In a recent ruling, the Maharashtra Real Estate Appellate Tribunal (MahaREAT), led by Shriram R. Jagtap (Judicial Member) and Shrikant M. Deshpande (Technical Member), directed M/s. Spenta Builders Pvt. Ltd. to pay interest for the delay in possession from the original due date until the date possession was actually handed over to the homebuyer. The Tribunal also criticized the Maharashtra Real Estate Regulatory Authority (MahaRERA) for its lax approach in determining the default date from which the builder should be liable for paying delay interest.
Background
The homebuyer had purchased a flat in the “Palazzio” project located on Andheri Road, Mumbai, for a total of ₹97,22,000. Of this amount, ₹87,49,800 was paid upfront. According to the sale agreement, possession of the flat was to be delivered by December 31, 2015. However, the builder only provided possession after a delay of approximately 4.5 years, on July 31, 2020.
The homebuyer filed a complaint with MahaRERA, seeking interest on the delayed possession and compensation under Section 18(1) of RERA, 2016. On November 13, 2019, MahaRERA ordered the builder to pay interest from July 1, 2017, up to the actual date of possession.
Dissatisfied with MahaRERA’s decision, the homebuyer requested a revision, arguing that interest should be calculated from the original possession date of December 31, 2015, and that it should continue until possession was actually delivered, given that the flat had not yet received an Occupation Certificate. MahaRERA amended its order on September 3, 2020, by removing the reference to the Occupation Certificate but did not adjust the interest calculation to start from December 31, 2015.
Both the homebuyer and the builder, unhappy with the ruling, appealed to MahaREAT.
Tribunal’s Observations and Ruling
The Tribunal evaluated the builder’s claims of delays due to force majeure events, such as changes in the sanctioned plan and delays in obtaining environmental clearances. The Tribunal determined that these delays did not qualify as force majeure under Section 6 of RERA, which covers natural calamities like war or floods. Consequently, the builder could not use these reasons to justify the delay, and the homebuyer should not be penalized for the builder’s lack of professionalism.
The Tribunal also noted that even if the force majeure arguments were considered, the delays were not attributable to the homebuyer. Therefore, the builder’s request for an extension based on Clause 12 of the agreement was invalid.
The Tribunal criticized MahaRERA for its casual approach in its order dated November 13, 2019, particularly in setting the interest start date from July 1, 2017, rather than the actual due date of December 31, 2015. This decision, according to the Tribunal, lacked a proper basis and did not align with RERA provisions.
As a result, MahaREAT upheld the homebuyer’s appeal, dismissed the builder’s appeal, and ordered the builder to pay interest to the homebuyer from January 1, 2016, until the possession date.
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