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26 Oct 2020

Lack of demand no excuse for delay: MahaRERA

Lack of demand no excuse for delay: MahaRERA
An artist’s impression of the Narang Urbane Housing Forum project in Valve
Orders refunds for homebuyers, gives compensation for mental harassment after developer blames delays on lack of demand due to quakes.

In a relief to five home buyers, Maharashtra Real Estate Regulatory Authority (MahaRERA) has ruled that lack of demand due to repeated earthquakes in Palghar cannot be sufficient grounds for not delivering possession on time, and directed the developer to refund their money with interest.

The five home buyers had filed complaint with MahaRERA seeking withdrawal from the rowhouse project Narang Urbane Housing Forum in Valve Village of Palghar and refund of their investments as the developer had failed to deliver possession despite accepting bookings in 2012.

Advocate Prasham Shah, appearing for the complainants, said though they booked the rowhouse in 2012, the agreement was executed in 2016, and even possession promised in 24 months as per agreement clauses have lapsed in November 2018, but the project is not complete. The complaints contended that the possession date when it was registered with MahaRERA was December 31, 2017, but it was revised unilaterally by the developer to December 31, 2020. The date has been further revised to June 30, 2021.

Adv Akash Pamnani and Tushar Kadam, appearing for the developer, argued that the complaints are not tenable. They said their client had issued multiple demand notices and the complainants had defaulted in making payments. The complainants were also informed that construction will be completed in phase-wise manner as it is a large project.

The developer contended that sufficient bookings are not there due to lack of demand as the Boisar-Palghar belt has been experiencing earthquakes for the past two-three years. The developer also cited delays in approvals from the collector and the Ministry of Environment and Forests (MoEF). There was also severe labour shortage impacting construction of the project.

MahaRERA member Madhav Kulkarni observed that the complainants had paid more than 80 per cent of the rowhouse cost. He rejected the argument that they had defaulted on payments. He said complainants have been making payments since 2012, but when the construction work is inordinately delayed they cannot be expected to go on making payments without the prospect of receiving possession.

He also rejected the arguments that approvals were not received in time and therefore the developer is entitled to extension. He pointed out that the developer applied for approvals for construction in April 2013, and applied again in July 2015. The reply from the collector came on November 17, 2016, seeking clarifications, and certain documents were demanded in July 2017.
Kulkarni observed that the agreement mentions that the collector had approved the project and the environment clearances were received. “The contentions raised by respondent make it clear that collector had not approved the project and the respondent misled the complainants,” he said.

“So far as environmental clearance is concerned, the respondent applied on 19.07.2011 and received clearance on 11.12.2014, i.e. before execution of agreement. Now it is alleged that due to threats of earthquakes, there is no demand in this area,” he said.
Holding that the developer had failed to deliver possession, he said: “Lack of demand is not a reason for respondent to not to complete the project and deliver possession. Almost eight years have gone by since the complainants booked rowhouse and started paying.”