ARTICLE
17 August 2021

Whether Complaints Against Unregistered Projects Are Maintainable Under RERA?

DV
Dhaval Vussonji & Associates

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With the advent of Real Estate (Regulation and Development) Act, 2016 ("Act") there is now a central piece of legislation governing the rights and obligations of all participants in the real estate industry.
India Real Estate and Construction
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With the advent of Real Estate (Regulation and Development) Act, 2016 ("Act") there is now a central piece of legislation governing the rights and obligations of all participants in the real estate industry. However various real estate regulatory authorities have encountered an overwhelming majority of complaints regarding real estate projects which were already in existence when the Act was brought into force. Such pre-existing projects brought with them various rights and liabilities created under contract, as well as the local laws, and therefore it became important to understand the interplay of rights and obligations set forth under the Act. There were various complaints filed by allottees in respect of projects which were not registered under the Act, and this issue came up before the Maharashtra Real Estate Regulatory Authority ("MahaRERA") in the case of M/s Rukmini Beverage Private Limited versus M/s Shreeniwas Cotton Mills Limited and Others. 1

Facts of the Case

1. According to the complainant, Rukmini Beverage Private Limited ("Complainant") the Respondent No.1 i.e. Shreeniwas Cotton Mills, (the 'Respondent Promoter') a sister concern of the Respondent No. 2 i.e. M/s. Lodha Developers Pvt. Ltd. had advertised its project "World One" as proposed to be one of the tallest tower of 117 floors. Accordingly, the Complainant booked a flat bearing no.3701 admeasuring 1946 square feet (carpet area) on the 37th floor ("Flat") along with two car parks for a total consideration amount of Rs. 10,76,36,688/-.

2. As per the registered agreement executed between the parties, the Respondent Promoter had agreed to handover possession of the Flat to the Complainant on or before 30th November 2016.

3. The Complainant had already paid an amount of Rs. 11,81,45,061/- to the Respondent Promoter.

4. After the commencement of the Act, the Respondent Promoter had registered this project bearing no. P5190008345 from 43rd to 80th floor with MahaRERA.

Grievance / Arguments of the Complainant

1. The Respondent Promoter without obtaining the consent of the Complainant reduced the height of the building and modified the plan which is illegal and contrary to the provisions of Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963 ("MOFA") and the Act.

2. The Respondent Promoter failed to fulfill its commitment of handover of the flat on or before 30th November 2016 and hence the Complainant was entitled to seek refund along with interest under the provisions of Section 18 of the Act.

3. On the date of commencement of the Act, the Respondent Promoter had not obtained occupancy certificate for the phase in which the Complainant had booked the Flat. It had only obtained part occupancy certificate on 29th July 2017 and hence it ought to have registered the said phase with MahaRERA.

4. The Respondent Promoter had violated the provisions of the Act and hence the rights of the Complainant under the Act cannot go away on account of non-registration of the said phase in which the Complainant had booked his Flat. Therefore, the Complainant is an allottee as defined under Section 2(d) of the Act.

5. Thus, the Complainant sought reliefs from MahaRERA directing the Respondent Promoter to (i) register phase I of the project with MahaRERA and (ii) refund the entire amount paid by the Complainant along with interest at the rate of 10.85 % from the date of payment till actual realization and (iii) pay compensation of Rs. 10,00,000/- for mental agony suffered by the Complainant.

Arguments of the Respondents

1. The Complainant had filed the complaint after taking possession of its flat on 18th December 2019 which was offered in the month of November 2018.

2. The Occupancy Certificate for the flat of the Complainant was obtained on 29th July 2017 i.e within 3 months after commencement of the Act and hence it had not registered the said phase with MahaRERA.

3. Since the Complainant's flat is located in the part of the project not registered, the provisions of RERA do not apply and MahaRERA has no jurisdiction to try and entertain the complaint.

Main Issue

The principal question which therefore arose before the MahaRERA was whether the MahaRERA has the jurisdiction to hear cases pertaining to unregistered projects?

Decision

After considering the rival submissions made by both the Parties, the MahaRERA came to the following conclusion:

1. Provisions of the Act apply to all projects that are required to be registered. The Act does not apply to projects which do not require registration or the phase of the project which has already been completed and hence does not require registration.

2. The Complainant is an allottee in the phase of the project which does not require registration.

3. MahaRERA cannot decide the complaint which is concerning a completed and unregistered phase of the project.

4. The complaint was held to be not maintainable and therefore the prayers of the Complainant were rejected.

Footnote

1. Offline Complaint dated 01.02.2021 filed by the complainant as per order dated 20.01.2021 of Hon'ble High Court at Bombay passed in W.P. No. 72 of 2021.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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