MahaREAT - Homebuyers Have Unconditional Right To Claim Interest, Sets Aside MahaRERA Conditional Payment Of Interest Order

While setting aside the order of Maharashtra Real Estate Regulatory Authority (Authority), Maharashtra Real Estate Appellate Tribunal (Tribunal), comprising Justice Shriram R. Jagtap (Judicial Member) and Shrikant M. Deshpande (Technical Member), has held that Homebuyers right to seek interest upon delay under Section 18(1) of RERA, 2016 is unqualified and conditional. The homebuyer appealed to the Tribunal after the Authority allowed the builder to pay interest after obtaining the occupation certificate for the project. Authority's order was based on the rationale that the financial condition of the project should not be jeopardized. Background Facts Through allotment letter dated 02.09.2014, Homebuyer (Appellant) booked a flat in builder's (Respondent) project named "Sapphire-I". At the time of booking, the builder promised possession by December 31, 2016. When the builder failed to hand over the flat by the promised date, the homebuyer filed Complaint before the authority. Authority in its order dated 06.12.2017 directed parties to execute and register an agreement for sale as per the provisions of RERA before December 31, 2017. Following some follow-up by the homebuyer, the agreement for sale was executed and registered on February 28, 2018, for a total consideration of Rs. 1,55,52,500. The possession date per the agreement was March 31, 2019. The homebuyer paid Rs. 1,09,58,110. However, the builder failed to hand over possession of the flat by the stipulated date in the agreement for sale dated February 28, 2018. Aggrieved by this failure the homebuyer again filed a complaint before the Authority seeking compensation for the delay in handing over possession and requested that the amount paid to the builder be returned with compound interest, as stipulated in the builder's demand letters. The Authority through its order dated 08.04.2022 directed the builder to pay interest on the delayed possession. Further, considering the mitigating circumstances and to ensure the project's finances were not jeopardized authority allowed the builder to pay the due amount after obtaining the Occupation Certificate for the project or by June 30, 2023, whichever comes earlier. Therefore, being aggrieved by the authority order dated 08.04.2022 homebuyer filed appeal before the Tribunal seeking to set it aside. Observation and Direction by Tribunal The Tribunal observed that, according to Clause 16 of the agreement for sale the date of possession was specified as on or before 31.03.2019, along with the occupation certificate. However, the builder failed to hand over possession of the flat to the homebuyer by the promised date in the agreement. Therefore, Tribunal held that the homebuyer is entitled to relief in the form of interest under Section 18 of RERA, 2016. The Tribunal noted that, in the Order dated 08.04.2022, the Authority directed the builder to pay interest for the delay in handing over possession of the flat, allowing a grace period of 6 months. The Tribunal found this grace period baseless since Clause 16 of the agreement does not mention it and concluded that the Authority's decision was incorrect. The Tribunal held that the homebuyer has an indefeasible right to claim interest under Section 18 of RERA, which cannot be subject to conditions. Thus, Tribunal set aside the Authority order dated 08.04.2022. Case – Mahesh Kumar Lohia & anr Versus ITMC Developers Pvt. Ltd Citation – Appeal No. ATO0600000093934/22 Date of order – 11.10.2024 Click Here To Read/Download The Order

MahaREAT - Homebuyers Have Unconditional Right To Claim Interest, Sets Aside MahaRERA Conditional Payment Of Interest Order

Aryan Raj

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