MahaRERA Tribunal Upholds Homebuyers' Rights, Orders Full Compensation for Delay
In a stern ruling that could strengthen the rights of delayed homebuyers across Maharashtra, the Maharashtra Real Estate Appellate Tribunal has held that a developer cannot avoid liability by using vague phrases like 'endeavour to hand over possession' in a sale agreement. The Tribunal has ordered the builder to pay full delay compensation to flat purchasers.
The Tribunal bench of Justice S.S. Shinde and Member Shrikant M. Deshpande ruled in favour of three purchasers who had booked a flat in the 'Auris Serenity Tower-2' project at Malad, developed by Transcon-Sheth Creators Pvt. Ltd. The homebuyers had purchased the apartment in 2016 for Rs 3.70 crore, of which nearly Rs 3.48 crore had already been paid. Under the agreement, the promoter stated it would 'endeavour' to complete the flat by July 2018, while also inserting a further 12-month period extending possession up to July 2019. However, the project received its occupation certificate only in December 2021, prompting the buyers to seek relief under the Maharashtra Real Estate Regulatory Authority.
During the hearing, the buyers' counsel, Adv Pankaj Jain, argued that the builder had intentionally drafted the agreement in a confusing manner by mentioning two possession dates, first to attract purchasers and later to avoid paying compensation. They submitted 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, on the other hand, argued that the binding possession date was actually July 2019, not July 2018. The company also blamed the delay on the Maharashtra sand mining restrictions, the Covid-19 pandemic, labour shortages, and force majeure events. It further claimed the buyers themselves had delayed certain payments.
The Tribunal rejected those arguments and strongly criticised the wording used in the agreement. It observed that such clauses appeared designed to create a false sense of early delivery for purchasers while giving the promoter room to escape responsibility later. Calling the practice an 'unfair trade practice,' the Tribunal observed 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 per cent 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, noting that such a practice would effectively reward the builder for its own delay.
Pune Mirror tried to approach the developer but failed to get a response.
