Will Homebuyer Who Converted His Paid Amount Into Unsecured Loan Fall Under Definition Of Allottee? MahaREAT Answers
Maharashtra Real Estate Appellate Tribunal (Tribunal) bench, comprising Shriram R. Jagtap (Judicial Member) and Dr. K. Shivaji (Technical Member), has held that homebuyer who converts their paid amount into an unsecured loan will not fall under the definition of an allottee. As the paid amounts are no longer considered as payments for the purchase of the Flat. Instead, they...
Maharashtra Real Estate Appellate Tribunal (Tribunal) bench, comprising Shriram R. Jagtap (Judicial Member) and Dr. K. Shivaji (Technical Member), has held that homebuyer who converts their paid amount into an unsecured loan will not fall under the definition of an allottee.
As the paid amounts are no longer considered as payments for the purchase of the Flat. Instead, they are recognized as a loan which removes the homebuyer from the status of an allottee.
Background Facts
The Homebuyer (Appellant) was allotted two flats in the builder's (Respondent) project named Trishabh Signet, located at Chembur (East), Mumbai through letters dated February 24, 2014, and March 5, 2014.
The total consideration for each flat was Rs. 1 crore and homebuyer paid full amount of Rs. 2 crores for both flats.
The builder obtained occupancy Certificate for project in March 2019. However, due to non-execution of agreements for Sale and failure to hand over possession of the flats, the homebuyer filed a complaint against builder before the authority.
After hearing both parties, Authority through its order dated 15.01.2020 dismissed the complaint of homebuyer by holding that payment made to builder is a loan not the payment, therefore, homebuyer is not falling under the definition of allottee.
Therefore, aggrieved by the authority's order dated January 15, 2020, the homebuyer filed an appeal before the Tribunal seeking to quash and set aside the order.
Observation and Direction by Authority
The Tribunal observed that after going through the builder's company accounts for the fiscal year 2014-15, it is evident that homebuyer formally confirmed in writing that the amount paid by him should be converted into an unsecured loan.
Tribunal further observed that by using the TDS benefits for filing its income tax returns for the fiscal year 2014-15, the homebuyer acknowledged receiving the amounts and confirmed in writing that they were converted into an unsecured loan.
Tribunal observed that homebuyer did not object or protest even when the interest incomes and TDS were credited in its tax statements. Therefore, homebuyer cannot now complain about or question the conversion of the paid amounts into an unsecured loan.
Further, Authority observed that homebuyer accepted, acted upon and benefited from the unsecured loans after confirming the conversion. Consequently, homebuyer claim is not legally valid.
Therefore, paid amounts are no longer for the purchase of the flats but have been formally converted into an unsecured loan which means that homebuyer is no longer an allottee.
Case – M/s Coppersmith Energies and Project Pvt. Ltd. Versus Dimension Housing Realty LLP
Citation – APPEAL NO. ATOO6000000052420
Date of Order - 25.10.2024