The Maharashtra Real Estate Tribunal (MREAT) has revised a previous order by MahaRERA, granting home buyers the right to receive interest on their payments and refunds of additional fees. MREAT directed a developer to compensate home buyers by refunding the statutorily mandated payments and paying interest from the date of deposit. The tribunal rejected the relief granted to the promoter regarding the Covid moratorium period, emphasizing that interest serves as compensatory remuneration for buyers enduring possession delays. MREAT's judgment referenced Supreme Court rulings and relevant legal provisions, affirming the purpose of interest as fair compensation for the utilization of funds.
The Maharashtra Real Estate Tribunal (MREAT) has revised a 2021 order issued by MahaRERA, which denied home buyers not only the interest on their payments but also the refund of additional fees like stamp duties and registration fees. MREAT has assertively directed an esteemed Andheri-based developer to remunerate interest on the deposited sum by the discerning home buyers, commencing from the very day of deposit, alongside refunding the statutorily mandated payments.
In addition, MREAT has rejected the relief granted by MahaRERA to the promoter concerning the Covid moratorium period while calculating the liability for interest. Advocate Nilesh Gala represented the home buyers who had booked a flat in Krishna Residences, Andheri (East), in 2015 for a total consideration of Rs 2.66 crore, with the promised handover in 2017. Despite making a cumulative payment of around Rs 70 lakh, inclusive of taxes and statutory payments, the promoter failed to meet the agreed timeline for possession.
While MahaRERA, in its authoritative decree, explicitly directed the venerable promoter, Krishna Developers, to promptly restore the entire sum, coupled with an interest, from the date of default in 2017, the judicious MREAT, in its judgement, stated that it would be fair to refund the amount paid along with interest to the home buyers from the date of receipts.
MREAT, in its wise judgement, referenced Supreme Court rulings and Section 2 (za) of the Real Estate (Regulation and Development) Act, along with a Bombay High Court order. These authoritative sources affirm that the payment of interest is not a penalty but rather serves as compensatory remuneration for the diligent homebuyer who has endured the delay in receiving possession of their apartment despite fulfilling their financial obligations. The interest, in essence, provides fair compensation for the utilization of funds.
The MREAT, recognizing the intrinsic purpose of interest as rightful recompense for the utilization of funds, firmly asserts that it serves as mere compensation for the use of money. Furthermore, MREAT denied the promoter's ability to claim the advantages of the moratorium permitted by MahaRERA. This determination is based on the observation that the two circulars issued in 2020 extended the validity dates of project registration during the challenging circumstances of the Covid-19 pandemic without altering the originally agreed-upon possession date.
The Maharashtra Real Estate Appellate Tribunal (REAT) was established under Section 43 of the Real Estate Regulation Act, 2016. It has the authority to review and determine the legality of orders issued by the RERA and can uphold or overturn them. Appeals against REAT's orders can be made in the High Court. The main objectives of RERA Maharashtra include promoting transparency in property sales, safeguarding the interests of real estate buyers, and facilitating the swift resolution of real estate disputes. The Appellate Tribunal is empowered to regulate its own procedures and those of its benches, including determining the locations of their sittings.
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