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MahaREAT directs Aishwarya Light Construction to pay buyers for delayed possession
Dated on: Wednesday 22nd June 2022The Maharashtra Real Estate Appellate Authority (MahaREAT) directed a developer to pay a couple interest for delayed possession from January 1, 2018, until it is actually handed over, observing that a flat buyer cannot be forced to wait indefinitely for possession of the property.
The June 17 order was issued in response to Jervis and Rose Creado's appeal of the Maharashtra Real Estate Regulatory Authority's (MahaRERA) December 24, 2019, order, which directed the developer, Aishwarya Light Construction Company, to execute a registered agreement for sale but refused the couple interest or compensation under Section 18 of the Real Estate Regulation Act for delayed possession because there was no registered agreement showing any date of possession.
The couple paid Rs 80 lakh for a 466-square-foot flat with an open parking space in Aishwarya Heights in Majas, Andheri. The developer issued an allotment letter in February 2017 and executed an unregistered agreement for sale to hand over possession by December 2017. The Creados filed a complaint with MahaRERA after neither the agreement nor possession had been registered. The developer was not present prior to MahaREAT. Creados' lawyer, Godfrey Pimenta, argued that there is no word "registered" in Section 18 and that interest for delayed possession cannot be denied to allottees simply because there is no registered agreement for sale.
Members S S Sandhu and Shriram Jagtap stated that the record clearly shows that one of the four partners executed an unregistered agreement with the Creados, revealing December 2017 as the possession date and binding on the developer. "Aside from that, we believe that a person cannot be forced to wait indefinitely for possession of the flat allotted to him and is entitled to seek relief in the form of a refund of the amount paid by him or interest on the said amount due to delayed possession," they added. Despite the developer's failure to complete the project on time, the members noted that MahaRERA refused to grant interest on investment. "As a result, we believe that the allottees are entitled to interest on their investments beginning in January 2018," they concluded, directing interest at SBI's highest marginal cost lending rate plus 2% on the amount paid and Rs 10,000 towards litigation costs.
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