MahaREAT: Rights Of Allottees Under Section 18 Is Unconditional & Absolute, Regardless Of Unforeseen Events Beyond Control Of Promoter

Section 18 stipulates the “rights and remedies available to homebuyers when a promoter fails to meet obligations”. It states, “ If the promoter fails to complete or is unable to provide possession of an apartment, plot, or building according to the terms specified in the agreement for sale, the allottee is entitled to receive interest from the promoter for each month of delay until possession is handed over, at a rate determined by the prescribed regulations.”

Background Facts

The appellant (Promotor), who was developing a residential project named “DB OZONE” in Mira Road, Thane District, entered into agreements for sale with the respondents (Allotees) in 2009. The agreement for sale stipulated possession by December 2014, with a grace period of 12 months.

However, the appellant failed to deliver possession within the agreed timeframe, citing factors beyond their control such as material shortages and regulatory delays. Consequently, the respondents filed complaints before MahaRERA, seeking possession and compensation for the prolonged delay.

Through its order dated 02.01.2020, MahaRERA held the appellant liable for the delay in the possession of the booked flat and ordered the appellant to pay interest for the delay.

The appellant filed an appeal before the Tribunal against the Authority's order dated 01.01.2020.

REAT Verdict

The Bench dismissed the application and held, that the rights of allottees under Section 18 to seek refund or claim interest for delay are unconditional and absolute, regardless of unforeseen events such as a slowdown in the economy, shortages of materials like sand, stone, and labor, as well as difficulties faced by the promoter due to the then prevailing Covid-19 pandemic, and other factors beyond the control of the promoter.

The Tribunal referred to the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors, wherein it was held that if the Promoter fails to give possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the Allottees right under the Act to seek refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal.

In conclusion, MahaREAT dismissed the Promotor's application and upheld the MahaRERA order dated 02.01.2020, holding the Promotor's obligation to pay interest for the delayed possession.

Case: Neelkamal Realtors Suburban Pvt. Ltd vs Mrs. Regina D'Costa

Citation: Appeal No. AT006000000052555 a/w. AT006000000052556

Counsel for Appellant: Mr. Sushant Chavan

Counsel for Respondent: None (Ex-Parte)

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