Maharashtra Real Estate Regulatory Authority (MahaRERA) has ordered the developer of Celestial, a 23-storey project in Bhandup, to pay a compensation of Rs 1 lakh for causing mental agony, & Rs 20,000 as cost of complaint to 2 home buyers apart from refund of their investments with interest for delayed possession.

MahaRERA member Madhav Kulkarni awarded the compensation after ruling that the developer Su Sharda Edifice LLP arbitrarily revised the possession date from 2017-18 to 2023-24 causing mental trauma & hardship to the home buyers.

Kumar Gowda & another home buyer had booked flats in A wing of Celestial in 2015-16 & the agreements promised possession in 2017 & 2018. They paid over 75% of the flat consideration of Rs 1.13 crore, but the developer revised the possession date to 2023 & 2024 without the permission of the home buyers. 

Lawyer Laxmi Singh, appearing for the home buyers, also submitted that the developer had represented that all necessary permissions had been obtained, but altered the original plan & allotted certain portions for commercial establishments without the consent of purchasers.

Chartered accountant Ashwin Shah, appearing for the developer, argued that the complaint is false & that the construction was to be completed as far as possible on or before Dec 21, 2018, & no date of possession was fixed in absolute terms. The transaction was under the provisions of Maharashtra Apartment Ownership Act, 1970 & therefore a complaint under the provisions of RERA is not tenable. 

Shah argued there was a 27-month delay due to the notifications for the new Development Plan 2034 during which the Brihanmumbai Municipal Corporation didn't process the file.

Projects above 4,000 sq m required to provide 5 to 10% amenity space to the corporation, & his client had to make an application for a further commencement certificate which could be made only in Feb 2018. The approval for the CC came in April 2019, & therefore, 27 months of delay needs to be condoned & the date of possession should be calculated as March 31, 2021. He also blamed the impact of demonetisation, GST roll out on the real estate sector, & the NBFC scams impacting the line of credit for the delay. 

Kulkarni dismissed the developer’s arguments regarding the delay & ruled that he had failed to provide possession as per the agreement without there being circumstances beyond his control. “It is well settled that a developer must deliver possession within two to three years since the booking by allottee,” observed Kulkarni, directing the developer to refund the investments with 10.40% annual interest within 30 days from the order. 

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