MahaREAT Criticizes MahaRERA's Casual Approach, Directs Spenta Builders to Pay Interest from Default Date Until Possession Handed Over

While directing M/s. Spenta Builders Pvt. Ltd , the builder to pay interest from the due date of possession until the date possession was handed over to the homebuyer, Maharashtra Real Estate Appellate Tribunal (Tribunal) bench, comprising Shriram R. Jagtap (Judicial Member) and Shrikant M. Deshpande (Technical Member), criticized the casual and non-serious approach of the Maharashtra Real Estate Regulatory Authority (Authority) in deciding the default date from which the builder would be liable to pay delay interest to the homebuyer. The Authority had relied on a similar complaint filed by other homebuyers of the same project, where it had directed the builder to pay interest from 01.07.2017. Background Facts The homebuyer purchased a flat in the builder's project named "Palazzio" situated on Andheri Road, Mumbai. The total consideration for the flat was Rs. 97,22,000/-, out of which the homebuyer paid Rs. 87,49,800/- to the builder. As per the agreement for sale, the builder was supposed to hand over possession of the flat on or before 31.12.2015. However, the builder handed over possession to the homebuyer after a delay of approximately 4.5 years, on 31.07.2020. Feeling aggrieved, the homebuyer filed a complaint before the authority seeking interest on the delayed possession and compensation under Section 18(1) of RERA, 2016. On 13.11.2019, the Authority directed the builder to pay interest to the homebuyer from 01.07.2017 until the actual date of possession. Aggrieved by the Authority's order, the homebuyer filed an application seeking to rectify the Authority's Order dated 13.11.2019. The homebuyer argued that since the flat has not yet received an Occupation Certificate, interest should be calculated until possession is handed over, not just until 28.02.2019. Additionally, the homebuyer claimed that interest for delayed possession should be calculated from 31.12.2015, the agreed date of possession, rather than 01.07.2017. The Authority agreed to remove the reference to the Occupation Certificate dated 28.02.2019 but did not accept the homebuyer's request for interest from 31.12.2015. Therefore, both the homebuyer and the builder, feeling aggrieved by the Authority's decision, filed appeals before the tribunal. Observation and Direction by Tribunal Regarding the builder's contention that delays occurred due to force majeure events like changes in the sanctioned plan, delays in obtaining environmental clearances, and NOCs, the Tribunal found that these delays did not qualify as "force majeure" under Section 6 of RERA, which covers natural calamities like war, floods, or earthquakes. The Tribunal concluded that the builder could not justify the delay based on these grounds, and the homebuyer should not bear the consequences of the builder's failure to act professionally. Therefore, the Tribunal rejected the builder's argument and did not consider these delays as valid reasons for extending the possession date. The Tribunal observed that even if the force majeure factors presented by the builder were given some consideration, the builder is not entitled to benefit from them. This is because the delays are not attributable to the homebuyer, and the builder did not claim that the homebuyer caused any delay in possession. Therefore, the builder's argument that they are entitled to an extension due to delays beyond their control under Clause 12 of the agreement is not valid. The Tribunal noted that in its Order dated 13.11.2019, which was later rectified on 03.09.2020, the Authority had considered similar complaints from other flat owners in the same project. In those cases, the Builder was directed to pay interest from 01.07.2017 until the actual date of possession. However, the Tribunal found that the facts in those cases differed, particularly regarding the possession dates in their respective agreements. The Tribunal observed that the Authority failed to properly apply its mind to the specific facts of the homebuyer's complaint. In this case, the due date for possession was 31.12.2015, so the default should be considered from 01.01.2016. The Authority's decision to start interest from 01.07.2017 had no proper basis and reflected a casual, non-serious approach that was contrary to the provisions of RERA. Therefore, the Tribunal allowed the appeal filed by the homebuyer, dismissed the builder's appeal, and directed the builder to pay interest to the homebuyer from 01.01.2016 until the date of possession. Case – M/s. Spenta Builders Pvt. Ltd. Versus Mr. Ashlesh Gosain A/W anr Citation - Appeal Nos.AT006000000052402-52942Click Here To Read/Download Order

MahaREAT Criticizes MahaRERA's Casual Approach, Directs Spenta Builders to Pay Interest from Default Date Until Possession Handed Over

Aryan Raj

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