MahaREAT Ruling: Builder Liable to Pre-Deposit Amount Received from Homebuyer and Financer
The Maharashtra Real Estate Appellate Tribunal has held that the builder is liable to pre-deposit the amount received from the homebuyer, as well as the amount paid by the financer to the builder on behalf of the homebuyer.
ReraReal EstateMahareatHomebuyerBuilderPre DepositAppealTribunalReal Estate MaharashtraJul 29, 2024
The background of the case dates back to 09.06.2018, when the homebuyer filed a complaint before the Authority, seeking refund of the entire amount he paid to the builder, along with interest. After a series of orders and appeals, the Tribunal issued an order on 15.12.2020, remanding the case back to the Authority for reconsideration.
The Authority issued an order on 24.02.2022, directing the builder to refund the entire amount paid by the homebuyer, with interest. The builder filed an application to review the order, which was dismissed by MahaRERA on 20.07.2023. Feeling aggrieved, the builder filed an appeal before the Tribunal, seeking to quash and set aside the two orders issued by the Authority on 24.02.2022 and 20.07.2023.
The Tribunal held that the homebuyer is the main borrower for whom the subvention loan was approved to fund the flat. This loan amount was given to the builder on behalf of the homebuyer and in the homebuyer's name. Therefore, the homebuyer is primarily responsible for repaying the outstanding loan.
The Tribunal relied on Section 43(5) of the Real Estate (Regulation and Development) Act, 2016, which states that any person aggrieved by any direction or decision, or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter. The Tribunal also relied on the Supreme Court judgment in the case of New Tech Promoters and Developers Limited Vs. State of UP & Others, where it was held that the payment of pre-deposit requirement is mandatory for entertaining an appeal.
The Tribunal directed the builder to pre-deposit the entire amount received from both sources (the homebuyer and the financer) with the Tribunal as per Section 43(5) of RERA, 2016.
The case is a significant ruling in the real estate sector, highlighting the importance of compliance with the provisions of RERA, 2016.
Maharashtra Real Estate Appellate Tribunal (MahaREAT) is a quasi-judicial body established under the Real Estate (Regulation and Development) Act, 2016 to hear appeals against the decisions of the Authority and adjudicating officers under the Act.
Frequently Asked Questions
What is the main issue in this case?
The main issue in this case is the liability of the builder to pre-deposit the amount received from the homebuyer and the financer.
What is the significance of Section 43(5) of RERA, 2016 in this case?
Section 43(5) of RERA, 2016 provides that any person aggrieved by any direction or decision, or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter, subject to the payment of pre-deposit requirement.
What was the order of the Authority on 24.02.2022?
The Authority directed the builder to refund the entire amount paid by the homebuyer, with interest.
What was the outcome of the builder's application to review the order dated 24.02.2022?
The builder's application to review the order dated 24.02.2022 was dismissed by MahaRERA on 20.07.2023.
What is the implication of this ruling for the real estate sector?
This ruling highlights the importance of compliance with the provisions of RERA, 2016 and the need for builders to pre-deposit the amount received from homebuyers and financiers in order to entertain an appeal.
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