MahaREAT Directs Neelkanth Constructions To Pay Interest, Execute Conveyance Deed In Favour Of Homebuyers

Tribunal also held that Homebuyer association cannot be formed till Builder finishes the construction of the Eighth or last building of the Project.

Background Facts

The builder (Appellant) is the developer of the project titled Neelkanth Vihar, Phase I, located at Panvel, Raigad district. The homebuyers (Respondents) purchased their respective flats between December 2017 and September 2018. The builder was supposed to hand over possession of the flat by 31.03.2019.

However, the builder failed to hand over the possession of the flats to homebuyers on the promised timeframe. Further, even after selling more than 50% of the project, the builder failed to form the Homebuyers Association. Additionally, the builder failed to execute the conveyance deed and handover the parking space to the homebuyer.

Therefore, aggrieved by these issues, homebuyers filed a complaint before the authority. The authority, through its order dated 30.07.2020, directed builders to pay interest to homebuyers, execute sale deeds, and form a homebuyer's association.

Further, aggrieved by the authority's order, the builder filed an appeal before the Tribunal challenging authority direction to pay interest and execute conveyance deed in the favor of homebuyers.

Observation and Direction by Tribunal

On the contention of builder that project got delayed due to the change in the Planning Authority and lazy approach of NIANA-CIDCO (Navi Mumbai Airport Influence Notified Area - City and Industrial Development Corporation of Maharashtra Limited), the Tribunal held that builder being an experienced developer in the market was well aware of the factors which has caused the delay.

The Tribunal noted that builder did not carry out the construction as per the sanctioned plan and there are some deviations in the construction from the original plan. Therefore, the builder was again asked to submit the plan to CIDCO. Based on that, CIDCO issued amended Commencement Certificate on 24.10.2019 and further issued Occupation Certificate to builder on 28.11.2019. Thus, the builder is at fault for the delay.

Tribunal referred to the Supreme Court decision in M/s Newtech Promoters and Developers Pvt. Ltd vs. State of Uttar Pradesh & Ors [LL 2021 SC 641], where it was held that if the builder fails to give possession of the apartment, plot, or building within the time stipulated under the terms of the agreement, then the homebuyer's right under the RERA, 2016 to seek a refund or claim interest for delay is unconditional and absolute, regardless of unforeseen events or stay orders of the Court/Tribunal.

The Tribunal also referred the Supreme Court decision in the case of M/s Imperia Structures Limited v. Anil Patni & Another [Civil Appeal No.3581-3590 of 2020], where it was held that under Section 18 of the RERA Act, if a builder fails to complete or give possession of an apartment by the specified date, the builder must return the amount received if the homebuyer wishes to withdraw from the project.

Therefore, basing its reference on these cases, the Tribunal held that builder had miserably failed to respect his obligation to handover the possession of the flat on promised timeframe, Thus, homebuyers are entitled for relief under Section 18(1) of RERA, 2016.

Further, Tribunal referred Rule 9 (2) (III) (b) of MahaRERA Amendment Rules 2019, which stipulates that builder has to execute the conveyance of entire undivided or inseparable land underneath all buildings jointly within three months from the date of issue of occupancy certificate to the last of the building or wing in the layout.

Further, Tribunal noted that builder has completed the construction of only 7 out of 8 building. Therefore, Tribunal held that builder has to execute conveyance deed in the favour of Homebuyers of those 7 buildings.

Lastly, On the issue of forming homebuyer association, Tribunal held that Homebuyer association cannot be made till the completion of 8^th and last building of the project by builder.

Case – M/s. Neelkanth Constructions versus Mr. Deepesh S. Singh A/W 3 others

Citation – Appeal No. AT00600000052653120 in Complaint No. CC00600OOO0089761 A/W 3 others

Date of Order – 01.10.2024