MahaRERA – Dispute Arising Out Of Development Agreement Is Not Maintainable

In real estate, a Development Agreement is a legal contract in which the owner of a plot of land grants permission to a developer to build on the land, transferring the rights to develop and construct buildings from the landowner to the developer.

Background Facts

City and Industrial Development Corporation of Maharashtra (CIDCO) leased the project land to the complainant. On 12-05-2004, the complainant signed a development agreement granting all development rights to M/s J.P Builders & Developers (J.P Builders).

On 30-10-2005, J.P Builders transferred these rights to the Builder (Respondent). Initially, CIDCO approved plans for a residential cum commercial structure with one ground floor and four upper stories, comprising 17 flats and 10 shops. However, according to the complainant, J.P Builders and the builder illegally added three floors without CIDCO's approval, resulting in 29 flats and 10 shops.

Additionally, the complainant claims that both J.P Builders and the builder failed to obtain an Occupation Certificate (OC) and also registered the unauthorized project with MahaRERA without proper approvals.

Due to these violations, the complainant terminated the development agreement during a general body meeting on 10-07-2021. Subsequently, the complainant filed a complaint before the authority, seeking the cancellation of the project registration and other necessary actions to address the breaches.

Contention of Builder

The builder contended that the complaint is not maintainable before the authority because it arises out of the development agreements and is of a civil nature.

The builder contended that the complainant had suppressed material facts. They argued that the construction of the additional 12 flats was based on deemed permissions from the Navi Mumbai Municipal Corporation (NMMC) and therefore was not illegal.

Observation and Direction by Authority

The Authority observed that the issue concerning construction permissions falls under the jurisdiction of the competent authority/Municipal Corporation as per the relevant provisions of the Maharashtra Regional and Town Planning Act of 1966.

The Authority noted that there is no explicit provision under RERA, 2016 empowering MahaRERA to handle disputes arising from Development agreements, such disputes falls within the jurisdiction of the Civil court.

Additionally, the Authority observed that under Section 7 of RERA, MahaRERA registration can be cancelled if the promoter fails to meet RERA requirements, breaches approval terms, or engages in specified unfair practices. However, in this case, the complainant did not provide convincing evidence that the builder violated any Section 7 terms. Therefore, the complaint seeking revocation of the builder's project registration lacks merit.

Consequently, the Authority dismissed the complaint of the Housing society, holding it not maintainable.

Case - Pulin Co-Operative Housing Society Limited Versus Tirupati Developers

Citation - Complaint No. CC006000000209962