The Maharashtra Real Estate Appellate Tribunal (MREAT) recently overturned a MahaRERA decision, directing ITMC Developers to pay interest on INR 94 lakh paid by homebuyers for the Sai Sapphire project. Interest is set at 2% above SBI's highest MCLR from April 2019 until possession is handed over. The MREAT criticized MahaRERA's grace period for interest payments and clarified that the promoter could not claim Covid-related moratorium benefits, as possession was promised before the pandemic. The tribunal highlighted that an allottee's right to claim interest under Section 18 of RERA for delays in possession is absolute and cannot be undermined.
In a recent ruling, the Maharashtra Real Estate Appellate Tribunal (MREAT) reversed a MahaRERA decision and ordered ITMC Developers, the promoters of the Sai Sapphire project in Vikhroli, to pay interest on about INR 94 lakh, an amount paid by the homebuyers as part of the flat's purchase consideration.
Interest has been imposed at a rate of 2% above the SBI's highest MCLR, starting from April 2019 until the homebuyers receive actual possession along with the Occupation Certificate (OC). In setting aside the MahaRERA order issued by Vijay Satbir Singh in April 2022, the MREAT noted that the authority's ruling on the conditional payment of interest by the promoter was inconsistent with RERA provisions and the guidelines set by the Supreme Court.
The MREAT also noted that the MahaRERA order, which granted the promoter a six-month grace period for paying interest on the delay to the allottee, lacked any valid basis. Referring to the 2022 MahaRERA order that permitted the promoter to claim the benefit of the Covid-related moratorium, the MREAT judgment clarified that the promoter is not entitled to this benefit, as possession was promised by March 2019 under the agreement, which was prior to the onset of the Covid pandemic.
Madhuri and Mahesh Lohia, represented by advocate Mithil Sampat at the MREAT, had booked a flat in 2014, paying INR 75 lakh as part of the total amount, with the handover initially promised by December 2016. Although they had paid more than 20% of the flat's cost, the promoter failed to execute the sale agreement. It was only in February 2018, after RERA's intervention, that the agreement for a total consideration of INR 1,55,52,500 was finalised, following a complaint the allottees had filed with MahaRERA in 2017.
The promoter argued that the project's delay was due to factors beyond his control, citing that, as an SRA project, the rehabilitation component had to be completed first, which was delayed by slum residents refusing to vacate the land. However, the MREAT ruled that these reasons did not constitute force majeure. In reference to the grace period for interest payments allowed by MahaRERA in its 2022 order, the MREAT pointed out that the agreement contained no mention of such a grace period, and it was not brought up during the complaint proceedings either.
Citing the regulatory authority's instruction to prevent the project from being jeopardised by financial outflows, which indicated that the amount owed to the allottee could be paid after obtaining the Occupation Certificate (OC) or by June 30, 2023, the completion date according to the MahaRERA website, the MREAT stated that an allottee's right to claim interest under Section 18 of RERA for delays in possession is inviolable. This right is unconditional and cannot be cancelled by any circumstances, the MREAT noted.
The MREAT's ruling reinforces the importance of adhering to RERA guidelines, highlighting that homebuyers' rights cannot be compromised by conditional rulings or unjust delays. By holding ITMC Developers accountable for interest payments, the tribunal not only protects the financial interests of the Lohia couple but also sets an example that highlights the inviolability of homebuyers' rights in the real estate sector. This decision serves as a reminder to developers that compliance with legal obligations is paramount and that attempts to attribute delays to external factors will not excuse failure to fulfil contractual commitments.
Advertisement
Facebook
Whatsapp
