MahaREAT – Possession Date Extension Invalid Despite Meeting Attendance And Continued Payments

Background Facts

Homebuyer (Appellant) purchased a flat in the builder's (Respondent) project named SAPPHIRE 1, located in Vikhroli (East), Mumbai. The total sale consideration of the flat was Rs. 1,50,80,000/-.

An agreement for sale was executed between the builder and the homebuyer on 27.07.2015. According to clause 10 of the agreement, the builder was supposed to hand over possession of the flat on or before December 2016.

Due to the builder's failure to hand over possession within the stipulated timeframe, the homebuyer filed a complaint before the authority. In response, the authority, through its order dated 16.06.2021, directed the builder to pay interest from 1st August 2018 until the actual date of possession.

Aggrieved by the order, the builder filed a review application before the authority. Consequently, the authority modified its order and granted the benefits of the moratorium period to the builder.

Further aggrieved by the authority's order and its modification, the homebuyer filed an appeal before the tribunal seeking interest from 1st January 2017.

Contentions of Builder

The builder contended that they held several meetings with the flat buyers to communicate the reasons for the delay. During these meetings the possession date of the project was extended to June 2023, to which the homebuyer did not object.

Furthermore, the builder argued that it is a settled law that when parties decide to replace an old contract with a new one, the terms of the new contract become relevant, and the old contract becomes extinguished.

Observation and Direction by Tribunal

The Tribunal referred to the observation made by the Bombay High Court in the case of Jayesh Tanna, Director of ITMC Developers Pvt. Ltd. versus Radha Arakkal & Ors, where it was observed that in the absence of a duly executed amendment to the agreement for sale expressly extending the possession date, the possession date cannot be changed even if the allottees were present at the said meetings.

Tribunal held that builder's claim that the homebuyer agreed to extend the possession date merely because they allegedly attended the meeting is legally unsustainable. Additionally, it is not correct to say that the homebuyer implicitly consented to the extension of the possession delivery date by making payments to the builder after the agreed possession date had passed.

Therefore, Tribunal concluded that homebuyer is entitled to interest at the prescribed rate from 1st January 2017 until the actual date of possession with the occupation certificate.

Case – Ravindra Laxman Vengurlekar & anr Versus ITMC Developers Pvt. Ltd.

Citation – APPEAL NO. ATOO6000000053319

Order of Date – 18.10.2024

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