Status as on- 23/10/2020

MahaRERA ordered the builder Sanjeevani Vyapar LLP to refund Rs. 8 lakh with 9% interest and pay Rs. 20,000 towards cost of complaint to a buyer after the project failed to obtain Commencement Certificate(CC).

Introduction

A project called ‘Avante’ was outlined by Sanjeevani Vyapar LLP at Hariyali, Kanjurmarg in Central Mumbai suburbs. It required clearance from Ministry of Defense in order to receive CC from BMC which was not approved. The builder promised to provide alternative accommodation in a project in Airoli.

The booking of flat by the buyer was subject to a loan which was not granted due to denial of CC by the municipal authorities. Thus, Mr. Parulekar filed a complaint before MahaRERA for refund of money.

Issue before the Adjudicating Authority

The issue before the authority was to decide liability of the builder.

The builder pleaded not guilty on the ground that the completion date declared to RERA was June 30, 2022. He challenged the maintainability of complaint under section 18 of the RERA Act and pleaded that though asked in January, 2018, the buyer did not come forward to execute the sale agreement.

MahaRERA, in its order dated 12 October, 2020, contended that since the builder failed to obtain CC, the buyer’s deposit of money cannot be treated as earnest money thus immune to forfeiture. The builder should not have accepted the bookings prior to securing CC.

Further, it is clear that the authenticated copies of approvals and CC are to be uploaded at the time of registration of the project under the RERA Act. But, the builder launched the project without obtaining the CC. Thus, the builder is liable to refund the buyer.

Conclusion

The aforementioned decision is a momentous step taken by the adjudicating authority towards the protection of interest of homebuyers. Also, it reflects the malpractices by the builders by exploiting the loopholes of the Act which shall be neutralized through supplementary judgments and amendments. 

Disclaimer: The above article is based on the interpretation of the related laws and judicial pronouncements. The readers are expected to take legal advice before relying on this article. The author can be reached at support@centrik.in