MREAL Orders ITMC Developers to Pay Interest for Delayed Possession to Homebuyers
The Maharashtra Real Estate Appellate Tribunal (MREAL) has overturned a MahaRERA decision, directing ITMC Developers to pay interest on the delayed possession of a flat in the Sai Sapphire project in Vikhroli. The interest rate is set at 2% above the SBI'
MrealMahareraItmc DevelopersSai SapphireReraReal Estate MaharashtraOct 27, 2024
The MREAL, in setting aside the MahaRERA order issued by Vijay Satbir Singh in April 2022, noted that the authority's ruling on the conditional payment of interest by the promoter was inconsistent with the Real Estate (Regulation and Development) Act (RERA) provisions and the guidelines set by the Supreme Court. The MREAL also criticized the MahaRERA order, which granted the promoter a six-month grace period for paying interest on the delay to the allottee, stating that it lacked any valid basis.
Referring to the 2022 MahaRERA order that permitted the promoter to claim the benefit of the Covid-related moratorium, the MREAL clarified that the promoter is not entitled to this benefit. The possession of the flat was initially promised by March 2019, which was before the onset of the Covid pandemic.
Madhuri and Mahesh Lohia, represented by advocate Mithil Sampat at the MREAL, had booked a flat in 2014, paying INR 75 lakh as part of the total amount, with the handover initially promised by December 2016. Despite paying more than 20% of the flat's cost, the promoter failed to execute the sale agreement. It was only in February 2018, after RERA's intervention, that the agreement for a total consideration of INR 1,55,52,500 was finalized, following a complaint filed by the allottees with MahaRERA in 2017.
The promoter argued that the project's delay was due to factors beyond his control, such as the necessity to complete the rehabilitation component first, which was delayed by slum residents refusing to vacate the land. However, the MREAL ruled that these reasons did not constitute force majeure. The MREAL also pointed out that the agreement contained no mention of a grace period for interest payments, and this was not brought up during the complaint proceedings either.
The MREAL noted that an allottee's right to claim interest under Section 18 of RERA for delays in possession is inviolable. This right is unconditional and cannot be cancelled by any circumstances. The MREAL's ruling reinforces the importance of adhering to RERA guidelines, highlighting that homebuyers' rights cannot be compromised by conditional rulings or unjust delays. By holding ITMC Developers accountable for interest payments, the tribunal not only protects the financial interests of the Lohia couple but also sets a precedent that emphasizes the inviolability of homebuyers' rights in the real estate sector. This decision serves as a reminder to developers that compliance with legal obligations is paramount and that attempts to attribute delays to external factors will not excuse failure to fulfill contractual commitments.
Frequently Asked Questions
What is the Maharashtra Real Estate Appellate Tribunal (MREAL)?
The Maharashtra Real Estate Appellate Tribunal (MREAL) is a judicial body in Maharashtra, India, that hears appeals against decisions made by the Maharashtra Real Estate Regulatory Authority (MahaRERA) and other regulatory bodies in the real estate sector.
What is RERA?
RERA stands for the Real Estate (Regulation and Development) Act, 2016. It is a law in India designed to protect homebuyers and regulate the real estate sector by ensuring transparency, accountability, and timely project completion.
Why did MREAL order ITMC Developers to pay interest?
MREAL ordered ITMC Developers to pay interest for the delayed possession of flats in the Sai Sapphire project, as the developer failed to meet the promised possession date and did not have valid reasons for the delay.
What is the rate of interest ordered by MREAL?
The MREAL ordered ITMC Developers to pay interest at a rate of 2% above the State Bank of India's (SBI) highest Marginal Cost of Funds based Lending Rate (MCLR).
What is the significance of this MREAL ruling?
This ruling is significant as it reinforces the importance of adhering to RERA guidelines and highlights the inviolability of homebuyers' rights. It sets a precedent that developers must be held accountable for delays and must comply with legal obligations.
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