Order will protect interests of property buyers and act as a restraint to errant developers, say lawyers
The MHADA building in DN Nagar, Andheri West, in which seven shops were booked by the petitioner in the year 2009-2010
In a landmark order, the Appellate Tribunal of MahaRERA stated that a developer cannot change sanctioned plans. The verdict was recently passed in favour of a litigant upholding the order of MahaRERA. The petitioner, Shekar Prasad, 57, a resident of Chembur, worked as a chief engineer (mechanical) with the merchant navy and wanted to start a marine institute. Hence, he had booked seven shops from a developer in the MHADA redevelopment project in DN Nagar, Andheri West, in 2009 and the beginning of 2010. Unfortunately, even after paying half of the entire consideration of over Rs 1.14 crore, to date, the developer has not started the work on the portion where the shops were allotted. The MHADA building stands just as it was in 2010 even today.
The dispute
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“On January 24, 2013, Prasad, entered into a registered agreement for sale for the said seven commercial spaces/shops bearing on the ground floor of the project Moongipa Arcade, being built by M/s Moongipa Realty Pvt. Ltd (formerly known as Axayraj Buildwell Pvt. Ltd) in the D.N. Nagar Area, Andheri West for running a Maritime Training Institute. The date for possession was on or before March 31, 2014. The project was to be an MHADA Redevelopment and the lessor of the land is a society D.N. Nagar Shree Ashtavinayak Society. However, Moongipa failed to hand over the possession of the seven shops to Prasad, as promised, even though half of the entire consideration towards the flat cost was paid by the petitioner," said Advocate Nilesh Gala, who represented Prasad before MahaRERA.
Advocate Nilesh Gala, secretary of RERA Practitioners Welfare Association
Case before MahaRERA
The MahaRERA passed an order on January 28, 2021, restraining Moongipa from changing the sanctioned layout plans and specification of the said project, without following the procedure laid down under Section 14 of the RERA Act. Further, the MahaRERA directed the Moongipa to pay 9 per cent per annum interest on the amount of consideration paid from April 1, 2014, till handing over of possession. Moongipa later filed an appeal before the Maharashtra Real Estate Appellate Tribunal, citing multiple excuses for delay in the project, like refusal of aviation authorities for height clearance and non-cooperation by society for redevelopment.
Developer challenges order
The developer challenged the MahaRERA order, before the Appellate Tribunal, where Advocate Manish Gala, represented Prasad. During the course of arguments, the Tribunal observed that Moongipa amended the 2008 sanctioned plans of the said project from time to time to utilise the Floor Space Index (FSI).
Shekar Prasad, Petitioner
Despite having approvals to construct in 2008, Moongipa failed to construct the project in a time-bound manner. Further, the Tribunal observed that Moongipa has already constructed the ground-plus-two commercial floors, two podium car parks and stilt plus nine floors of residential flats in October 2013 itself. Therefore, Prasad’s shop, being on the ground floor, does not get adversely affected by the refusal of height clearance, said Advocate Gala.
Appellate Tribunal verdict
“The Appellate Tribunal by its order dated March 23, 2022, confirmed the MahaRERA’s order dated January 28, 2021, granting Prasad interest for delayed possession of the seven shops from April 1, 2014, up till handover of possession. Further, Appellate Tribunal upheld the provision of section 14 of the RERA Act, restraining Moongipa from changing the structural layout, floor plans, dimensions and/or plans of commercial spaces bearing Nos. G-37 to G-43, without following the procedure laid down under section 14 of the RERA Act,” said Advocate Gala.
Landmark judgment
Advocate Nilesh Gala, who is also secretary of RERA Practitioners Welfare Association, said, “To date, multiple developers have unilaterally amended plans of the whole project to take advantage of additional FSI without the consent of the purchasers, and shortchanging purchasers by handing over smaller units, or units compromised due to structural amendments carried out by the developers. This judgement of the Appellate Tribunal will restore the faith of flat purchasers in the MahaRERA and Appellate Tribunal across Maharashtra.”
Petitioner speaks
“I had plans to cherish my dream of setting up a marine institute in Andheri as many shipping companies have their offices in and around the vicinity, and also getting students for the institute would have been easier,” said Prasad. He added, “I had paid Rs 1.14 crores initially and the balance payment was to be done at the time of possession in 2014. While I cleared my bank loan, working on merchant vessels, I never got to see my shops being constructed to date.”
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