Maharashtra RERA Tribunal Upholds Homebuyers' Rights, Slams Builder for Misleading Possession Dates
In a landmark decision that could have far-reaching implications for homebuyers in Maharashtra, the Maharashtra Real Estate Appellate Tribunal (MahaRERA) has ruled that developers cannot avoid liability by using ambiguous phrases like 'endeavour to hand over possession' in sale agreements. The tribunal has ordered a Mumbai-based builder to pay full delay compensation to flat purchasers in the 'Auris Serenity Tower-2' project at Malad, developed by Transcon-Sheth Creators Pvt. Ltd.
The case involved three homebuyers who had purchased a flat in the project in 2016 for Rs 3.70 crore, with nearly Rs 3.48 crore already paid. The sale agreement stated that the promoter would 'endeavour' to complete the flat by July 2018, with an additional 12-month period extending possession up to July 2019. However, the project only received its occupation certificate in December 2021, leading the buyers to seek relief under the Maharashtra Real Estate Regulatory Authority (MahaRERA).
During the hearing, the buyers' counsel, Advocate Pankaj Jain, argued that the builder had intentionally drafted the agreement in a confusing manner by mentioning two possession dates. The first date was used to attract purchasers, while the second was intended to avoid paying compensation. They contended that once possession was not delivered even by the extended date, the builder could not seek shelter under a grace period clause.
The developer's counsel, Anosh Sequeira, countered that the binding possession date was actually July 2019, not July 2018. The company also cited various reasons for the delay, including the Maharashtra sand mining restrictions, the Covid-19 pandemic, labor shortages, and force majeure events. Additionally, they claimed that the buyers themselves had delayed certain payments.
The Tribunal, however, rejected these arguments and strongly criticized the wording used in the agreement. It observed that such clauses were designed to create a false sense of early delivery for purchasers while giving the promoter room to escape responsibility later. The tribunal described this practice as an 'unfair trade practice' and noted that such wording 'appears primarily meant to lure prospective buyers.'
The Tribunal ruled that the actual possession date must be treated as July 31, 2018, and not the later date claimed by the promoter. It also held that the builder could not claim the benefit of the Covid moratorium because the default had already taken place well before the pandemic began.
The Tribunal directed the promoter to pay interest on Rs 3.47 crore at the rate of State Bank of India's highest MCLR plus 2 percent from August 1, 2018, until February 7, 2022, the date on which possession was finally offered with the occupation certificate. The payment has to be made within 30 days.
In a further blow to the developer, the Tribunal held that a promoter cannot continue charging penal interest on delayed instalments from homebuyers after the promised possession date has expired. Such a practice, the tribunal noted, would effectively reward the builder for its own delay.
Despite attempts by Pune Mirror to contact the developer for a response, they failed to provide one. This ruling is expected to set a precedent and strengthen the rights of homebuyers in Maharashtra, ensuring that developers are held accountable for their promises and obligations.
