MahaREAT - For Appeal, Builder Liable To Pre-Deposit Amount Received From Homebuyer & Amount Paid By Financer

Background Facts

On 09.06.2018, the homebuyer (Respondent No 1) filed a complaint before the Authority, seeking refund of the entire amount he paid to the builder (Appellant), along with interest. On 07.02.2019, the Authority's Adjudicating Officer directed the builder to repay ₹1,90,28,275 to the homebuyer, along with interest and compensation of ₹2 lakhs.

The builder, dissatisfied with this decision, filed an appeal before the Tribunal. After hearing both parties, the Tribunal issued an order on 15.12.2020, and remanded the case back to the Authority for reconsideration.

Further, on 24.02.2022, the Authority issued an order, directing the builder to refund the entire amount paid by the homebuyer, with interest. The builder then filed an application to review the 24.02.2022 order, which was dismissed by MahaRERA on 20.07.2023.

Feeling aggrieved, the builder filed appeal before the Tribunal, seeking to quash and set aside the two orders issued by Authority on 24.02.2022 and 20.07.2023.

Tribunal Order

The Tribunal held that the homebuyer is the main borrower for whom the subvention loan was approved to fund the flat. This loan amount was given to the builder on behalf of the homebuyer and in the homebuyer's name. Therefore, the homebuyer is primarily responsible for repaying the outstanding loan.

MahaREAT placed reference to the Section 43(5) The Real Estate (Regulation and Development) Act, 2016 which is read as follows:

43. Establishment of Real Estate Appellate Tribunal.

(5) Any person aggrieved by any direction or decision, or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter:

Provided that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained, without the promoter first having deposited with the Appellate Tribunal atleast thirty per cent. of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him, if any, or with both, as the case may be, before the said appeal is heard.

Further, MahaREAT relied on the Supreme Court judgment in the case of New Tech Promoters and Developers Limited Vs. State of UP & Others, where it was held that the payment of pre-deposit requirement is mandatory for entertaining an appeal.

The Tribunal also held that the Authority's order dated 24.02.2022, which directed the refund of the total amount received from the homebuyer, meant the refund of the entire amount received from both sources (the homebuyer and the financer).

Therefore, the Tribunal directed the builder to pre-deposit the entire amount received from both sources with the Tribunal as per Section 43(5) of RERA, 2016.

Case – M86 Residency Private Limited Versus Mr. Ketan Kataria & anr

Citation - APPEAL NO. AT006000000174630 OF 2023