Mumbai: MahaRERA flat buyers want to withdraw investments; chief says no

Updated: Jan 15, 2019, 15:04 IST | Vinod Kumar Menon

Regulatory body passes order asking unhappy flat buyers in Dadar development to not withdraw in bulk as it could jeopardise project for 520 others

The complainants booked flats in the project in 2012-13. 
The complainants booked flats in the project in 2012-13. PIC FOR REPRESENTATION/Bombay Realty

In an unusual order, the MahaRERA chief on January 9 set aside the plea of 13 flat buyers who want to withdraw their investments from Bombay Realty's Island City Centre project in Dadar, stating that a bulk withdrawal like this would jeopardise the completion of the project and impact 520 other flat buyers. The buyers are now contemplating approaching the tribunal. For the complainants, who booked flats in the project around 2012-13, several changes to the plan and reduced amenities proved to be the nail in the coffin.

Speaking about the issues, one of the complainants said, "The issue with this ground-plus-65 storey tower, which is almost ready, is different from other flat buyers' contentions. In this case, the plan given to us was changed thrice. All the promises made at the time of booking the flat were not kept. For instance, we were promised a 300 sq ft balcony attached to our flat, and today, when the structure is ready, the balcony has been completely eliminated, and only a small window has been provided for ventilation. The shapes of the rooms are not the way they were assured either."

The flat buyers allege that the developer of Island City Centre has changed the layout, floor building plans and reduced the promised amenities. PIC FOR REPRESENTATION/Bombay Realty
The flat buyers allege that the developer of Island City Centre has changed the layout, floor building plans and reduced the promised amenities. PIC FOR REPRESENTATION/Bombay Realty

Unwanted changes
Dejected with these broken promises, the buyers approached MahaRERA, where further disappointment awaited them. "MahaRERA stated in its order that if we decide to still go ahead and withdraw from the project, the terms and condition stated in the letter of allotment [before the project was registered with MahaRERA] will be applicable, under which the developer/builder can forfeit a certain percentage of the payment we have already made. However, MahaRERA is not willing to consider the layout and design plans presented by the developer/builder to the flat purchasers before they registered the project with MahaRERA. This is nothing but favouring the developer by depriving the flat buyers," said the complainant.

They added, "We had filed individual cases. But without giving us a fair chance to be heard, MahaRERA clubbed all the complaints into one and passed a single order, depriving us our right to come out of the project. We have decided to challenge the MahaRERA order in the tribunal."

Gautam Chatterjee, MahaRERA chief, stated in the order
Gautam Chatterjee, MahaRERA chief, stated in the order

According to advocate Ramesh Prabhu, who represented six of the 13 flat buyers, each of the flats cost anywhere between Rs 7.5 crore to Rs 10 crore. He said, "MahaRERA chairman [Gautam Chatterjee] is of the view that instead of withdrawing from any project, people should stay on it and ensure that it gets completed. Even in this case, the order is very clearly asking flat buyers to stick to the project and allow the completion of the construction. However, the flat buyers are aggrieved. Hence, they approached MahaRERA seeking justice, but this order is unfortunate, and has not given any justice to the flat buyers."

Prabhu added, "Section 12 of RERA clearly states that if there are any discrepancies in the sample flat shown at the time of booking the flat and the final output, the flat buyer can withdraw from such a project. However, the MahaRERA chief's order completely contradicts section 12, as he is interested in getting the project completed, which the complainants are not keen on continuing with."

"Also, in his order, MahaRERA chief directs complainants to adhere to terms and conditions cited in the letter of allotment, but ignores other assurances stated in the same letter. He refuses to accept all the plans submitted by the developer/builder prior to registering his project on the MahaRERA site, which in itself is a contradictory statement," pointed out Prabhu.

The counsel for the respondent in the case, Bombay Dyeing and Manufacturing Company Limited, submitted that the development work of the registered project is at an advanced stage and they are committed to completing the project in accordance with the sanctioned plans and approval disclosed at the time of registering with MahaRERA, and as per the revised timeline given at the time of registration.

MahaRERA says
Stating its reasons, MahaRERA said in its order [mid-day has a copy], "Keeping in mind the larger interest of approximately 520 allottees of the project, allowing bulk withdrawal to so many complainants at this stage would mean jeopardising the completion of the project. Money for the refund will have to be taken out from a separate account, which is meant specifically for the completion of the project. This would eventually slow down the progress of the project work, especially when the project is nearing completion. Therefore, the provisions of Section 12 of the Act cannot be retrospectively applied to transactions that transpired before the Act came into force. Further, the complainants have failed to show that they have sustained any loss and damage by reason of an alleged incorrect, false statement made by the respondent and therefore, section 12 of the said Act is not applicable in the present case."

Commenting on the issue, advocate Vinod Sampat said, "I am of the opinion that MahaRERA is trying to save the developers by ensuring that the completion of the project is more vital than injustice being caused to a few individual flat purchasers. No steps have been taken by MahaRERA to penalise the developer. It implies that a wrongful act done by the developer/builder prior to registering with MahaRERA registration can be overlooked, which will financially hurt flat buyers. In my view, that flat buyers must always approach consumer court, as one can get 24 per cent interest, which is not the case with MahaRERA."

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