The Maharashtra Real Estate Appellate Tribunal (MREAT) has set aside a May 2019 order by MahaRERA and directed Tata Housing Development Company to refund a home buyer from Tata Aveza project in Mulund his investment of Rs 59.73 lakh with interest from October 2015 after ruling that the developer had revised the date of possession from 2018 to 2022 and failed to deliver timely possession.
Home buyer Rahul Lahiri had challenged a MahaRERA order of May 20, 2019, which ruled that he was not entitled to a refund under Section 18 of Real Estate (Regulation and development) Act (RERA). He had booked flat A-1803 admeasuring 858 sq ft in Tata Aveza project in Mulund East by paying Rs 59.73 lakh out of total flat value of Rs 2.5 crore between July and October 2015.
The allotment letter issued in July 2015 did not mention a possession date, but he was verbally promised possession in 2018 and later in 2020, but when the developer revised the date to 2022, he filed the complaint seeking refund.
MahaRERA had observed in its ruling that Lahiri had accepted the new date of possession when it was extended from 2018 to 2020 in an email communication with the developer and hence his complaint was premature. It also ruled that the developer had committed no breach of contract as the possession date was to be specified in a registered agreement of sale and Lahiri did not cooperate in executing the agreement.
Advocate Tanuj Lodha of Lodha and Lodha Advocates, appearing for Lahiri, submitted that Tata Housing had orally committed to hand over possession in 2018 and later declared August 31, 2018 as the date when the project was registered with MahaRERA. He contended that the allotment letter dated July 11, 2015 showed that it was the responsibility of the developer to send agreement for sale within 15 days, but the developer had failed to send it and therefore his client can’t be accused of not cooperating in executing the agreement.
Lodha also argued that any stipulations in the booking form or the allotment letter cannot override Section 4 of the Maharashtra Ownership of Flats Act (MOFA), which mandates that the developer cannot accept more than 20 per cent amount until agreement is executed. Similarly, under Section 13 of RERA, the developer was obligated to execute an agreement by disclosing the date of possession before receiving more than 10 per cent amount of the total flat cost.
He pointed out that non-execution of an agreement despite accepting more than 20 per cent amount was a violation of both MOFA and RERA provisions and MahaRERA had ignored this aspect in its order. He also strongly contended that his client had never accepted 2020 as the revised date of possession and claimed that the developer had failed to share and execute the agreement for sale.
Advocate Gautam Ankhad along with advocates Varun Satiya and Snigdha Mankar of Crawford Bayley & Co, appearing for Tata Housing, contended that the booking form as well as the allotment letter emphasised that the date of possession was to be settled in the agreement for sale, but Lahiri never co-operated to sign the agreement despite five reminders in September 2017, January 2018, and March 2018 to pay stamp duty.
The advocates argued that since there is no agreement of sale executed between the two parties stipulating the date of possession, there is no violation of RERA provisions to invoke Section 18 of RERA. They cited cases where MahaRERA has taken this view in several past cases.
The developer’s advocates also argued that Tata Aveza project was being developed under a joint development agreement in 2010 with Richa Realtors, but the co-developer was never made a party in his complaint or appeal and therefore the appeal should be dismissed.
On this point, Advocate Lodha argued that as per the application form, Tata Housing was responsible for developing the project, and all payment cheques were issued to them and receipts were issued by them, and therefore, there was no need to implead Richa Realtors as a necessary party.
After hearing the arguments by both sides, the Tribunal members SS Sandhu and Sumant Kolhe held that the developer had originally declared August, 2018, as the possession date on MahaRERA portal and later revised it unilaterally to 2022. “Therefore, there is a clear delay in delivering possession. This delay entitles (the) allottee to seek refund of his amount with interest under Sections 8 and 18 of MOFA and RERA respectively.”
They also accepted Lodha’s contentions that the onus of executing the agreement lay on the developer, and disagreed with MahaRERA that the home buyer alone was to blame. They also rejected the arguments that if there is no agreement, reliefs cannot be granted under Section 18 of RERA. They also accepted Lodha’s contentions that there was no need to implead co-developer Richa Realtor in the appeal.