Tribunal Modifies Maharera Order, Directs Bldr To Pay Interest From Date Of Payments, ET RealEstate

June 23, 2023

MUMBAI: The Maharashtra Real Estate Tribunal (MREAT) modified a 2021 order of the MahaRERA, which had denied the home buyers not only interest from the day the payments were made, but also refund of other payments such as stamp duties, registration fees, etc and directed an Andheri based developer to pay interest on the amount paid by the home buyer right from the day of deposit and also refund the statutory payments.

The MREAT also denied the relief granted by MahaRERA to the promoter, for the Covid moratorium period, while calculating interest liability.

The home buyers, who were represented by Advocate Nilesh Gala, had booked a flat in Krishna Residences in Andheri (East) for a total consideration of Rs 2.66 crore in 2015 and was promised handover of flat in 2017.

Home buyers Kunal and Sonal Kumbhat made a cumulative payment of about Rs 70 lakh including taxes and statutory payments. However, the promoter failed to deliver possession within the agreed timeline.

While MahaRERA in its order had directed the promoter Krishna Developers to refund the entire consideration along with interest from the date of default that is 2017, the MREAT in its judgment stated that it would be just and fair to refund the amount paid along with interest to the home buyers right from the date of receipts.

MREAT cited Supreme Court judgements and the explanation of Section 2 (za) of Real Estate (Regulation and Development) Act, besides, a Bombay High Court order, which stated that the requirement to pay interest is not a penalty, as the payment of interest is compensatory in nature in the light of the delay suffered by the allottee who has paid for his apartment but has not received possession of it.

The interest is merely compensation for use of money. The MREAT, denied the promoter to claim benefits of moratorium allowed by MahaRERA, observed that in the two circulars issued in 2020, the validity dates of project registration has been extended during the Covid-19 without any change in the possession date .

  • Published On Jun 19, 2023 at 08:37 AM IST

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