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Monday, November 28, 2022

A Warrant Against Developer By MahaRERA For Incomplete Housing Project

The Action Serves As A Warning To The Developers Not Completing Their Housing Projects On Time

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Raju Vernekar
Raju Vernekar
Raju Vermekar is a senior Mumbai-based journalist who have worked with many daily newspapers. Raju contributes on versatile topics.

INDIA. Mumbai: The Maharashtra Real Estate Regulatory Authority (MahaRERA) has issued a warrant against the developer-M/s.Bhoomi Arkade Associates, directing the Collector of Palghar to recover the amount due to a flat buyer, who claimed a refund of the money paid by him to purchase the flats in the housing project “Acropolis II” at Virar West, near Mumbai, which was not completed in time.

The warrant issued to the developer serves as a warning to the defaulting developers not completing their housing projects on time and delaying possession of the flats to the purchasers.

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In a warrant dated August 23, issued under Section 40(1) of RERA, MahaRERA, Secretary Dr. Vasant Prabhu, directed the Palghar Collector to recover Rs. 21,75,727/ with 9 percent interest under the Land Revenue Recovery Act 1890 and Land Revenue Rules 1967. The interest on the accumulated amount has to be charged until the entire amount is refunded. Besides, a cost of 20,000/ has to be recovered as a cost of the complaint. 

The warrant has been issued in response to a complaint (No CC006000000057050) filed by Vijay Lal Menaria andPremlata Menaria about the flats they had booked in Project “Acropolis II” (No. P99000006132).

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The movable and immovable properties of the defaulting developer can be attached. The inventory of his unsold properties has to be taken as per the procedure laid down under Order 21, Rule 41 of the Code of Civil Procedure (CPC). Besides, the defaulter may be asked to disclose his property and produce a property card, failing which he can be sent to jail for 3 months. However, the other apartments which are still not booked and not mortgaged to any financial institutions/bank should not be attached. Also, the land on which the project is being implemented, apartments that are already booked to other allottees, and apartments that are mortgaged to financial institutions/banks, should not be attached so that the project could be completed, states the warrant.

The complainants (Vijay Lal Menaria andPremlata Menaria) had booked five flats (No 1101 to 1105) in the Acropolis II, located on plot No. 37-46 part 51-57 part 98-121 part 

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124, 145-147 part 368) at Chikaldongri in Virar West, announced by M/s Bhoomi Arkade Associates. Subsequently, the complainants cancelled the booking of flat No 1104. The money paid towards flat No.1104 was to be adjusted against the payment of flat No E 1105. All the complainants paid Rs21,75,727/-till June 2016 to the developer.

However, the developer did not execute the agreement for sale. The complainants contended that the developer orally agreed to hand over the possession of the flats by November 2017. But did not hand over the flats on the agreed date. Besides, although the developer had mentioned the area of the flat as 336.14 sq ft on the MalaRERA Website, in the allotment letter the area shown was 308. 58 sq. Ft. Since the project remained incomplete, the complainants cancelled their booking by sending a notice on May 24, 2018.

Initially, the developer contended that the amount of Rs. 21,04,500/- was received from the complainants. But the charges for cancellation of agreement stood at Rs. 56,120/- and the brokerage was Rs. 56,120/-. As such the refundable amount stood at Rs. 19,92,260/- This refund was offered to the complainants, but they refused to accept it. The developer also claimed that upon the termination or cancellation of the allotment, they would be entitled to retain cancellation charges a minimum of 2% of the total consideration value or such losses or damages suffered in the resale of the said premises to the newpurchaser (whichever is more). The balance shall be refunded only after the new purchaser was found for the surrendered flats, The developer maintained. 

Subsequently, the developer claimed that the MahRERA tribunal had granted time for obtaining occupancy certificate (OC) up to December 31, 2018, for the entire 15 wings of the housing complex, and the OC was obtained on January 14, 2019. There was no delay in completing the project. As such the complainants cannot be allowed to withdraw from the project. Besides, the complainant did not come forward to execute the agreement for sale by paying stamp duty and registration, the developer alleged.

After long deliberations, the final order dated December 02, 2020, followed by the order of non-compliance was issued by MahRERA after a video conference meeting held on July 16 this year.

In his order dated August 23, issuing the warrant, MahaRERA, Secretary Dr. Vasant Prabhu, stated that “ I find that the respondent developer has contravened section 13 (1) as well as section 12 of the RERA. The complainants are entitled to get a refund of their amount with interest at the prescribed rate. The prescribed rate of interest is 2% above SBI’s highest MCLR (Marginal cost of funds-based lending rate) which is currently 7% p.a. 

The complainants are also entitled to get Rs. 20,000/- towards the cost of the complaint. Therefore, the respondent shall refund Rs. 21,75,727/- with simple interest at the rate of 9% per annum, till the entire amount is refunded. Advocate Sulaiman Bhimani appeared for the complainant, while Shreeniwas Acharya represented the developer.

Reacting to the order, Advocate Sulaiman Bhimani said that any flat seeker should keep in mind the idiom “Let The Buyer Beware”. When contacted for reaction the Bhoomi Arkade Associates’ representative did not respond.


  • Raju Vernekar

    Raju Vermekar is a senior Mumbai-based journalist who have worked with many daily newspapers. Raju contributes on versatile topics.

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