Upholding a Maharashtra Real Estate Appellate Tribunal order, the Bombay High Court directed a developer to deposit 60 per cent of a refund amount set by the tribunal, before the tribunal hears the appeal.
Justice Bharati Dangre in an order last week refused to interfere with a MREAT order dated December 13, 2019, directing Sahyog Homes to first deposit 60 per cent of Rs 82 lakh refund to be given to a homebuyer.
Section 43 (5) of Real Estate (Regulation and Development) Act states that a promoter may approach the appellate tribunal but it shall not entertain the appeal unless the promoter deposits a minimum of 30 per cent of the penalty or higher percentage as determined by the tribunal.
An aggrieved Sahyog Homes moved the high court against the MREAT order. When the court indicated that it would not like to interfere with the order, the counsel for the developer submitted that they will deposit 60 per cent of the amount within six weeks from the order. The court then disposed of the appeal.
This is not the first time that a developer has tested this RERA provision before the high court. In February 2019, ITMC Developers Pvt Ltd, the promoter of Sapphire 1 project in Kurla, had also moved court after the tribunal asked the developer to deposit 50 per cent of the refund amount imposed by MahaRERA. The high court had confirmed the tribunal decision and rejected the appeal.
Advocate Tanuj Lodha who represented homebuyer Krishna Agarwal in this case, said, “It’s important that section 43(5) of RERA is adhered to since it safeguards the interest of the allottees.” In September 2019, MahaRERA had held that even an unregistered Memorandum of Understanding (MoU) was evidence enough that the homebuyer had booked a flat and directed Sahyog Homes to refund Agarwal Rs 82.95 lakh with 10.75 per cent interest from 2012.
Agarwal had booked flat no 2202 in Verona Tower S2 in Oshiwara in 2012 and paid Rs 82.95 lakh out of the flat cost of Rs 89.41 lakh based on a MoU. The developer promised possession in the 35-storey tower by 2016, but in 2017 it unilaterally revised the possession date to July 31, 2022, the complaint said.
During the hearings, the developer claimed that the Agarwals were not homebuyers but investors and that the MoU was not registered and hence a void document. The company attributed the delay in construction to noncooperation by slum dwellers in the SRA component.
MahaRERA member Madhav Kulkarni observed that the appellate tribunal had held that even in the absence of a registered agreement, such complaints were maintainable. Stating that the developer should not have accepted such huge amounts when the project was not progressing as per schedule, Kulkarni held that the developer had failed to deliver possession of the flat as per agreement and directed it to refund the entire amount with interest. This order was challenged by the developer before the tribunal.