Infra Firm Takes Developer to MahaRERA Over Unregistered Sale Agreement

Mumbai: In a departure from the usual scenario of individual homebuyers dragging builders to court over delays, an infrastructure company, Capacit’e Infraprojects Limited, has moved the Maharashtra Real Estate Regulatory Authority (MahaRERA) seeking the registration and execution of a sale agreement based on a 2020 Memorandum of Understanding (MoU).

The infrastructure firm was assigned two flats in the Avenue 54 project in Santacruz West by the promoters – Sumer Radius Realty Private Limited, Sumer Buildcorp Private Limited, and Radius Estate Projects Private Limited. According to Capacit’e Infraprojects, the assignment of these flats was part of a settlement for outstanding construction dues, as detailed in their complaint to MahaRERA.

However, the promoters delayed and ultimately failed to execute and register the agreements for sale for the two flats, as required under the Real Estate (Regulation and Development) Act, 2016. Capacit’e Infraprojects noted that the full consideration for the flats had effectively been paid through the adjustment of outstanding dues. The promoters' failure to execute registered agreements constituted a violation of section 13(1) of the Real Estate (Regulation and Development) Act.

Section 13(1) of the Act prohibits promoters from accepting more than 10% of an apartment, plot, or building’s total cost as an advance payment or application fee without first executing and registering a written agreement for sale. The complainant stated that the project’s completion date had been revised without proper intimation, and no steps had been taken to formalize the transfer of the allotted units. Repeated requests and correspondence seeking compliance had been ignored by the respondents.

In its complaint, Capacit’e Infraprojects sought directions compelling the execution and registration of agreements for sale, the imposition of penalties on the promoters, and an injunction restraining the creation of third-party rights in respect of the two flats. After examining the record, MahaRERA member Ravindra Deshpande found that Capacit’e Infraprojects’ claims remained substantially unchallenged. The MoU and allotment letters demonstrated that the two flats had been earmarked for transfer in settlement of outstanding dues owed by the promoters, and the latter had received the full consideration for the properties.

However, no registered agreement for sale was executed, thereby constituting a violation of section 13(1) of the Act. The unregistered 2020 MoU could not serve as a substitute for a duly registered agreement for sale under the statutory framework. Since the project was stalled and the revised completion date had expired, directing the execution of agreements for sale alone would not adequately address the situation unless the project itself was revived.

On May 27, MahaRERA partly allowed the complaint and directed the respondents to remove the project from the abeyance list within 30 days, failing which they would be liable to penalties under section 61 of the RERA Act. Section 61 outlines penalties for promoters who violate provisions of the Act, including missing project completion deadlines. Upon revival of the project, the promoters must execute and register agreements for sale in respect of the two allotted flats, the order said. The promoters were ordered to pay ₹20,000 towards litigation costs incurred by Capacit’e Infraprojects, but all other reliefs sought by the latter were rejected.

MahaRERA also directed Capacit’e Infraprojects to pay an additional fee of ₹5,000 for having included two units in a single complaint.