Mumbai Real Estate Tribunal Overturns MahaRERA Order on Flat Non-Delivery

Mumbai: The Mumbai Real Estate Appellate Tribunal (MREAT) recently set aside a 2020 order from the Maharashtra Real Estate Regulatory Authority (MahaRERA), which had denied relief to a buyer for the non-delivery of a flat by a developer. The tribunal ruled that the absence of a registered agreement for sale is not a valid reason to deny relief.

The MREAT directed the developer to refund the amount paid by the Andheri-based allottee, along with interest. The allottee, Stanley Saldanha, represented by advocate Anil D' Souza, had booked a flat in an IndiaBulls project at Panvel in August 2013 and had paid a sum of over Rs 26 lakh. Due to the slow pace of construction and delay in the handover of possession of the flat, Saldanha sought to withdraw from the project in 2019.

However, the developer sought to deduct cancellation charges and forfeit a part of the paid amount when Saldanha demanded an exit. The MREAT ruled that the MahaRERA order by chairman Gautam Chatterjee had erred in holding that the provisions of Section 18 of the Real Estate (Regulation and Development) Act (RERA) would not apply in the absence of a registered agreement for sale. In this case, a detailed booking application form existed, running to about 26 pages, which reflected the agreed positions of the parties, akin to an agreement for sale.

The MREAT emphasized that the agreement need not be in writing and that any other document containing the requisite contents of the agreement would suffice. The tribunal also noted that the intentions of the parties matter more than the nomenclature of the transaction instruments. The MREAT had previously held that even a Memorandum of Understanding (MOU) could be considered a valid instrument for the purposes of Section 18 of the Act.

The MREAT further stated that linking possession delivery dates with occupation dates in this case is legally unsustainable. The tribunal pointed out that the promoter had violated Section 11 (3) of the Act by failing to write and intimate a specific possession date and the stage-wise project construction status at the time of booking. The MREAT also highlighted that there is no express provision in the Act that allows a promoter to forfeit earnest amounts or any other amount in the event of booking cancellation by either party.

This ruling is significant as it clarifies the legal stance on the requirements for agreements and the rights of buyers in the real estate sector. It provides a clearer framework for both developers and buyers, ensuring that the interests of buyers are protected even in the absence of a formal, registered agreement.