Mumbai: MahaRERA rejects builder’s bid to dismiss 17 buyer complaints in landmark Jogeshwari project dispute

The Jangid Annexe project is located at Jogeshwari East in Mumbai. PIC/ADVOCATE ANIL Dsouza

In a significant order that could have far-reaching implications for buyer protection under the Real Estate (Regulation and Development) Act (RERA), the Maharashtra Real Estate Regulatory Authority (MahaRERA) has rejected an attempt by Jangid Homes Pvt Ltd to dismiss 17 complaints filed by purchasers of units in the long-delayed Jangid Annexe project at Jogeshwari East.

The promoter had argued that the units in question were industrial units and therefore outside the jurisdiction of MahaRERA. However, MahaRERA Member-II Ravindra Deshpande ruled that the complaints are prima facie maintainable, observing that the builder had repeatedly represented the project and the units as commercial in nature before purchasers as well as before MahaRERA itself.

The order allows all 17 complaints to proceed for adjudication on merits, clearing a major hurdle for buyers who have been awaiting resolution in the abandoned project.

The dispute: commercial or industrial?

The controversy arose after 17 purchasers approached MahaRERA seeking relief under Section 18 of the RERA Act for delayed possession and other grievances.

In response, Jangid Homes challenged the maintainability of the complaints, arguing that the project consisted of industrial units approved exclusively for industrial use under municipal permissions.

The developer relied upon the Intimation of Disapproval (IOD) and Commencement Certificate issued by the Municipal Corporation of Greater Mumbai and cited earlier rulings where industrial projects were held to be outside the scope of RERA.

The builder maintained that MahaRERA lacked jurisdiction to entertain the complaints.

Buyers point to builder's own records

The complainants countered the builder's arguments by relying on documents executed by the promoter itself.

According to the buyers:

• The allotment letters did not describe the premises as industrial units.
• The Agreements for Sale contained no reference to industrial galas.
• Stamp duty and registration charges were paid at commercial property rates.
• The project was registered with MahaRERA as a commercial project.
• The promoter disclosed all 38 units as commercial units on the MahaRERA portal.
• The builder consistently marketed and represented the project as commercial.

The purchasers argued that the promoter could not now change its position after years of treating the project as commercial.

What convinced MahaRERA

After examining documents and submissions from both sides, MahaRERA noted several important factors.

The authority observed:

• The project was registered as a commercial project before MahaRERA.
• Registration extensions were also sought on the basis that the project was commercial.
• Project disclosures filed before MahaRERA classified the units as commercial.
• Agreements executed with purchasers did not identify the premises as industrial units.
• The builder's own representations before buyers and the regulator contradicted its present stand.

The authority observed that a promoter cannot disregard representations made before purchasers and MahaRERA while simultaneously seeking to challenge the authority's jurisdiction.

Builder's 'investor' defence fails at preliminary stage

Jangid Homes also argued that the transactions were essentially financial arrangements and that the complainants were investors rather than allottees.

However, MahaRERA noted that:

• Specific units had been allotted.
• Allotment letters had been issued.
• Consideration had been received from purchasers.

The authority held that determining the true nature of the transactions would require detailed examination of evidence and therefore could not be decided through a preliminary maintainability application.

Builder's side of the story

Jangid Homes argued that:

• The project was sanctioned exclusively as an industrial development.
• Municipal approvals classified the building as industrial.
• Industrial projects are outside the ambit of RERA.
• The project's registration as commercial occurred because, during the early years of RERA implementation, there was no separate category available for industrial projects.
• Purchasers were aware of the industrial nature of the project.
• The transactions were financial arrangements and not genuine allotments.
• Only a limited amount allegedly remained payable to the complainants.

Buyer's side of the story

The 17 complainants contended that:

• They purchased the units as commercial premises.
• No agreement described the units as industrial.
• The builder itself registered the project as commercial.
• All 38 units were disclosed to MahaRERA as commercial units.
• Commercial stamp duty and registration charges were paid.
• The promoter cannot change the project's character after accepting money and executing agreements.

‘Builder cannot change its position after selling units as commercial'

Advocate Anil Dsouza, Secretary of the MahaRERA Bar Association and counsel representing the 17 complainants, described the ruling as a major affirmation of buyer rights.

"This is a unique and rare case where the promoter attempted to deny MahaRERA's jurisdiction by suddenly claiming that the units were industrial in nature. However, the documentary record spoke for itself. In all 17 Agreements for Sale, the builder repeatedly described the premises as commercial units and nowhere referred to them as industrial units. More importantly, the promoter itself registered the project with MahaRERA as a commercial project and uploaded all 38 units on the MahaRERA portal as commercial units."

D'Souza said the ruling reinforces accountability in the real estate sector.

"The Authority has rightly held that a promoter cannot make one representation to purchasers and MahaRERA at the time of registration and sale, and then take a completely contradictory stand when faced with complaints from allottees. The order sends a strong message that developers will be held accountable for the representations they make to both regulators and consumers."

He added that the order ensures that the purchasers, who have been waiting for years, will finally have their grievances heard on merits.

Why this order matters

Legal observers, including Advocate Dsouza believe the ruling could have implications beyond the present dispute.

The decision underscores that:

• Promoters may be bound by representations made before regulators and purchasers.
• Project registration details uploaded before MahaRERA can become crucial evidence.
• Jurisdictional objections may not succeed where documentary records contradict the promoter's stand.
• Buyers in stalled projects cannot be denied a hearing merely through technical objections.

The ruling is likely to be closely watched by developers, lawyers and thousands of purchasers involved in ongoing MahaRERA proceedings.

At a Glance

Project: Jangid Annexe, Jogeshwari East

Complaints: 17 buyer complaints

Builder: Jangid Homes Pvt Ltd.

Core issue

Whether the units are industrial or commercial

MahaRERA's finding: Complaints are prima facie maintainable

Result: Builder's maintainability application rejected

Next step: All 17 complaints to proceed for adjudication on merits

Costs: No order as to costs