MahaRERA Landmark Order: Homebuyers Gain Development Rights in Unfinished Clan City Project
In a landmark order, the Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed the revocation of the registration of the 16-year-old unfinished Clan City project in Rohinjan near Taloja. Additionally, MahaRERA has given the homebuyers association and housing society the permission to develop the remainder of the project themselves.
The order pertains to 154 connected complaints filed by allottees against Supreme Construction and Developers Pvt Ltd and related parties. The township was registered in nine separate phases under different MahaRERA project registration numbers and consists of nine buildings, each 34 storeys high. The complainants sought various reliefs, including possession of flats with interest and compensation, refunds, revocation of project registration, and permission to hand the project over to another developer under Sections 7 and 8 of RERA.
Many of the homebuyers booked flats from 2010 onwards, according to Kanchan Sharma, one of the heads of the Association of Allottees. The ground work only began in 2013, with a deadline set for 2017, which was not met. In 2017, the developer asked for additional funds, and the deadline was revised to March 2024, which also lapsed.
MahaRERA member Mahesh Pathak noted that the builder did not file any deadline extension application and that there was ongoing landowner litigation with an ad interim injunction granted by the Bombay High Court in April 2022, affecting construction. During the initial hearing phase, MahaRERA set up a special conciliation panel, which submitted its final report on January 5, stating that conciliation had failed. The panel highlighted serious concerns regarding the promoter's persistent non-compliance with MahaRERA orders, alleged diversion of project funds, lack of a viable completion plan, unviable escalation demands, and lack of transparency regarding future phases and available Floor Space Index (FSI).
MahaRERA also observed that the project’s promoter secured sanctions from MMRDA as a ‘Rental Housing Scheme’ in 2010. The panel noted that completing the project would require substantial funding and that the sale of unsold inventory is currently restrained by the ad interim injunction of the Bombay High Court. Therefore, it recommended that the authorized Association of Allottees be permitted to approach the High Court for appropriate reliefs, including court-monitored sale of unsold units, escrow mechanisms, protection of landowners’ rights, pursuit of additional FSI or statutory benefits, and engagement with MMRDA for resolving the Rental Housing Component.
In its order, MahaRERA declared the project as “stressed” and restrained the developer from any fresh sale, marketing, advertisement, or creation of third-party rights.
“We are still consulting lawyers,” said Sharma on future plans. “It’s too early to decide whether we will go in for self-development or through a developer.”
The legal significance of this order is that the state government can be requested to relax and modify construction norms in the interest of flat purchasers, explained Parth Chande, who appeared on behalf of the homebuyers association. “A project that has not been completed for over 15 years has been given the necessary directions and guidelines for completion,” he said. This order sets a precedent for the possible revocation of a project’s registration and handing it over to another developer, offering a ray of hope to long-suffering homebuyers.
