Introduction
[1]The Hon’ble Member of the Maharashtra Real Estate Regulatory Authority (for short, “MahaRERA”), Shri. Mahesh Pathak, was hearing a complaint filed by a home buyer against the respondent for delay in handing over the possession of the flat agreed to be purchased by her in the project of the respondent.
Facts of the complaint
The complainant, vide an Agreement for Sale dated 26th June 2013, agreed to purchase a flat on the 43rd floor in A1 wing in the respondent’s project known as ‘Minerva’, situate at Lower Parel (for short, “said project”) for a total consideration of Rs.6,62,50,000/-(Rupees six crores sixty two lakhs and fifty thousand only) out of which she had paid an earnest amount of Rs.4,92,57,846/- (Rupees four crores ninety two lakhs fifty seven thousand eight hundred and forty six only). The respondent had failed to handover the possession of the flat on or before 31st December 2016, according to the timeline set out in the Agreement for Sale.
Aggrieved by the same, the complainant filed a complaint with the MahaRERA praying for directions for possession of the flat together with interest and compensation under the provisions of the Real Estate (Regulation and Development) Act, 2016 (for short, “RERA”). The complaint was heard on several occasions and a Roznama was recorded on 24th April, 2024 stating that it was submitted by the complainant that according to the Agreement for Sale, the possession of the flat agreed to be purchased by her was supposed to be handed over in December, 2016. However, as the Occupation Certificate (for short, “OC”) for the said project was received on 6th January 2023, the respondent intimated the complainant to take the possession of the flat against the payment of the balance amount due and payable by her as per the Agreement for Sale. But however, the complainant refused to take the possession relying on the ground that the respondent was not setting off the amounts due in respect of the interest because of the delay in possession.
The matter was adjourned to 9th July, 2024. Post the hearing it was reserved for orders after 23rd July, 2024 and in pursuance of the same, the respondent uploaded his written submissions on record. It was contended by the respondent that an intimation was sent to the complainant to take the possession along with the OC but the complainant denied to pay the balance consideration and take the possession of the flat. It was observed by the MahaRERA that the complainant had filed the complaint post the receipt of the OC and therefore the respondent disagreed and opposed the claim of the complainant for interest on delayed possession. The complainant in her submissions made a mention of a few judgments passed by the Hon’ble Supreme Court to support her contentions.
Issues in the complaint
The MahaRERA stated that in order to determine the violation of Section 18 of the RERA, it is vital to examine two aspects.
- Whether the promoter had failed to complete the said project or was unable to give possession of the flat in accordance with the terms and conditions embodied in the Agreement for Sale and
- by the timeline mentioned in the Agreement.
Observation of the MahaRERA
Upon examining the submissions made by both the parties, the MahaRERA noted that the complainant had filed a complaint under Section 31 of the RERA and had approached the MahaRERA praying for relief under the purview of Section 18 of the RERA towards possession of her flat coupled with interest on account of delay caused by the respondent in handing over the possession of the flat. The MahaRERA remarked that the complainant had prayed to set off the said interest amount payable by the respondent because of the delay in handing over the possession of the flat against the outstanding dues payable by her towards the flat, placing reliance upon the fact that the respondent had obtained the OC for the said project and had offered the complainant to take the possession of the flat after a delay of about 8 (eight) years.
The MahaRERA derived that the respondent had complied with its statutory obligation and had obtained the Part OC up to 51st floor, which covered the flat booked by the complainant and had also offered to take possession of the flat. It also clarified that by denying the possession offered by the respondent on 23rd January 2023, the complainant had contravened the provisions of Section 19(6) along with Section 19(10) of the RERA and therefore considering that since the possession was already offered to the complainant with the OC, the MahaRERA was not willing/keen to accept the relief prayed for by the complainant. It also noticed that the date on which the complainant had filed the complaint, the flat was complete with OC and the complaint was filed for interest on the delayed possession after the possession of the flat was offered to the complainant.
It communicated that the cause of action as stated under the ambit of Section 18 was not surviving on the date of filing of the complaint and hence the claim under Section 18 of the RERA for interest on compensation for delay was merely an afterthought.
It also opined that if the complainant was genuinely disappointed due to the delay in handing over the possession of the flat by the respondent, the complainant should have in fact, filed the complaint prior to the completion of the flat i.e. before the receipt of the OC, when the cause of action actually survived.
Order passed by the MahaRERA
The MahaRERA lastly concluded that there was no substance or value in the claim of possession along with interest for delay filed by the complainant under the provisions enumerated in RERA and therefore it rejected the claim. Accordingly, the MahaRERA dismissed the complaint for lack of merit.
Analysis of the order
The order passed by the MahaRERA in the present complaint projects the plight of the aggrieved home buyers/ flat purchasers approaching the regulatory authority for reliefs due to delay by the builders in handing over the possession of the flat agreed to be purchased by them. It holds that the home buyer’s recourse to Section 18 of the RERA cannot be entertained upon the receipt of the OC in respect of the premises agreed to be purchased.
It is undisputed that both the builders and the home buyers/ flat purchasers have to perform and comply with their obligations in terms of the Agreement for Sale entered into between them. The builders are liable and responsible to discharge their obligations as recorded in the Agreement for Sale including the handing over of the possession of the flat agreed to be purchased by the home buyers/ flat purchasers in accordance to the timeline stipulated in the Agreement for Sale and on the other hand, it is also the duty of the home buyers/ flat purchasers to make timely payments of the consideration in respect of the same.
In the above referred complaint, although there is a delay on the part of the builder in handing over the possession of the flat to the complainant, it cannot be denied that the complainant also has committed a breach by not making the balance payments and therefore on the grounds of equity, the complainant is not justified in filing a claim for the redressal of her grievance pertaining to the delay by the builder in handing over the possession.
While pronouncing the order, the MahaRERA observed that there are judgments passed by the Hon’ble Appellate Tribunal, wherein it has entertained the claim under Section 18 of the RERA raised by the allottees even after the OC has been obtained for the project accompanied with the fact that such judgments/orders were stayed by the Hon’ble Bombay High Court in the Second Appeals filed in the same.
Nirali Yash Desai authors the article, she is a real estate lawyer working with Damji Shamji Shah Group, Mumbai (in house legal department).
[1] Vandana Jain v/s Lokhandwala Kataria Constructions Pvt. Ltd. – Complaint No. CC006000000397229 before the Maharashtra Real Estate Regulatory Authority