The Real Estate Appellate Tribunal (MREAT) has reversed a MahaRERA order, requiring the promoter of a Jogeshwari (East) project to refund INR 13.5 lakh plus 2% interest to allottees who booked a flat in 2019. The developer had previously forfeited the booking amount after the allottees requested cancellation due to loan difficulties. MREAT found that the promoter violated Section 13 of the RERA Act 2016 by accepting more than 10% of the flat's cost without a written agreement. The tribunal highlighted that there was no evidence of loss from the cancellation, reinforcing the need for justifiable reasons for forfeiture.
The Real Estate Appellate Tribunal (MREAT) has overturned a MahaRERA order, instructing the promoter of a Jogeshwari (East) project to refund INR 13.5 lakh, along with interest at a rate of 2%, to the allottees who had booked a flat in 2019. The developer had forfeited the booking amount after the allottees expressed their inability to complete the payment due to difficulties in securing a loan and requested the cancellation of their allotment. Previously, MahaRERA had directed the developer of Avant Heritage to cancel the booking and refund the amount, but without interest, while also mandating the registration of a sale agreement.
MREAT found that the promoter had violated Section 13 of the RERA Act 2016, noting that there is no explicit provision in the Act allowing the promoter to forfeit the earnest amount in cases where the allottee or promoter cancels the booking.
MREAT noted that Section 13 of the RERA Act 2016 imposes an obligation on the promoter to refrain from accepting more than 10% of the flat's total cost from the allottee without first entering into a written agreement for sale. The tribunal observed that the promoter had received over 10% of the total consideration but failed to execute the registered agreement for sale. Additionally, the promoter demanded a further payment of INR 6.5 lakh from the allottees.
The allottees, represented by advocate Anil D'Souza, had jointly booked a flat in the project for a total price of INR 1.15 crore and paid INR 13.5 lakh to the promoter. In May 2019, the promoter issued an allotment letter, but when the allottees sought a home loan, the bank rejected their request due to the absence of one of the two allottees' signatures on the allotment letter. Although the flat was booked jointly, the allotment letter was issued solely in the name of one allottee. Consequently, the allottees were unable to proceed with the transaction and notified the promoter of their inability to continue, requesting a refund.
The tribunal noted that the Act does not specify permissible deductions when either the allottee or the promoter cancels the booking for any reason. MREAT further stated that there should be reasonable grounds for forfeiting the amount deposited by the allottees. There is no evidence to suggest that the promoter suffered any damages or loss due to the allottees' cancellation of the booking. Allowing the promoter to forfeit the earnest money without valid justification would undermine the very purpose of the statute, MREAT asserted. Additionally, sub-section 3 of Section 18 of the RERA Act 2016 entitles allottees to seek compensation from the promoter for failing to meet any obligations imposed by the Act or its associated rules and regulations, MREAT emphasised.
This ruling emphasises the need for transparency and fairness in real estate transactions. By reinforcing the provisions of the RERA Act, MREAT aims to protect the rights of homebuyers and ensure that developers adhere to established regulations, ultimately fostering trust in the property market.
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