Infra Firm Takes Real Estate Developer to MahaRERA Over Unregistered Sale Agreements

Mumbai: In a significant legal move, Capacit’e Infraprojects Limited, an infrastructure company turned homebuyer, has taken Sumer Radius Realty Private Limited, Sumer Buildcorp Private Limited, and Radius Estate Projects Private Limited to the Maharashtra Real Estate Regulatory Authority (MahaRERA). The company is seeking the registration and execution of sale agreements for two flats in the Avenue 54 project in Santacruz West, based on a 2020 Memorandum of Understanding (MoU).

The infrastructure firm was assigned two flats in the project by the promoters as a settlement for outstanding construction dues. The MoU was signed on January 24, 2020. However, the promoters failed to execute and register the sale agreements for the two flats, as required under the Real Estate (Regulation and Development) Act, 2016. Capacit’e Infraprojects argues that the full consideration for the flats had been effectively paid through the adjustment of outstanding dues, and the promoters’ failure to execute the agreements constitutes a violation of section 13(1) of the Act.

The company’s complaint to MahaRERA highlights several issues, including the revision of the project’s completion date without proper intimation, the lack of steps to formalize the transfer of the allotted units, and the repeated requests and correspondence seeking compliance that were ignored. The respondents did not appear before the regulatory authority or file any reply, leading to the matter proceeding ex-parte.

In its complaint, Capacit’e Infraprojects sought directions to compel the execution and registration of the sale agreements, impose penalties on the promoters, and issue an injunction to prevent the creation of third-party rights in respect of the two flats.

MahaRERA member Ravindra Deshpande, after examining the record, found that Capacit’e Infraprojects’ claims remained substantially unchallenged. The MoU and allotment letters clearly showed that the two flats were earmarked for transfer in settlement of outstanding dues owed by the promoters, and the promoters had received the full consideration for the properties. Despite this, no registered sale agreements were executed, 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, the authority observed. Given that the project was stalled and the revised completion date had expired, simply directing the execution of agreements for sale 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. If they fail to do so, they will 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 the revival of the project, the promoters must execute and register agreements for sale in respect of the two allotted flats. The promoters were also ordered to pay ₹20,000 towards litigation costs incurred by Capacit’e Infraprojects. However, all other reliefs sought by the latter were rejected.

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

This case underscores the importance of compliance with the Real Estate (Regulation and Development) Act, 2016, and the role of regulatory authorities in ensuring that developers adhere to the law, protecting the rights of homebuyers, whether they are individuals or companies.