Region Development Authority (MMRDA) having 25 buildings plus eight rehab buildings. Flats were booked by homebuyers Praveen Karkawat, Usha Shetty, Bhupendra Vira, Chandrakant Shetty, Richard D’Souza, Brian Aranha, Sandhya Agarwal and Ulanda John Fernandes for different considerations and with possession dates with grace periods of December 31, 2015 and December 31, 2016.

Advocate Sushant Chavan, appearing for the developer, contended that the MahaRERA orders were based on incorrect appreciation of facts and law and required interference from the tribunal. He argued that the authority had failed to consider the force majeure factors demonstrated by the promoter and wrongly observed that the promoter cannot make these factors as an excuse for delay in completion of the project.

Claiming that when the agreements for sale were signed, the project was 80% complete, Chavan argued that the promoter did not siphon off money to any other project but since 2012 it had suffered losses due to slowdown in the economy. He blamed demonetisation, GST, scarcity of sand, a stay order in October 2016 by the State Consumer Commission etc and said the authority failed to appreciate that his client had lost a period of 48 months due to various reasons beyond his control.

Appearing for homebuyers, advocates Anil D’souza, Shivani Shukla, chartered accountant Ramesh Prabhu and NiIesh Das contended that the promoter had failed to handover possession of the flats on revised date of completion, December 31, 2019, and had unilaterally extended the date to December 30, 2021.

They argued that the promoter continued to default in complying with obligations and has not offered any cogent and valid reasons for unreasonable and inordinate delay in completing the project.

After hearing both sides, the tribunal bench consisting judicial member Shriram Jagtap and administrative member SS Sandhu observed, “The above-mentioned facts clearly indicate that the promoter has miserably failed to adhere to his obligation to handover possession of subject flats to allottees on specified dates.”

The bench said Section 18 of RERA spells out that if promoter fails to complete or is unable to give possession of an apartment by the specified date in the agreement for sale, the homebuyer holds an unqualified right to seek refund of the amount with interest if intends to withdraw from the project, or seek interest on every month of delay in possession if he intends to continue in the project.

“Therefore, for the foregoing reasons, we have come to the conclusion that the learned authority has committed no wrong in granting interest to allottees,” the bench said in February 24 orders, dismissing the appeals. The bench also asked the realtor to provide ₹20,000 to each allottees.