Mumbai: Developer to pay interest for delay

Nearly 32 home buyers who had booked their apartments way back in 2005, and were suffering because of the forest land issue, have finally got some relief. The Maharashtra Real Estate Regulatory Authority (MahaRERA) has asked the developer to pay interest to the home buyers for the delay in possession. The authority asked the developer to pay interest from January 1, 2015, as the project was cleared by the Supreme Court in the year 2014.

The home buyers had booked the flat in the project Blue Diamond, and executed the agreement for sale in the year 2005 and even had paid a substantial amount towards the flats. The complainants had approached MahaRERA seeking the authority to direct the developer Nirmal Lifestyle Ltd, to hand them possession with occupation certificate, form a co-operative society, and pay interest for the delay in handing over possession.

The developer, during the hearing, pointed out that the project was commenced in 2005, but a part of project land was declared as private forest by a circular issued by the state government. Following this development, a stop work notice was issued by the MCGM in May 2006. The case went through prolonged litigation and was decided in January 2014, by the Supreme Court, subsequently, the government issued a letter in December 2014, after which the entry of private forest was deleted from the rights column of the land in January 2015. The developer argued that it was this litigation that caused the delay and he assured that the project will be completed in this year.

The developer also claimed that at the time of the agreement there was no agreed date of possession mentioned and hence it was wrong to conclude that complainants were entitled to compensation in order of delay in handing of possession. The developer also claimed that he has taken steps to form an association of allottees.

Dr Vijay Satbir Singh, MahaRERA Member, hearing the case stated that no date of possession in the agreement was a violation of provisions of MOFA act, and also could be due to the reason that parties were uncertain about the future of the project. Singh further stated that the stop work since 2006 till the decision of Supreme Court caused the delay in construction, but for home buyers, it resulted into a long waiting time, even after paying a substantial amount to the developer.

Singh held that, during this period (2006-14) the developer could have refunded the money to the home buyers or accommodated them in other project being developed by him, but he held the money with himself and hence was responsible for compensating the home buyers especially for the period after the project was cleared by the Supreme Court in the year 2014.

"The omission of the date of possession in the agreement does not entitle the promoter to take an indefinite time to complete the project and make the allottee wait for more than 13 years. It is obligatory for him to give a definite date of completion of the project to the allottees," said Singh.

Singh finally ordered the developer to pay the home buyers, interest for the delay in possession from January 1, 2015, till actual date of possession. He also allowed the outstanding amount to be paid by the allottees may be given a set off against this payment, and asked the developer to complete the formation of association/society of allottees.

Dharmesh Jain of Nirmal Lifestyle did not respond to our messages.

CASE FILE

The home buyers had booked the flat in the project Blue Diamond, and executed the agreement for sale in the year 2005 and even had paid a substantial amount towards the flats. The developer had claimed that at the time of the agreement there was no agreed date of possession mentioned and hence it was wrong to conclude that complainants were entitled to compensation in order of delay in handing of possession