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‘Date of possession in agreement is sacrosanct’

Updated on: 22 December,2022 07:54 AM IST  |  Mumbai
Vinod Kumar Menon |

MahaRERA Appellate Tribunal also holds that pleas can be altered amid ongoing litigation in landmark order

‘Date of possession in agreement is sacrosanct’

F-Residences at Haveli in Pune where the two complainants had booked two flats back in 2015

A day before her retirement, the chairperson of the MahaRERA Appellate Tribunal, Justice  (retd) Indira Jain, passed a landmark order, setting aside a MahaRERA Authority order.

The tribunal ruled that the date of possession as per the registered agreement is absolute and sacrosanct. Also importantly, in this case, the flat purchasers had changed their plea mid-way, which went against them at the MahaRERA Authority level. But the tribunal ruled that the flat buyers could do so by following the legal procedure. Advocates appearing in the case said that this order may set a remarkable precedent.

Facts of the case

Naresh and Sarang Joshi, a father-son duo, who reside at Mahakali Caves Road, Andheri East, had made two separate agreements of sale on March 31, 2015, for booking two flats, 703 and 803, in B1 Building at F-Residences— a project by developers Nahar Homes LLP—at Haveli in Pune for Rs 82.51 lakh and Rs 89.90 lakh.

A loan was taken from a private financial institution under a 10:80:10 subvention scheme after the parties and the financier executed a tripartite agreement, wherein the promoter (developer) agreed to pay pre-EMI interest till possession, said advocate Anil D’souza, who represented the complainants with advocate Kunal Maskar.

Also Read: MahaRERA rules consider continuity of MOFA: Experts

The dispute

Aggrieved by the alleged delay in delivery of possession and absence of  the occupation certificate (OC) and the promoter's alleged non-payment of the pre-EMI, the complainants approached MahaRERA on October 31, 2018, seeking that the promoter be directed to adhere to the terms of the tripartite agreement, pay all pending dues to the financial institution and hand over legal possession of the flats along with parking and OC as well as compensate them for the delay in possession delivery, claimed D’souza.

MahaRERA order

Upon hearing the parties, the Adjudicating Officer of MahaRERA, in two separate orders dated April 3, 2019, allowed the complainants to withdraw from the project and directed the promoter to refund the paid amounts at 10.75 per cent interest from October 15, 2018, together with costs, subject to certain conditions stipulated in the said orders, which were rectified by MahaRERA vide two separate orders dated May 3, 2019, to include a refund of relevant taxes paid therein.

First appeal filed

Aggrieved by MahaRERA's orders, the complainants made two separate appeals before the MahaRERA Appellate Tribunal. These appeals were disposed of by the tribunal via two separate orders dated February 15, 2020.

Matter before MahaRERA again

As per the directives of the tribunal, MahaRERA heard the matter afresh, and the complainants submitted that the promoter was facing criminal charges on account of non-payment of interest, as well as other dues, and expressed a desire to withdraw from the projects, besides seeking a refund of paid amounts.

Other side's argument

The promoters, however, submitted that there was no deliberate delay, construction had been completed on time, as per the sanctioned plan, and the OC had been denied for no fault of the promoter, so delay could not be attributed to the promoter, as it had been paying pre-EMIs.

MahaRERA's fresh order

Upon hearing the parties, the chairperson MahaRERA passed two separate iorders on May 2021 and disposed of complaints by concluding, “In view of above, if complainants intend to continue in the same project, as per the prayers made in their original complaints, the respondent is directed to hand over possession of the apartment at the earliest. In the event complainants intend to withdraw from the said project, then such withdrawal shall be guided by the terms and conditions of the agreement as executed between the parties.”

Aggrieved by the MahaRERA order, the complainant moved the tribunal once again, which passed the recent order, setting aside the one passed by MahaRERA.

Advocate speak

According to D’souza, “There are many key highlights in this benchmark order and we can see this particular order serving as a precedent. The tribunal clearly stated that the date of possession, as per the registered agreement, is held as absolute and sacrosanct and this date is not extendable even if grace period is present in the agreement. Even if the builder cites court cases and multifarious litigation as an excuse for the delay in handing over possession, this excuse was also over-ruled by the tribunal.”

“The tribunal held that a flat purchaser is well within his rights to change his plea during a complaint if he has taken the right steps in applying for the change. The fact that the builder defaulted on the date of possession was held as rock solid grounds for a refund, the tribunal ruled. Clearly a landmark order from the tribunal chairperson, who has reinstated the common man’s faith in the judiciary and the hallowed bench,” said D’souza.

The year complainants booked flats at F-Residences
Other observations made by the tribunal* 

1.  Builder stopped paying pre-EMI, despite promising to do so till the date of possession, and this led to a chain of ill-fortuned events.

2. Due to the builder’s defaults, the financing company cashed the flat purchaser’s cheques, which were kept as a security deposit.

3. Then the company filed a cheque bounce case against the flat purchaser in a court in Chandigarh.

4. Things took a nasty turn, when the financing company took symbolic possession of the said two flats, in December 2019, despite the matter being sub-judice under the tribunal.

* As told by advocate Anil D’souza

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