MREAT Orders ITMC Developers to Pay Interest for Delayed Possession to Homebuyers
The Maharashtra Real Estate Appellate Tribunal (MREAT) has overruled a MahaRERA decision, compelling ITMC Developers to pay interest on the delayed possession of flats in the Sai Sapphire project, Vikhroli. The interest is calculated at 2% above the SBI's
MreatItmc DevelopersMahareraSai Sapphire ProjectReal Estate RegulationReal EstateOct 27, 2024
The MREAT's decision came after the Lohia family, represented by advocate Mithil Sampat, filed a complaint. The homebuyers, Madhuri and Mahesh Lohia, had booked a flat in 2014, paying INR 75 lakh as part of the total consideration of INR 1,55,52,500. The initial possession date was promised for December 2016. However, despite paying over 20% of the flat's cost, the promoter failed to execute the sale agreement. It was only after RERA's intervention in 2018 that the agreement was finalized.
The MREAT noted that the MahaRERA order, issued by Vijay Satbir Singh in April 2022, allowing a six-month grace period for interest payments, lacked a valid basis. The tribunal also clarified that ITMC Developers are not entitled to claim the benefit of the Covid-related moratorium, as the possession was promised by March 2019, well before the pandemic began.
ITMC Developers argued that the project delays were due to factors beyond their control, such as the need to complete the rehabilitation component of the Slum Rehabilitation Authority (SRA) project, which was delayed by slum residents refusing to vacate the land. However, the MREAT ruled that these reasons did not constitute force majeure.
The MREAT emphasized that the allottees' right to claim interest under Section 18 of the Real Estate (Regulation and Development) Act (RERA) for delays in possession is inviolable and unconditional. The tribunal pointed out that the agreement did not mention any grace period for interest payments, and this was not discussed during the complaint proceedings.
The MREAT's ruling reinforces the importance of adhering to RERA guidelines and highlights 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 in the real estate sector. This decision serves as a reminder to developers that compliance with legal obligations is crucial and that attributing delays to external factors will not excuse failure to fulfill contractual commitments.
MahaRERA, established under the RERA, plays a crucial role in regulating the real estate sector in Maharashtra. It ensures that developers adhere to timelines and uphold the rights of homebuyers. The MREAD, on the other hand, provides an appellate mechanism for aggrieved parties, ensuring that justice is served in real estate disputes.
Frequently Asked Questions
What is the recent ruling by the MREAT regarding ITMC Developers?
The MREAT has ordered ITMC Developers to pay interest on the delayed possession of flats in the Sai Sapphire project at a rate of 2% above the SBI's highest MCLR, starting from April 2019.
Why did the MREAT reject the MahaRERA's decision to grant a six-month grace period?
The MREAT found that the MahaRERA's decision lacked a valid basis and was inconsistent with RERA provisions and Supreme Court guidelines.
What was the initial possession date promised by ITMC Developers to the Lohia family?
The initial possession date promised by ITMC Developers to the Lohia family was December 2016.
Why did ITMC Developers claim they were not entitled to the Covid-related moratorium?
ITMC Developers were not entitled to the Covid-related moratorium because the possession was promised by March 2019, which was before the pandemic began.
What is the role of MahaRERA in the real estate sector?
MahaRERA, established under the RERA, regulates the real estate sector in Maharashtra, ensuring that developers adhere to timelines and uphold the rights of homebuyers.
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