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MahaRERA has instructed Lokhandwala-Kataria Construction, the promoter of the Minerva project in Lower Parel, to compensate a homebuyer for delayed possession of two flats. The interest, calculated from January 2022 until possession with an Occupation Certificate (OC), will be at SBI's Marginal Cost Lending Rate (MCLR) plus 26 basis points. Additionally, the promoter must release the mortgage on the flats before handing over possession. The complaint highlighted discrepancies in project disclosures and significant delays beyond the promised possession date of December 2020. MahaRERA dismissed the promoter's allegations of fraudulent agreements as baseless and upheld the validity of the agreements for sale, delivering a significant verdict in favour of the homebuyer.
MahaRERA has recently ordered Lokhandwala-Kataria Construction, the promoter of the Minerva project in Lower Parel, to pay interest to a homebuyer for delayed possession of two flats. The compensation will be calculated from January 2022 at the State Bank of India's Marginal Cost Lending Rate (MCLR) plus 26 basis points until possession is offered with an Occupation Certificate (OC). The promoter has also been instructed to release the mortgage on the flats before possession is handed over. Advertisement
This case traces back to February 2019, when Faisal Rashid signed agreements to purchase two flats in the Minerva project, paying INR 1 lakh for each flat. The agreements stipulated possession by December 2020. However, the promoter failed to deliver the flats on time. Subsequently, Rashid discovered that the flats were under mortgage, despite being falsely declared as "unsold units" in the project's disclosure statement.
The promoter argued that Rashid's claims stemmed from a loan transaction rather than a valid sale and alleged that the agreements were executed fraudulently, violating an escrow arrangement involving Rashid's father and one of the company's directors. They also accused Rashid of misusing a power of attorney. However, MahaRERA noted that the promoter failed to present any credible evidence to support these claims.
It is pertinent to note that the Minerva project, launched more than a decade ago, has been marred by significant delays. Once envisioned as a premium skyscraper offering ultra-luxury residences, the project faced hurdles, including funding challenges and regulatory scrutiny. MahaRERA observed that while the sale agreements were signed in 2019, the promoter only challenged their validity in 2024, coinciding with the hearing of Rashid's complaints. This delayed response was deemed an afterthought.
MahaRERA further pointed out that the mortgage deed for the flats was executed after the agreements for sale, violating RERA provisions. The authority upheld the agreements as valid and binding, confirming Rashid's status as an allottee. It rejected the promoter's attempts to challenge the agreements under the guise of escrow arrangements and ruled that the promoter must comply with the terms of the agreements for sale.
This ruling highlights the regulatory role of RERA in ensuring accountability and protecting homebuyers' rights in an often complex and opaque real estate market. MahaRERA's decision not only reinforces the validity of legally executed agreements but also underscores the obligation of promoters to honour their commitments. The Minerva project, a high-profile yet troubled development, stands as a stark reminder of the challenges in completing luxury real estate projects in Mumbai. This judgment sets a precedent for similar cases, where delays and discrepancies could lead to significant financial and reputational repercussions for developers.
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