MahaRERA Orders Mumbai Builder to Refund ₹1.40 Crore to Homebuyers for RERA Violations

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued a significant ruling against the promoters of the Kalpataru Yashodhan project in Andheri West. The authority has ordered the developers to refund over ₹1.40 crore, along with interest, to Hina and Sanjay Choksi, a homebuyer couple. The decision comes after the developers were found guilty of arbitrary forfeiture and violations of the Real Estate (Regulation and Development) Act (RERA).

The refund is to be made with interest calculated at the State Bank of India’s highest Marginal Cost of Lending Rate (MCLR) plus 2%. Hina and Sanjay Choksi had initially booked a flat priced at over ₹7.12 crore in 2017 and paid approximately ₹1.46 crore, which was nearly 20% of the total price. The promoters had assured possession by December 2018. However, possession was never handed over.

Despite failing to meet the promised possession deadline, the promoter continued to issue demand letters from 2017 onwards. In February 2020, the developer forfeited the entire amount paid by the buyers and subsequently sold the same flat to a third party. The homebuyers were represented by advocate Dharmendra Damani.

MahaRERA rejected the promoter’s claim that the complainants were merely “investors” and not allottees. The authority held that any person to whom an apartment is allotted for consideration qualifies as an “allottee” under RERA, regardless of whether a registered agreement for sale has been executed. The authority noted that there was no evidence to support allegations of speculative intent or commercial resale by the complainants.

The regulator further observed that accepting more than 20% of the total consideration without executing an agreement for sale amounts to a statutory violation under Section 13 of RERA. The promoter, the authority stated, cannot take advantage of its own breach by arguing that the absence of an agreement defeats the buyers’ claim.

In its order, MahaRERA member Ravindra Deshpande termed the forfeiture of the entire amount as arbitrary, disproportionate, and illegal, particularly when the promoter itself was in breach of the law. The authority noted that the buyers were required to pay the remaining amount only after the issuance of the occupation certificate, yet the promoter issued premature and unlawful demand letters.

The regulator also held that forfeiture exceeding 10% of the consideration, especially when the promoter is at fault, is unconscionable and violative of RERA. Once the flat was sold to a third party, the promoter could not legally retain the complainants’ money while also benefiting from the resale. MahaRERA termed this conduct as unjust enrichment.

This ruling is a significant victory for homebuyers and sets a precedent for the real estate industry in Maharashtra, emphasizing the importance of adherence to RERA regulations and the protection of homebuyers' rights.