RERA Tribunal rules Possession Date is obligatory on builder

RERA Tribunal rules Possession Date is obligatory on builder

The Tribunal held that the promoters had failed to hand over possession of two flats by the specified date and thus allottees/buyers were entitled to withdraw and can claim their return along with interest paid

The Maharashtra Real Estate Appellate Tribunal (Tribunal) by two members bench, Sumant Kolhe (Judicial Member) and S.S. Sandhu ordered on 18 January 2021 that the promoters of Palava Lakeside in Kalyan shall refund the money paid with interest by two buyers who withdrew from a project three months after delivery of their flat was due.

The Tribunal held, 'possession' of flat does not mean 'fit-out possession' under Real Estate (Regulation and Development) Act, 2016 (RERA), ruling on the sanctity of the 'specified date' of possession.

Two buyers had filed a complaint initially before the Maharashtra Real Estate Tribunal. They contended that as per their 2014 agreement, the promoters had assured the possession for fit-outs by February 2017 and within a year the final possession with occupancy certificate but with a grace period of a year. However, the project was incomplete when the Real Estate (Regulation and Development) Act, came into effect from 1 May 2017, the promoters subsequently registered the project under RERA.

The buyers contended that in May 2018, no possession was handed over and the buyers decided to withdraw and demanded refund with interest and compensation. They raised their arguments that as per Section 18(1) which provides for a refund with interest and compensation for builder's failure to hand over possession of flat by the date specified in the agreement was invoked.

Consequently in March 2019, the Maharashtra Real Estate Tribunal held, that section 18 was not attracted to their case as the promoter contended that part occupancy certificate was received for the project in May 2018, before the complaint was filed. The authority opined that once the project was complete it would not attract Section 18.

Aggrieved by the judgment, the buyers filed an appeal before the Appellate Tribunal, where it held that the Maharashtra Real Estate Tribunal order was not sustainable under law.

The Tribunal observed, "possession, as contemplated under section 18 of RERA, is not fit-out possession. There is no concept under RERA or even under Maharashtra Ownership of Flats Act."

The Tribunal held that the promoters had failed to hand over possession of two flats by 28 February 2018 as per executed agreements sale for (AFS) and thus allottees/buyers were entitled to withdraw and can claim their return along with interest paid.

"Section 18 of RERA is absolute on the point of specified date mentioned in the agreement for giving possession and not on any grace period mentioned in the agreement", the Tribunal stated in its judgment. It further added, permitting possession beyond the specified date would lead to disastrous consequences, by executing the agreed date of possession as specified in the AFS would become irrelevant.

The Tribunal in its verdict directed refund of amounts paid by the buyers with the interest of two per cent more than the SBI rate, as provided under RERA. The buyers claimed Rs. 25 lakh in compensation as well. However, the Tribunal did not award it but gave them the liberty to file an independent petition for compensation before an adjudicating officer under RERA.