MahaREAT: Section 18 Of RERA Applies Even If There Is No Written Express Agreement For Sale Between The Allottee And Promotor

Section 18 stipulates the “rights and remedies available to homebuyers when a promoter fails to meet obligations”. It states, “ If the promoter fails to complete or is unable to provide possession of an apartment, plot, or building according to the terms specified in the agreement for sale, the allottee is entitled to receive interest from the promoter for each month of delay until possession is handed over, at a rate determined by the prescribed regulations.”

Background Fact

The appellant booked a flat in the promoter's project and received an allotment letter from the promoter on 25.11.15. The allotment letter specified the possession date as 31.03.17.

As the possession of the booked flat was delayed, the complainants approached the promoter, requesting cancellation of the allotment letter and a refund of the entire paid amount, along with interest.

Following the promoter's refusal to refund the full amount, the appellant lodged a complaint with MahaRERA.

In its order dated 21.03.20, MahaRERA held that there was no executed agreement for sale between the parties, and thus the case falls outside the scope of RERA. Therefore, cancellation would be governed by the terms outlined in the allotment letter.

The appellant filed an appeal before the Tribunal against the Authority's order dated 21.03.20.

REAT Verdict

The Tribunal, while allowing the appeal of the appellant, set aside the MahaRERA order, deeming it unsustainable.

The Tribunal held that a written expressed agreement for sale between the allottee and the promoter is not a prerequisite for the allottee to avail the rights stipulated under Section 18 of the RERA Act.

The Tribunal referred to its decision in the case of Jyoti K, Narang and Anr. V/s. CCI Projects Pvt. Ltd. (appeal No. AT 10841) wherein it was held that section 18 is applicable even in the absence of an agreement for sale.

Additionally, the Tribunal cited the Bombay High Court decision in the case of The Bombay Dyeing & Manufacturing Company Limited v/s. Ashok Narang & Ors., wherein it was held that Section 2(c) defines an agreement for sale entered into between the promoter and the allottee. It is necessary to note that Section 2(c) does not specify that an agreement has to be in writing entered between the promoter and the allottee.

In conclusion, MahaREAT set aside the order passed by MahaRERA and held that an expressed agreement for sale is not a requirement for the allottee to avail themselves of the rights stipulated under Section 18 of the RERA.

Case: Sachin Tomar And Shivaji Tomar Vs Ensaara Metropark Luxora Infrastructure Pvt, Ltd.

Citation: Appeal No 4T004000000031625 Of 2019

Counsel For Appellant: Mr. Darshan Naik

Counsel For Respondent: Mr. Faiza Dhanani A/W. Mr. Vikramjrt Garewal

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